[1668] in Commercialization & Privatization of the Internet
natural monopolies
daemon@ATHENA.MIT.EDU (drw@BOURBAKI.MIT.EDU)
Tue Dec 10 01:36:07 1991
Date: Tue, 10 Dec 91 01:30:42 EST
From: drw@BOURBAKI.MIT.EDU
To: com-priv@psi.com
In-Reply-To: <m0kqzed-000HelC@heifetz.msen.com> "emv@msen.com"
From: Edward Vielmetti <emv@msen.com>
we have multiple long distance phone carriers to choose from, and
multiple little rent-a-mailbox package shops, I'd expect that an
intelligent consumer of internetwork services would have several
options in most cases. (that is, unless the barriers to entry
into the market were artificially high.)
True, but we don't have multiple *local* phone carriers, presumably
because it's far more efficient to have one local network than
several. The long-haul nets correspond to long-distance carriers, the
mid-level nets to local phone companies.
This is based on the idea that the local carrier with the highest
density of customers has an automatic overwhelming price advantage
because its switching centers are closer to the new customer (on the
average) than any newcomer. Whether this is true for Internet access
is an interesting question. This probably depends on whether Internet
access costs are dominated by mileage charges from the leased lines,
or by modem, router, and support costs. (Whether it is still true
for local phone service is an even more interesting question.)
Dale Worley Dept. of Math., MIT drw@math.mit.edu
