[9770] in Commercialization & Privatization of the Internet
Re: More on Telco
daemon@ATHENA.MIT.EDU (Russell Nelson)
Fri Jan 21 01:04:16 1994
Date: Thu, 20 Jan 1994 09:55:48 EST
From: "Russell Nelson" <nelson@crynwr.com>
To: "Pres Smith" <PGSMITH@ucsvax.ucs.umass.edu>
Cc: com-priv@psi.com
Just my usual economic haranging. Skip this if you've seen it before. :)
On Thu, 20 Jan 1994 06:39:10 -0500, "Pres Smith" <PGSMITH@ucsvax.ucs.umass.edu> wrote:
> But this is irrelevant to the point being made in earlier posts,
> which was generally that competition lowers prices. With that general
> idea, barring the usual abuses, one can hardly disagree. My point was
> that many of those on Com-Priv are presenting evidence based on their
> rarified experience, rather than the general, and that citing cost
> reductions in long distance service, while it supports the argument
> for competition there, is beside the point for the majority of us with
> little discretionery income.
But free markets and competition is even *more* important to those
with little money.
> Getting the cost of essential local phone service down, rather than
> the frills, is trickier--to say nothing of computer, modem, local
> Internet, and public information/education database access. Competition
> --if there is any--will reduce prices, as presumably will the scale up
> to more general access.
But there is always competition. In the current government-created
monopoly, you have competition between the telco and the PUC. In a
natural monopoly[1], you have competition between the dominant player
and the customers. And without a monopoly, you have competition
between suppliers.
[1] In a natural monopoly, the fixed costs are high enough, and
the price the customers are willing to pay is low enough that,
the market can only support a single supplier.
> But despite the prospect of cable, telco and cellular competition
> in local markets, the effect may be temporary as monopolies emerge
> or a "mature" situation among several firms leads to the usual
> "administered" industry.
Perhaps the local loop plant is a natural monopoly. It's been an
awfully long time since we've tried competition in that market so
it's hard to say.
> Beyond that, the real idea of "universal access" is to permit
> the sharing of public, social and educational resources--libraries,
> museums, databases, etc.--while the thrust of competition is to
> control access to such services for private profit, via copyright,
> restraint of trade, etc., which are normally features of the
> marketplace, whether regulated by such weak and permeable barriers as in
> our long experience with the FCC, or not.
When a democratic society tries to regulate businesses, the
businesses mostly end up controlling the regulators. The businesses
interest in the regulations is sharp and pointed. The customers
interest is diffuse.
--
-russ <nelson@crynwr.com> ftp.msen.com:pub/vendor/crynwr/crynwr.wav
Crynwr Software | Crynwr Software sells packet driver support.
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