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 Combat ChuckToo Many CannibalsPremium
join:2001-11-29
Erie, PA | reply to Jason Levine
Re: Not Adequate Broadband Competition said by Jason Levine:The problem is... ...Now, on the face of it, you might think that this would make for good competition, but it's not... ...However, when push comes to shove, my bill never goes down, only up. Competition and the free market only serve to make sure that goods and services are distributed in the most efficient way possible, not to make sure that you have $20 broadband. And what you have there is competition. Sometimes the real price of something at a particular point in time and space is much higher than you want it to be and theres not much you can do about it without making the situation worse.
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Attention all decks! Brace for whining! | | |
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JPCass
join:2001-01-23
Denver, CO | said by Combat Chuck: Competition and the free market only serve to make sure that goods and services are distributed in the most efficient way possible, not to make sure that you have $20 broadband. Ideally, competition works like that. Reality is often different.
How many cases have we seen in recent years of price collusion amongst "competitors", in everything from wholesale electricity to insurance?
In the case of industries that are provide public utilities, like airlines and telcom (and, in the past, railroads), companies frequently compete one another towards bankruptcy in shared markets, while often virtually ignoring less glamorous smaller markets where small profits could be made.
Ego, greed, and corporate and industry short-sightedness often counterbalance market rationality. I'm not suggesting a solution here, just pointing out that irrationality in the distribution (and pricing) of goods and services is not unusual. | |
 calvoiper
join:2003-03-31
Belvedere Tiburon, CA | Two points:
Collusion is bad. However, you make a small mistake when grouping airlines with the telecoms. Airlines are pretty competitive these days, and the process of some of them going out of business because they are whipped by new competitors with better business plans is natural. The phrase "ruinous competition" is oft used by monopolists who want to continue regulation and avoid competition--when in reality, all competition is "ruinous" to the loser.
Second point: When one player has a built in advantage because it was granted a century long monopoly and had already installed and largely depreciated the most difficult portion of the competitive model (the local loop), claiming that it needs a "level playing field" is pure hogwash. It's historical advantage should be recognized and shared, as the Telecom Act of '96 and the ORIGINAL implementing regulations from the FCC tried to do.
calvoiper
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VoIP--the death knell of remaining voice monopolies! | |
JPCass
join:2001-01-23
Denver, CO | Yes, the situation is indeed quite complex with many variables. But companies, including the airlines, tend to get caught up competing in large markets where no one ends up making a profit, just as they persist in building the impressive oversized conglomerates (UAL's Allegis in the 80's, Tyco, Time Warner, etc.) that have been proven time and again not to be viable. Part of small and upstart airlines' trick may have been efficiencies and avoiding costs, but they also make money serving less glamorous small markets.
One of the greatest examples of all, and the most relevant, is the huge amount of "dark fiber" laid in the mad over-competition for a few corridors and major markets. Companies could have spread out their investments instead in slighly more obscure and complex ventures like FTTH and rural broadband - and yes, even $20 broadband tiers - and at least had marginal revenue streams rather than a complete loss. The market is hardly efficient when companies literally bury money in the ground, and potential paying customers go unserved. | |
calvoiper
join:2003-03-31
Belvedere Tiburon, CA | Having grown up in a rural area, I understand your position, and I thought long and hard about introducing broadband to my small town.
However, Verizon has now got it in, and although I would have had a year or two lead time, they'd be cleaning my clock right now.
Also, I understand your "smaller markets" point. I watched Ozark Air Lines flourish when it served small markets, and then grow into a competitor that TWA eventually bought out. (When Bill Barr, subsequently VZ General Counsel, was US Attorney General.) TWA, then without a competitor in St. Louis, got fat, dumb, and happy, got stripped by Ichan, and eventually purchased by American. Sad, indeed.
On the other hand, if you think less contested markets are the better bet, you're free to go there. Gather some capital and install. It's a free country!
Calvoiper
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VoIP--the death knell of remaining voice monopolies! | |
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