Bundling an Antitrust Violation? > Bundled services

reply to Kaltes

Re: Bundled services

said by Kaltes:

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Comcast is not Cherry Coke. Comcast does not have to worry about some new company appearing tomorrow and laying a national copper/fibe/cable network. It cannot be done. So, the threat of competition cannot properly deter Comcast. Because of this fact, anti-trust steps in to prevent Comcast from abusing its position of unchallengable strength.

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""Nature does not like inequality and so even if Comcast was the only game in town, the windfall profits it makes —assuming it prices to make them (see my other post here)— would attract someone to lay the fiber.""

Even if someone decided TODAY to 'lay fiber' they could not begin to compete with Comcast for possibly years., if ever. Look at how much BS tri-city broadband is putting up with. Tri-city wont be available for quite a long time, and that proposal is something like a year old already. The threat of market entry does not exist for Comcast. If it did, Comcast couldnt hike prices to $57/month when it was already making substantial profit at $43/month. This new price is plain and simple gouging. It is also a tax on our freedom to choose whatever TV service we want.

Also, what is to stop Comcast from gouging now, then taking a loss once competition starts up, running the 'enemy' out of business, then resuming gouging? Anti-trust.

Im not spouting off emotion here, Im making well-reasoned arguments.

""When the market is open, i.e., not encumbered by barriers to entry""

There are a large number of practical barriers to entry with cable and dsl. There is 1 infrastructure. Creating a duplicate infrastructure would be an exceedingly difficult if not impossible endeavor, and in any event it would take years to get off the ground.

As for your posts regarding monopolies reducing prices... I have to laugh. Anyone who has taken high school economics can see through your argument. If a monopoly drastically lowers prices, it is only temporarily to kill whoever dares attempt to enter their market.

Since you brought up Microsoft, maybe you'd like to explain to me how their 600%+ profit margins on their OS and office software is a GOOD THING for anyone but MSFT?

You're expecting too much of giants like Comcast (or any of the Bells) if you wish them (or anyone else that large, for that matter) to turn on a dime and compete at the snap of your fingers.

There is MUCH more involved in this equation than you give credit for. There is no reason that a company (or municipality) can't lay fiber and compete within a few years of continuous deployment and growth. It's already been done with many companies and several municipalities.

What you are asking for, though, is for competing services in the type of service that YOU would like to subscribe to- all at the price that YOU would like to pay- EVERYWHERE. And your claim seems to be that since that can't be done instantaneously, it must be the opposite end of the spectrum and impossible to do in less than a century.

I ask you this as well... while there is technically nothing to stop Comcast from "gouging until competition comes, then give it away till competition is gone- only to gouge again," Comcast (and any other company) will ALWAYS be in that cycle if they choose this- and they will have ZERO long term customers, a TERRIBLE reputation, a bad credit rating for investors- as no rating service will see the constant gain and loss of customers along with ZERO revenue overall as a good business plan. So Comcast won't be doing that- as they probably prefer to be in business and prefer that investors buy their stock.

Telephone service is the same- but with different rules. What regulators are trying to do is to "manufacture" competition by encouraging consumers and businesses to choose to purchase their telecom products ANYWHERE but a Bell by limiting the Bells ability to innovate, deploy and market new (and some older) technologies. The regulators are sort of playing the game of "let's increase costs, lower revenue and prevent the Bells from competing for a while" in order to "force" the public to go elsewhere- even if they are COMPLETELY HAPPY with their phone service.

By following the equation of "innovation is an effect of competition" (it's not ONLY caused by competition, but it is a possible effect of it), one only need "solve" for competition to realize that competition can be achieved by limiting innovation from one competitor and allowing other competitors to be more marketable and attractive. This is akin to preventing Burger King from offering french freedom fries to get more people to go to McDonalds instead. And it works- at least in theory. The problem in telecom regulation is, however, that the new market entrants are dependent on the incumbents- meaning that if the incumbents are prevented from innovating, the new entrants won't survive either. The equation needs tweaking that encourages new entrants to gain independence from the incumbents. The reality is that the incumbents aren't thrilled at all to be required to support the new entrants- and it shows. The incumbents aren't going to innovate if they are required to allow the new entrants back stage too. We are now at gridlock.

So what is the answer? No one knows yet- but long term time will solve all current problems- and create new problems- but isn't that what keeps people employed?

Boogie