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DaneJasper
Sonic.Net
Premium,VIP
join:2001-08-20
Santa Rosa, CA
clubs:
| My response to Martin's op-ed
Here's my thoughts for the WSJ - unpublished by them at this point, but relevant for this forum:
To: Editor, WSJ
The Wall Street Journals publication of the FCC chairman's op-ed could use
some fact-checking. His assertion that we'll be better off as a country
with far fewer Internet providers makes no sense, and his agency's push for
de-regulation is misguided. The published article includes so many
misstatements that it's difficult to know where to begin.
Natural regulated monopolies such as train tracks, power lines, water works
and telephone lines should be regulated and deregulated with extreme
caution. In Japan, South Korea and many European nations, they are
achieving far higher broadband penetration ratios in their population by
requiring fair wholesale rates and competition on these limited resources.
Here, we are falling behind in deployment, and the blame for this is being
misplaced. Regulation is the solution, not the problem!
Meanwhile, the assertion that broadband over power lines or wireless are
relevant in today's marketplace is either wildly optimistic or badly
misleading. BPL is not mature, and is only in trial, and wireless has not
been shown to work on a wide scale at high speed in any markets. Satellite
has a small share, but only in locations where DSL and cable are not
available at all. Martin's conclusions are wrong.
We need to foster a competitive Internet - handing over the fabric of our
country's connectivity to a few monopoly companies will stifle availability,
innovation, speed and features. We need to retain and encourage the
thousands of Internet Service Providers we have in the US today, not put the
final nail in their coffins.
--
Dane Jasper Sonic.net, Inc.
(707)522-1000 »www.sonic.net/
mailto:dane@sonic.net | |
GhostDoggy
join:2005-05-11
Duluth, GA
| But could Japan, South Korea, and those European countries have done the same thing again if a) they were not subsidized by their governments in some part, and b) have the same geography as the United States.
Its easy to have high market penetration when the majority of your peoples are in small, tight urbanized areas. I wonder how it would look if the federal government offered up a 20% subsidy to each and every private broadband company, and then only looked at the major cities when determining market penetration. | |
rideboarder
welcome to the social
Premium
join:2003-07-28
Snohomish, WA
clubs:
| said by GhostDoggy  :Its easy to have high market penetration when the majority of your peoples are in small, tight urbanized areas. I wonder how it would look if the federal government offered up a 20% subsidy to each and every private broadband company, and then only looked at the major cities when determining market penetration. That may be true, but it's still no excuse that cities like New York, Los Angeles, Chicago and so forth don't have faster connections. | |
markopoleo
join:2003-04-02
Bonne Terre, MO | reply to DaneJasper
"BPL is not mature, and is only in trial"
Kinda misleading, its not in trial in some places its be working fine for over a year in some communities. | |
LegoPower77
Abecedarian
Premium
join:2002-08-03
Arlington, VA
| reply to rideboarder
No, it is an excuse because you have to look at the uniformness of the density. For example, NYC is as dense as say, Hong Kong (maybe it is, maybe it isn't, don't feel like looking it up, but for argument's sake, assume so) but if you go some 50 miles outside of NYC, it's rural. On the other hand, I dare say you have few rural areas in Hong Kong or its surrounding area in China, or in say, Korea, either.
--
"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." —Ronald Reagan | |
LegoPower77
Abecedarian
Premium
join:2002-08-03
Arlington, VA
| reply to DaneJasper
While I disagree with your formulation, I would like to offer much praise for your saying we should “regulate/deregulate with extreme caution.” It seems so many in these pages are blindly willing to have a political board determine market structures, at least you say your cautious in both cases.
That being said, I would suggest the “monopoly” status of these companies are a result of exclusive franchise licenses given by the government rather than a natural occurrence.
First, can we agree to one thing? Sherman anti-trust law, et al. were passed long before economics developed as a science; that is to say, we know more now about how markets work than we did at the turn of the last century. I’m not asking you to agree with the interpretations of what we know, just agree that there is more knowledge.
Now, that being said, I have a hard time putting so much faith in both the legislative and legal precedence in this matter since the law as written is a no-win situation. Under Sherman, a firm can be prosecuted for raising prices (proves they’re a monopoly), lowering prices (predatory practices), or keeping the price the same as others (collusion).
In fact, economists have looked at the suits brought under Sherman, et al., and surprise, surprise, it’s just a method for one business to waylay another business. It turns out that when the company bringing the suit is the more politically-connected one, the case goes through, whereas when the company bringing the suit is not as connected as the defendant, the case does not get heard (generally speaking, of course). Example: Microsoft had just one lobbyist in Washington before they were sued.
Monopoly in the pure sense of the word cannot exist because there are always alternatives. When we do see shades of monopoly, it’s almost exclusively government created/enforced (think, the Post Office, Amtrak, the phone company . . .).
The fact of the matter is, there are always substitutes. Plastic is a substitute for metal, coal is a substitute for oil, cable is a substitute for DSL… However, we must be careful not to look at it as a black-and-white situation; the substitutability of a good is a continuum that is different for different people and goods. The point is, though, that even if there were a “monopoly,” it would still face a sloping demand curve meaning it couldn’t “just charge what it wants.” The negative slope of the demand curve proves that doing without is an alternative, N.B.: at some point, people will just not pay.
Firms that have some level of monopoly status are still constrained by costs, they still face a downward-sloping demand curve, and the only thing they do differently is instead of in a perfectly competitive market where firms produce to where marginal cost = the unchanging price, in theory, monopolies will lower production to where marginal cost = marginal revenue and try to seek out the most profitable price. Whether this is good or bad is a matter of opinion.
I say “in theory” because a large number of economic historians have found that the opposite is the case. For instance, Dominick Armentano examined the oil, steel, and tobacco industries and found that all the “monopoly” companies (Standard Oil, US Steel, and American Tobacco Co.) had a record of continually increasing output and reducing price (see The Myths of Antitrust chpts 4 & 5).
Standard Oil in 1870 sold refined oil at $26.4/bbl and had 4% market share. By 1911, they had brought the price down to $4.7/bbl and had 69% market share. Same scenario for Alcoa, in 1887 a pound of aluminum sold for $5-8, by 1941 it was down to 15¢/lb. In more recent times, Microsoft gets lashed as an eeevil monopoly while no one can argue with how much better off people are with their products—as if they’ve been coerced into buying them or something. Meanwhile, government subsidized companies flounder (the railroads in the 1880s, the shipping industry around that same time, the post office, Amtrak…. Didn’t they just need another billion dollar bail-out?)
Furthermore, Yale Brozen says that, “the few trusts that actually did attempt raising prices and reducing outputs, such as the American Sugar Refining Company in the early 1890s and the American Can Company after 1901, quickly lost market share to new entrants attracted into the market, which bid prices back down to competitive levels” (see The Attack on Concentration). Indeed, just the threat of a new entrant into the market is enough to keep the so-called monopoly from abusing it’s power.
Regulation makes people beholden to a politically connected commission and leads them down the road to serfdom. As Friedrich Hayek points out in his essay The Meaning of Competition, “Enthusiasm for perfect competition in theory and the support of monopoly in practice are indeed surprisingly often found to live together.” The reason for this is that people get so caught-up in trying to make everything “competitive” that they end up distorting the market by excessive regulation.
Whatever good the aims of regulation are, it always ends up maintaining the power of the planners themselves. A society that cedes its development to an organized commission will always be limited by what the minds of the planners can grasp
--
"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." —Ronald Reagan | |
itguy05
join:2005-06-17
Camp Hill, PA
| quote:
Microsoft gets lashed as an eeevil monopoly while no one can argue with how much better off people are with their products—as if they’ve been coerced into buying them or something.
Actually, we are not better off with Microsoft's products. We are probably worse off than if we would have went with the competitors (Apple, Novell, Word Perfect, Lotus).
And people were coerced (or FORCED) into buying them. Read up on the case and you'll see a lot of illegal tactics. | |
JakCrow
join:2001-12-06
Palo Alto, CA
1 edit | reply to GhostDoggy
said by GhostDoggy :But could Japan, South Korea, and those European countries have done the same thing again if a) they were not subsidized by their governments in some part, and b) have the same geography as the United States. Its easy to have high market penetration when the majority of your peoples are in small, tight urbanized areas. I wonder how it would look if the federal government offered up a 20% subsidy to each and every private broadband company, and then only looked at the major cities when determining market penetration. Doesn't the U.S. market have its share of subsidies? While there isn't specific government monies being thrown at telcoms, tax breaks and deals on multiple levels count for something. | |
broadbanderexpanderc
@66.100.x.x
| reply to LegoPower77
There are MANY rural areas outside of Hong Kong. I lived in one for a year. China has a far less dense population than the United States in certain areas and has broadband available in many of them. Canada has a similar population makeup to the United States and has broadband far more readily available in rural areas. Geography is no longer a legitimate excuse for America's lag. | |
broadbanderexpanderc
@66.100.x.x
| reply to LegoPower77
The problem has little to do with prices here. Yes, prices decrease over time in any industry. However, its how quickly and comparatively those prices decrease (accounting for inflation, of course). The issues with Standard had little to do with the prices that were being charged rather than how they were using the other companies they controlled to keep those prices low and maintain their monopoly. If private companies had maintained control of the electricity market for much longer, its safe to say they would've have prolonged distribution to rural areas even longer.
The point here isn't just price, imo, but penetration. Private companies do not go where it isn't cost effective and this has been historically true even of Monopolies who do charge low prices.
Steel and tobacco are very different from broadband and electricity. You cannot actually believe that if a company did manage to control %100 of an energy or broadband market it would continue to lower prices out of the goodness of its collective board's heart. Standard owned all sorts of different companies and used those supplemental companies to cross subsidize oil prices low and maintain monopoly. When a public utility tries to do the same. The result was cheap prices of oil, but little concern for the actual intention of some of the resources they owned (commercial and travel rails, for example). When a public utility does the same kind of cross-subsidization and exploitation of coalescing resources, their operations are penalized or shut down, why not the same case for privates? | |
broadbanderexpanderc
@66.100.x.x
| reply to LegoPower77
Also ...
Don't forget the biggest revolution of the past twenty years to absolutely BLAST all logical economic theory out of the water ... advertising.
People no longer buy the cheapest product.
They purchase the most lucrative lifestyle based on perceived value.
Frankly, I think psychological methods of advertising should be regulated, barred, destroyed, whatever, since they essentially ruin the market even in its "naturally perfect" state. Reality and theory do not always coalesce, especially in economics. | |
justncredible
@rr.com
| reply to DaneJasper
Dane, wow your a idiot. We tried the line sharing, and as a FACT the phone lines are still forced to be shared. What you seem to be saying is, let the bells build out the fiber and then STEAL them and give it to some lazy company that did not have the foresight to build out. The prices will not drop, it is not real competition, only one company will own the lines. How will that foster growth of any kind? What is a companies incentive to build out? Has Covad laid lines down? It would be the same if you had a Wendy's and a burger king on the same street, and any time burger king wanted they just walked in and stole the burgers off the grill and sold them as their own. It is stupid. This crap you idiots have wrote is AFTER we see deregulation WORKING!!! Prices are dropping, SBC offers DSL at under $15.00 a month now, fiber is being laid all over. Yet you want to go back to slow speeds and higher prices. Stick to reporting news and away from voicing your opinion. You are only propagating the belief that anyone in the media are mindless nitwits. | |
majorash
join:2004-06-21
Beaver Dam, WI
 ·Charter Pipeline
| reply to itguy05
If everyone would be using Apple, Linux or whatever else. We would end up with the same problems. You would have just as many viruses and worms and whatnots as you do with Microsoft products.
I'm not saying that MS didn't do anything wrong, I don't know everything about there little monopoly lawsuit. I'm just saying that the grass wouldn't nessisarly be greener on the otherside.
With the rural areas of the US not having BB. It's just the American way. Screw the little guy. As long as I can keep getting all this money out these people over here... I'm not going to bother to spend the money to give the others the same service. | |
broadbanderexpanderc
@tmodns.net
| reply to justncredible
justn, who do you work for, really?
Where is the 15 dollar service and what percentage of ALL computer users is that? Please, I want you to give me the EXACT figures that PROVE you are right and that "deregulation is working." I don't want history from the 20s, 50s, or 80s; I want the numbers from NOW in the case of broadband penetration.
I want to see how "successful" deregulation has been. So please, line up the numbers that show how America's growth is equivalent since all the massive deregulation with Korea, China, Canada, Iceland and other countries that have regulated more since we began deregulating. Oh, that's right, troll! We've dropped an incredible amount comparatively! Wow! China's communist. You don't get much more regulated than that, eh? Hmmm, and it turns out they have just as diverse a geography as the US! Why, even more so! Real facts and citations before anymore idiotic and untrue claims. Don't give me percentages comparing USA now with USA past. Give me international comparisons of rural and urban areas. Give me real data. You won't be able to. Because no real data on the subject supporting your claims exists. We are falling every year in both speed AND penetration on the international level. Your fallacious claims, as usual, only irk. I wonder sometimes if maybe you're actually just Kelliher. | |
rideboarder
welcome to the social
Premium
join:2003-07-28
Snohomish, WA
clubs:
| reply to LegoPower77
said by LegoPower77 :No, it is an excuse because you have to look at the uniformness of the density. For example, NYC is as dense as say, Hong Kong (maybe it is, maybe it isn't, don't feel like looking it up, but for argument's sake, assume so) but if you go some 50 miles outside of NYC, it's rural. On the other hand, I dare say you have few rural areas in Hong Kong or its surrounding area in China, or in say, Korea, either. So you are agreeing that NYC is as dense as Hong Kong? Then why isn't NYC seeing the same speeds as Hong Kong? There are no excuses. I'm not talking about rural areas, i'm talking about major cities in the United States that are completely lagging behind! | |
JakCrow
join:2001-12-06
Palo Alto, CA | reply to broadbanderexpanderc
I wouldn't bother. Justin is just a blowhard that shows up every now and then to regurgitate the same tired lines. Gosh. Who has more credibility? Dane or Justin? Need I ask? | |
justncredible
@rr.com
| reply to broadbanderexpanderc
Wisconsin SBC DSL for under $15.00 a month
»www05.sbc.com/DSL_new/content_ne···,00.html
Wow I have misunderstood the meaning of "deregulation". My use of the word was meant to say less government oversight of business. Well if I read this right it seems that it is the opposite.
»www.aei-brookings.org/policy/page.php?id=211
Yet even tho the word now has a mis-meaning I am still 100% fu*king right, try 83% growth in under 1 year since the FCC stopped forcing line sharing.
»www.ftthcouncil.org/newsroom.tpl···26181367
Thats 83% buddy, HA! Less government control is better for everyone. as for the international crap, it does not fly, anyone in this country can get broadband, anyone anywhere, even morons in the middle of nowhere-land can get broadband. Have a look at this link, all of America is covered.
»www.andilinks.com/satel.htm
Not only that but realize that the only reason more Americans do not have broadband might have something to do with the fact this country is so great. Milwaukee for the past 9 days has had summer fest going on, something like 15 bands a day playing onstage. I am the only person I know that spend more than a hour a day online. Most people are doing things, no one wants broadband, if they do they can get it as I have shown.
As for who do I work for, I work in a machine shop, as a quality tech. I inspect parts on a Browne and sharp CMM, do surface plate layouts. I am just a normal guy, with a slightly higher iq than most. I know many who are smarter than me, yet I can do simple research and have a good memory retention. I will not say the name, but if Karl ask I will provide him with details even numbers to verify my claim. I work 3rd shift as well so now I am going to sleep....... | |
FightingBlue
@direcpc.com
| "anyone in this country can get broadband, anyone anywhere, even morons in the middle of nowhere-land can get broadband."
And even a--holes from some suburban botox babylon can talk trash on the internet without knowing what the hell they're talking about.
Actually, no, nitwit, not everyone can get broadband. Satellite hardly qualifies as an effective broadband connection--not only is it unreliable and extemely latent, but it doesn't come even close to the speeds of current DSL and cable, let alone the kind of next-gen speeds that are going to be becoming increasingly neccessary in the future.
Oh, and those same satellite services are available in other countries. Do you ever think before you type?
Furthermore, I suggest that you compare US broadband penetration to other countries before you start doing any little victory dances.
"Not only that but realize that the only reason more Americans do not have broadband might have something to do with the fact this country is so great. Milwaukee for the past 9 days has had summer fest going on, something like 15 bands a day playing onstage."
Right, so there's no broadband available, because no one wants it, because everyone's watching bands in Milwaukee. So if 'everyone' can get broadband, I suppose all the disaffected users here are what, a figment of my imagination?
"I am just a normal guy, with a slightly higher iq than most."
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHA. Right. Let me see your MENSA certificate. | |
rideboarder
welcome to the social
Premium
join:2003-07-28
Snohomish, WA
clubs:
| said by FightingBlue:
"anyone in this country can get broadband, anyone anywhere, even morons in the middle of nowhere-land can get broadband."
And even a--holes from some suburban botox babylon can talk trash on the internet without knowing what the hell they're talking about.
You're right, if we want to look at it that way, everyone in the world can get internet over satellite, minus some extremely remote areas in siberia maybe...I'd hardly call satellite broadband. | |
justncredible
@rr.com
| reply to FightingBlue
Satellite is broadband, you can not just pick and choose what you consider broadband and expect others to agree. ISDN is broadband, satellites are broadband. So I remain correct in saying anyone can get broadband. I proved it so your wrong.
I suggest YOU compare the broadband penetration, if you can not site the source study and the para metrics of the study then they mean nothing. Show how the data is collected, you will soon find out the studies are false. One country cooks the numbers to make a appearance of higher usage.
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