anon2k2
join:2004-04-17
University Place, WA
| Most cable companies are monopolies
I know, because my job is to help negotiate the utility monopoly agreements for the city in which I'm employed.
That is the reason that regulation may be required. This is not rocket science, although it is basic economic theory: when a market doesn't correctly price products due to negative or positive externalities, then regulation can help clear the market and achieve something closer to Pareto optimal outcomes.
The cable companies certainly artificially benefit from the monopolies they are granted when a municipality grants them a monopoly. There are good reasons why that is OK, though, since without the protection of a monopoly agreement, the build-out costs may never make sense from an ROI standpoint. However, when those companies use the power of their granted monopoly to then extract excess rents, and use their protected profits to lobby for legal changes to forever protect their monopoly status, then consumers (aka voters) get a bit testy.
The real issue is how to provide protection to allow the infrastructure to get built, but not allow for the monopoly to completely overwhelm the consumer.
There are no easy answers. The version that I personally like the most is to have the voters within a jurisdiction own the infrastructure and lease it to any and all service providers who are willing to pony up and pay the freight. Create the competition at layer 2-7 of the OSI model, not at layer 1, where the barrier to entry is the greatest.
Admittedly, the disadvantage is that it forces consumers who may never want any type of telecom access to pay for the infrastructure along with everyone else. |
