TELECOM Digest OnLine - Sorted: Re: Broadband Competition Must Surely be Working

Re: Broadband Competition Must Surely be Working
25 Aug 2005 17:59:04 GMT

In article <>,
<> wrote:

> Many stores also sell their own house brand. If you like a particular
> house brand, you may only get it at the associated store, not at any
> other store. If you like WalMart's t-shirts, don't look for them at
> JCPenney. That's bundling.

You've inverted the analogy. You're saying if I want to use Verizon
Online/MSN I shouldn't expect to get it through Covad. And I agree. A
correct analogy would be a store ONLY offering its own house brand,
while being the only retail outlet in the area. If I don't like the
house brand then I'm screwed.

> So, if a telecom provider wants to bundle services, why shouldn't it?

We've seen the effects of that many times. And each time it involved a
monopoly (or near-monopoly) the results were bad enough to get the
government involved. For instance, in the old days you HAD to use IBM
software and peripherals with your IBM mainframe. It was called
"bundling", and the government eventually stepped in and forced them
to unbundle their products and services.

Most of the "examples" you cited aren't valid analogies. In almost
every case the "bundles" are value-added services or features that
might make using one service slightly mor attractive than using a
competing one. The Verizon "bundling" is much more like the sporting
event, where you're FORCED to use and pay for the parking facilities
associated with the event.

John Meissen

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