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

Re: Broadband Competition Must Surely be Working
Sat, 27 Aug 2005 04:54:46 -0600

Garrett Wollman wrote:

> Because the market for residential communications services cannot
> support what economists call "effective competition". The barriers
> to entry in "local loop" services are so high that allowing bundling
> stifles competition on the services built on top. responded:

> I don't agree about the barriers. As I mentioned, our local cable
> company, while still a small independent outfit, managed to go
> through and wire us with coax and then come back and use fibre
> optic.

Garrett responded:

> Your local cable company was granted a monopoly on cable TV
> service in exchange for wiring your community. Such
> monopolies are now forbidden.

Forbidden by whom?

In my experience, CATV franchises have never been legal monopolies,
even in Massachusetts. To the extent that cable networks have turned
out to be de-facto monopolies isn't the result of any legal changes;
it's simply confirmation of John Levine's statement that:

> Because the telecom provider is a monopoly, or now maybe a duopoly.
> The only companies with wires into everyone's house are the phone
> company and the cable company, and that is as true now as it was 20
> years ago. The first mover advantage is insurmountable, and although
> it would be legal for someone to raise $100 billion and overbuild a
> new phone infrastructure alongside the one we have, it'll never
> happen.

Neal McLain

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