TELECOM Digest OnLine - Sorted: Re: Information Wants to be Free

Re: Information Wants to be Free

Lisa Hancock (
24 Jan 2006 13:25:24 -0800 wrote:

> This is nothing new, and not necessarily bad. Monopolies, critical
> infrastructure and other industries should be and are regulated for
> the good of the many over the profits for the few.

Not quite correct.

A very few industries are given exclusive franchises and thus monopoly
status in return for having their services and rates regulated by the
government. Such companies were restrictly as to the businesses they
may do.

"Infrastructure" is a very vague word. There is no such regulation
except in a very few instances.

It is not now nor ever has been the policy of the United States to
"protect the good of the many over the profits for the few". This
country always believed in free enterprise. If I invent something
that costs me $1.00 to make but charge $1 million to sell and I have
willing buyers, that is my right. I have a right of patent
protection. (We do have laws against dishonest behavior and creating
a monopoly by illegally killing off your competition, but that's not
the issue here.)

After 1983 the Bell System agreed to cease being a monopoly. That
meant other carriers were freely allowed to compete and they did so in
droves. That also meant that the sucessor Bell System--now split into
many companies--were allowed to go into other lines of business. It is
critical to remember that the 1983 divesture was a TWO-WAY agreement.

> The phone company is an infrastructure. They have no business
> controlling content, especially when they want to compete with the
> content delivered over their government-sanctioned-monopoly
> infrastructure.

As mentioned, unless explicitly directed, "infrastructure" is not
regulated as a result of the 1983 divesture and other court decisions.
That's why today we have MCI, Sprint, a host of others, as well as
VOIP providers. That's why people can and do use their cable-TV for
their telephone and internet service. It's technically possible to
even use power lines.

I point out that the airlines were once regulated but no more. They
can come and go as they wish, setting whatever fares and services they
want. They can and do own and operate vacation destinations and
provide fare discounts. At one time that was forbidden but not now.
In other words, if I own a result and an airline, I could require all
my guests to use that particular airline.

I also point out that we've allowed competition in infrastructure for
many years. We allowed the private automobile and jitneys to compete
with the existing streetcar system in city streets. Generally that
killed off the streetcar company. We built an interstate highway
system and massive airports to compete with mainline passenger trains,
and killed off passenger trains. (Trains were explicitly forbidden to
fly planes or run buses to keep up, BTW.)

> You can say that it's just as feasable for someone else to deploy the
> fiber circuits that Verizon has been installing lately, but that's not
> true. They already have existing right-of-way agreements and they're
> only deploying in their current market -- in other words, it's
> essentially upgrading existing customers.

No. The new fibre and their new services are being installed under
new and separate agreements Verizon acquired, just as the cable
companies acquired agreements to lay their cable not that long ago,
and cell phone towers acquired permission to build towers in
residential areas not zoned for them.

After divesture, AT&T was free to do as it wished and it did. It took
a risk that its new directions would be more profitable. There was no
guarantee. As it turned out, AT&T's ventures into NCR computers,
cable TV, and cell phones didn't work out very well and AT&T no longer
exists. The point is that AT&T was no longer protected and it's gone.

Verizon is taking the same risk. Note on this newsgroup how happy
some people are with VOIP service -- that eliminates Verizon altogether.
[I don't agree about VOIP.] It's entirely possible that cable and
other newcomers will outdo Verizon. At one time General Motors held
50% of the auto market and was seen as the most powerful corporation.
It no longer holds that status. The same thing may happen to Verizon.

Since Verizon now has competitors, it is only fair that Verizon be
allowed to compete as well. Comcast Cable includes content as well as
transmission. Verizon should be able to do likewise if it so chooses.

You also forget that as a legacy company Verizon (and others) carry
legacy obligations that newcomers don't have. VOIPs don't have to
provide discounted service to the poor or deadbeat payers or in
unprofitable areas as Verizon does, as one example.

> Also, competitive infrastructure usually isn't a good thing. It's
> been tried in the past -- the early power industry involved several
> companies competing to deliver electricity to the same area, and it
> was a mess.

I agree with you there. In the 1970s many technical experts argued
against the break up of the Bell System for the same reasons. The
problems they foresaw came true and we live with them today in many
situations. But national policy was set in 1983 with Bell System
divesture and subsequent decisions for a free market.

Really, per your argument, I shouldn't have a separate cable TV
company, that should be done by the phone company, especially now.
But that's not the policy.

We created a semi-free market in the power industry. As a result we
had crazy situations and I blame that for the recent NYC blackout,
which apparently arose from one of those new companies being unable to
control power fluctuations in its circuits. The national grid was
built for backup purposes, not wholesale trading purposes.

> Critical infrastructure, such as water delivery, waste management and
> the cables that provide the physical interconnections for power and
> communication need to be regulated and controlled. The competition
> should be among the content providers.

Basically, I found it very objectionable that certain companies would
be allowed to formulate business combos any way they wanted while
others could not. That is NOT in the public interest and historically
proven bad.

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