Re: [PLUG] DCANET response

[Rich Freeman <r-plug@thefreemanclan.net>]

On Tue, Jul 31, 2012 at 8:34 AM, Jack Hill <jackhill@jackhill.us> wrote:
> That's great and all, and I am pretty pessimistic about government, but
> that can't explain the anti-customer practices of wireless carriers.

All of these telecommunications technologies involve last-mile
problems, scarce resources like spectrum, and network effects.  That
makes them all natural monopolies.  Sure, in the case of the wired
world those monopolies often have the force of law as well.  However,
if you could choose your phone company but only had 2-3 choices,
chances are that things wouldn't be much better unless some of those
choices were small companies (and a small company probably couldn't
compete).

Regulatory capture is obviously a big problem here.  The local PUCs
don't do a good job either - just look at all the fees/etc on your
basic phone bill.

That's why I think what we need to do is attack the vertical
integration.  You don't see your power utility doing this kind of
stuff, because there is little money to be made in trying to charge
less per kWh for a Sony TV vs a Panasonic one.  What the telcos are
all trying to do is to leverage their control over the last mile to
gain market share in the much more lucrative content market, or to
seek rent from those who have market share.  If you just got to a
pay-by-the-byte or pay-by-the-pair model then suddenly they have
incentive to improve capacity and not stifle it, they don't care whose
data you download as long as you keep the bytes flowing, and so on.

Plus I think getting rid of the integration actually is a better
free-market solution.  You can basically take a huge chunk of the
market and be hands-off.  Youtube can do whatever it wants because
anybody can start a video hosting site as long as they pay by the byte
(and with non-discriminatory pricing anybody can get in at the ground
floor).

Rich
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