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What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

  • From: David Barak
  • Date: Tue Nov 15 09:29:42 2005
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--- Owen DeLong <owen@delong.com> wrote:
> True
> competition requires the ability
> for multiple providers to enter into the market,
> including the creation
> of new providers to seize opportunities being
> ignored by the existing ones.

Technically, lots of other providers CAN enter the
market - it's just very expensive to do so.  If there
are customers who are not receiving service from one
of the incumbent providers, a third party is certainly
welcome to {dig a trench | build wireless towers | buy
lots of well-trained pigeons for RFC 1419 access} and
offer the services to the ignored customers.

The problem is that the capital expenditures required
in doing so are very, very high, and most companies
don't see the profit in doing so.

> If two companies can act as gatekeeper for the
> entire market in a given
> area, that is not an environment where market forces
> carry much meaning.

Actually, here's where I'd disagree: market forces are
exactly the thing which is keeping other providers
OUT.  It's too expensive for them to buy their way
into these areas, and during all of the time when
access was mandated to be (relatively) cheap by law,
very few third parties actually built their own
infrastructure all the way to homes.  There are some
competitive cable plants in some cities (I remember
Starpower/RCN doing this in DC), but I'm not aware of
any residential phone providers who built all the way
out to houses exclusively on their own infrastructure.
 

This IS the market at work.  If you want it to be
different, what you want is more, not less regulation.
 That may or may not be a good thing, but let's just
be very clear about it.



David Barak
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