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GP said "regardless of whether the natural monopoly is municipal or Comcast", i.e. both are bad options. Not sure why you are asking the GP to defend a claim th

GP said "regardless of whether the natural monopoly is municipal or Comcast", i.e. both are bad options. Not sure why you are asking the GP to defend a claim that wasn't made.

toomuchtodo 10y ago
Because a monopoly isn't inherently bad, if regulated properly. My monopoly water, gas, and electric providers do just fine; all highly reliably (and either a small or no profit right is granted). Why not my internet? Why can't it be a regulated utility? Because of fear mongers and corruption. Full steam ahead on municipal bandwidth it appears, and coming for politicians with pitchforks who oppose it.
- chimeracoder 10y ago
  > Because a monopoly isn't inherently bad, if regulated properly. My monopoly water, gas, and electric providers do just fine; all highly reliably (and either a small or no profit right is granted). A monopoly provider is always bad for the consumer. (Occasionally, it is less bad for the consumer than any feasible alternative, but it is always a sign that the consumer is receiving the "short end" of the stick)[0]. For so-called "natural monopolies", the most that regulation can do is reduce that disparity, but it cannot eliminate it - and it does this for a hefty premium (the price of the regulation). In most (but not all) markets, utility companies are the textbook example of natural monopolies. But there is no reason to believe that the entire supply chain of residential Internet access is a natural monopoly. Furthermore, natural monopolies aren't really a "good" thing; they're just unavoidable in some circumstances. For example, utility companies, whether privately or publicly run, typically do horribly with customer satisfaction ratings, response times for non-emergency services, and so on. The fact that their customers' demand is completely inelastic is the main reason for this. A monopoly is pretty much inherently bad; it just so happens that sometimes it's unavoidable. But, as OP said, there's no reason to sanction a monopoly provider for an industry (or part of an industry) in which it is avoidable. > either a small or no profit right is granted Just because something is nominally run by the public sector or as a "non-profit" doesn't mean that a profit is not being made off the good/service chain. The difference is where that profit is accounted for on the books. [0] This can be illustrated very easily using cost curves; I'm speaking in colloquial terms like "short end of the stick" specifically to avoid the need for economics jargon, but it's a pretty straightforward and fundamental lemma from basic supply and demand.
  - toomuchtodo 10y ago
    > A monopoly is pretty much inherently bad; it just so happens that sometimes it's unavoidable. But, as OP said, there's no reason to sanction a monopoly provider for an industry (or part of an industry) in which it is avoidable. But it is clearly not avoidable. If one of the largest tech companies in the world (with enormous profits and cash reserves) cannot afford to deploy fiber in major cities, it is clear that the private sector cannot reliably and affordably provide this service on the scale required. No further proof is necessary that the marketplace will resolve this issue.
    - chimeracoder 10y ago
      > But it is clearly not avoidable. If one of the largest tech companies in the world (with enormous profits and cash reserves) cannot afford to deploy fiber in major cities, it is clear that the private sector cannot reliably and affordably provide this service on the scale required. First of all, the fact that one company tries something and fails doesn't mean that the entire problem is intractable. It means that that particular attempt didn't work. Other variants might. Pretty much every single successful startup you read about is doing something that was previously attempted unsuccessfully or with less success. And to that point, Google's model wasn't fundamentally different from the model used by existing ISPs[0] - they were doing almost the exact same thing (deploying {fiber, cable} from Tier 1 networks to the last mile) and structured their pricing in the same way. Their main goal was to force competition, not to dramatically change the fundamental business model of ISPs. For example, one proposal that has been thrown around is the unbundling of the last mile, in which the lines are deployed and maintained by one entity but leased out to multiple private ISPs who actually service the customers[1]. There are other possibilities as well that haven't been tested yet either. Google failed at being a "better traditional ISP", but that doesn't mean that: 1) anyone who tries to be a "better traditional ISP" is doomed to fail, or 2) Google (or someone else) can't be successful as an ISP by using a different, non-traditional model altogether [0] with one exception: they sought (and received) carve-out agreements [1] Incidentally, this is what's already done with wireless networks (MVNOs) and in some places (like NYC) for electricity supply (supply only, not the wires).
    - 10y ago

GP said "regardless of whether the natural monopoly is municipal or Comcast", i.e. both are bad options. Not sure why you are asking the GP to defend a claim that wasn't made.

toomuchtodo 10y ago

Because a monopoly isn't inherently bad, if regulated properly. My monopoly water, gas, and electric providers do just fine; all highly reliably (and either a small or no profit right is granted). Why not my internet? Why can't it be a regulated utility? Because of fear mongers and corruption. Full steam ahead on municipal bandwidth it appears, and coming for politicians with pitchforks who oppose it.

chimeracoder 10y ago
> Because a monopoly isn't inherently bad, if regulated properly. My monopoly water, gas, and electric providers do just fine; all highly reliably (and either a small or no profit right is granted). A monopoly provider is always bad for the consumer. (Occasionally, it is less bad for the consumer than any feasible alternative, but it is always a sign that the consumer is receiving the "short end" of the stick)[0]. For so-called "natural monopolies", the most that regulation can do is reduce that disparity, but it cannot eliminate it - and it does this for a hefty premium (the price of the regulation). In most (but not all) markets, utility companies are the textbook example of natural monopolies. But there is no reason to believe that the entire supply chain of residential Internet access is a natural monopoly. Furthermore, natural monopolies aren't really a "good" thing; they're just unavoidable in some circumstances. For example, utility companies, whether privately or publicly run, typically do horribly with customer satisfaction ratings, response times for non-emergency services, and so on. The fact that their customers' demand is completely inelastic is the main reason for this. A monopoly is pretty much inherently bad; it just so happens that sometimes it's unavoidable. But, as OP said, there's no reason to sanction a monopoly provider for an industry (or part of an industry) in which it is avoidable. > either a small or no profit right is granted Just because something is nominally run by the public sector or as a "non-profit" doesn't mean that a profit is not being made off the good/service chain. The difference is where that profit is accounted for on the books. [0] This can be illustrated very easily using cost curves; I'm speaking in colloquial terms like "short end of the stick" specifically to avoid the need for economics jargon, but it's a pretty straightforward and fundamental lemma from basic supply and demand.
- toomuchtodo 10y ago
  > A monopoly is pretty much inherently bad; it just so happens that sometimes it's unavoidable. But, as OP said, there's no reason to sanction a monopoly provider for an industry (or part of an industry) in which it is avoidable. But it is clearly not avoidable. If one of the largest tech companies in the world (with enormous profits and cash reserves) cannot afford to deploy fiber in major cities, it is clear that the private sector cannot reliably and affordably provide this service on the scale required. No further proof is necessary that the marketplace will resolve this issue.
  - chimeracoder 10y ago
    > But it is clearly not avoidable. If one of the largest tech companies in the world (with enormous profits and cash reserves) cannot afford to deploy fiber in major cities, it is clear that the private sector cannot reliably and affordably provide this service on the scale required. First of all, the fact that one company tries something and fails doesn't mean that the entire problem is intractable. It means that that particular attempt didn't work. Other variants might. Pretty much every single successful startup you read about is doing something that was previously attempted unsuccessfully or with less success. And to that point, Google's model wasn't fundamentally different from the model used by existing ISPs[0] - they were doing almost the exact same thing (deploying {fiber, cable} from Tier 1 networks to the last mile) and structured their pricing in the same way. Their main goal was to force competition, not to dramatically change the fundamental business model of ISPs. For example, one proposal that has been thrown around is the unbundling of the last mile, in which the lines are deployed and maintained by one entity but leased out to multiple private ISPs who actually service the customers[1]. There are other possibilities as well that haven't been tested yet either. Google failed at being a "better traditional ISP", but that doesn't mean that: 1) anyone who tries to be a "better traditional ISP" is doomed to fail, or 2) Google (or someone else) can't be successful as an ISP by using a different, non-traditional model altogether [0] with one exception: they sought (and received) carve-out agreements [1] Incidentally, this is what's already done with wireless networks (MVNOs) and in some places (like NYC) for electricity supply (supply only, not the wires).
  - 10y ago