3 ms·

Eh many states passed state-wide franchise laws that eliminated city-by-city rules. It didn't help much. Installing fiber is damn expensive. It is a hugely cap

Eh many states passed state-wide franchise laws that eliminated city-by-city rules. It didn't help much. Installing fiber is damn expensive. It is a hugely capital-intensive business. A sword is constantly hanging over your head as the entrenched monopolies can cut prices to $10/month at any moment in any market where you are laying fiber (trivial when they are bringing in $100/mo per customer where they are the only choice). The only reasonable solution for natural monopolies is a regulated utility or government-owned infrastructure. Electrical choice is often done via the former, roads and water are examples of the latter. In either case one entity should lay fiber to every home, then charge $cost + $expected_future_capital_contribution (and +7% profit if a regulated utility). Any ISP that wants to compete puts in the order and the fiber owner routes a drop to their equipment at the local CO. Some great new technology enables 10Gbps? Not a problem - your ISP owns the ONT and can swap it out. The utility only maintains the fiber, which unlike copper doesn't have water-infiltration or degradation problems. Even though I have sonic fiber in SF it is actually a waste: on the poles in front of my house there are three completely duplicated pieces of communications infrastructure: copper phone lines, copper cable lines, and sonic fiber. If ATT ever bothers to install fiber then I'll have duplicate fiber lines. That is a deadweight loss for basically no benefit and only enables 2-3 competitors rather than potentially 20 or 30. No system is perfect and free markets are simply terrible at handling natural monopolies.

AlphaSite 9y ago
This is basically what BT openreach is. A very heavily regulated utility.
- rayiner 9y ago
  BT OpenReach is a regulated utility, but not a very heavily regulated utility. Ofcom did what the FCC managed to completely screw up: create an unbundling regime that still made investing in infrastructure worthwhile. The FCC set wholesale rates so low that it killed DSL as a viable competitor. Ofcom, meanwhile, conducted tons of economic analysis before privatizing BT, and set rates high enough where BT OpenReach is actually about as profitable as Comcast or TWC. (Of course, the new government is in the process of trying to completely screw up BT with new universal service obligations).
notyourday 9y ago
> Installing fiber is damn expensive. It is a hugely capital-intensive business. A sword is constantly hanging over your head as the entrenched monopolies can cut prices to $10/month at any moment in any market where you are laying fiber (trivial when they are bringing in $100/mo per customer where they are the only choice). That's not correct. Installing fiber is extremely cheap. DWDM prisms are cheap. Long range 10G optics is dirt cheap. > Even though I have sonic fiber in SF it is actually a waste: on the poles in front of my house there are three completely duplicated pieces of communications infrastructure: copper phone lines, copper cable lines, and sonic fiber. If ATT ever bothers to install fiber then I'll have duplicate fiber lines. That is a deadweight loss for basically no benefit and only enables 2-3 competitors rather than potentially 20 or 30. And this "we want perfection", ladies and gentlemen, is why you are not getting telecom competition.

AlphaSite 9y ago

This is basically what BT openreach is. A very heavily regulated utility.

rayiner 9y ago
BT OpenReach is a regulated utility, but not a very heavily regulated utility. Ofcom did what the FCC managed to completely screw up: create an unbundling regime that still made investing in infrastructure worthwhile. The FCC set wholesale rates so low that it killed DSL as a viable competitor. Ofcom, meanwhile, conducted tons of economic analysis before privatizing BT, and set rates high enough where BT OpenReach is actually about as profitable as Comcast or TWC. (Of course, the new government is in the process of trying to completely screw up BT with new universal service obligations).

notyourday 9y ago

> Installing fiber is damn expensive. It is a hugely capital-intensive business. A sword is constantly hanging over your head as the entrenched monopolies can cut prices to $10/month at any moment in any market where you are laying fiber (trivial when they are bringing in $100/mo per customer where they are the only choice). That's not correct. Installing fiber is extremely cheap. DWDM prisms are cheap. Long range 10G optics is dirt cheap. > Even though I have sonic fiber in SF it is actually a waste: on the poles in front of my house there are three completely duplicated pieces of communications infrastructure: copper phone lines, copper cable lines, and sonic fiber. If ATT ever bothers to install fiber then I'll have duplicate fiber lines. That is a deadweight loss for basically no benefit and only enables 2-3 competitors rather than potentially 20 or 30. And this "we want perfection", ladies and gentlemen, is why you are not getting telecom competition.