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"The first is that power companies are regulated utility monopolies that have to respond to state governments." This isn't entirely true/relevant. The distrib

by ohyes 16y ago

"The first is that power companies are regulated utility monopolies that have to respond to state governments." This isn't entirely true/relevant. The distribution network is regulated because (rightly) we don't want to have everyone running electric cables everywhere. In CT, you cannot choose your electricity distributor, but you can tell your electricity distributor who to buy your electricity from. (They call you up and tell you what their price per mwh is, and you can pick that company or a different one. You can also choose based on what source the energy is coming from solar/coal/nuclear etc.) Similarly, radio bandwidth is regulated (auctioned to the highest bidder), because there are only so many frequencies available. It would be very difficult to have a startup competing with ATT or Sprint, for example, because of the exorbitant cost of buying a chunk of spectrum to use (aside from hardware cost). Maybe cell networks/bandwidth should be better regulated, based on a similar model to Connecticut's electricity, where the data is routed to a cell tower run by a local, government regulated monopoly, and then the actual internet connectivity is provided by different suppliers. It seems that auctioning bandwidth has lead to monopolies that aren't really what we all want.

tptacek 16y ago
It's hard for me to take too seriously the idea that the wireless market is locked up given that its key players didn't exist 10 years ago; what's deceptive about it is, they were rolled up into decades-old brands, and so it seems like "Ma Bell AT&T" set the market for wireless. That's not what happened. It's also unclear to me how much this has to do with "monopoly power" and how much it is simply the case that mass Internet access is an extremely capital intensive business that will always be led by large companies.
- ohyes 16y ago
  I don't know anything about the history of the wireless market, but it seems to me that it is locked up and (to some extent) capital intensive by virtue of the way that we regulate it. If you look here: http://wireless.fcc.gov/auctions/default.htm?job=auctions_all http://wireless.fcc.gov/auctions/default.htm?job=auctions_al... You can see the amount of money that goes into the auctioning of the bandwidth. You have to pay in the millions of dollars before you can build a single tower. It is a capital intensive business, and I don't suggest otherwise, but it seems to me that there is absolutely no incentive for any of the major players to innovate, as the market is locked down as soon as a chunk of bandwidth has been bought. It would be nice if there were another way of structuring it to encourage competition in this particular market. One possibility might be to have a local distributor, and then competing vendors that work through that distributor. That is just of the top of my head, so I'm sure there are problems with it (I can certainly think of a few).

by ohyes 16y ago

tptacek 16y ago

It's hard for me to take too seriously the idea that the wireless market is locked up given that its key players didn't exist 10 years ago; what's deceptive about it is, they were rolled up into decades-old brands, and so it seems like "Ma Bell AT&T" set the market for wireless. That's not what happened. It's also unclear to me how much this has to do with "monopoly power" and how much it is simply the case that mass Internet access is an extremely capital intensive business that will always be led by large companies.

ohyes 16y ago
I don't know anything about the history of the wireless market, but it seems to me that it is locked up and (to some extent) capital intensive by virtue of the way that we regulate it. If you look here: http://wireless.fcc.gov/auctions/default.htm?job=auctions_all http://wireless.fcc.gov/auctions/default.htm?job=auctions_al... You can see the amount of money that goes into the auctioning of the bandwidth. You have to pay in the millions of dollars before you can build a single tower. It is a capital intensive business, and I don't suggest otherwise, but it seems to me that there is absolutely no incentive for any of the major players to innovate, as the market is locked down as soon as a chunk of bandwidth has been bought. It would be nice if there were another way of structuring it to encourage competition in this particular market. One possibility might be to have a local distributor, and then competing vendors that work through that distributor. That is just of the top of my head, so I'm sure there are problems with it (I can certainly think of a few).