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> _You_ _cannot_ _legislate_ _good_ _behavior_ _into_ _monopolies_ Why not? Yes, breaking up monopolies is good but that doesn't mean we can't regulate industr

> _You_ _cannot_ _legislate_ _good_ _behavior_ _into_ _monopolies_ Why not? Yes, breaking up monopolies is good but that doesn't mean we can't regulate industries before the point where things get so bad that there is enough political will to break them up.

exabrial 6y ago
I mean, feel free to provide an example where we successfully regulated a monopoly to encourage competition and consumer choice...
- jmm5 6y ago
  Obviously you can't have a competition with a monopoly in place. Regulation could help to keep prices down and to expand access in areas covered by only a single broadband provider.
- mortehu 6y ago
  Cellular carriers and electric power providers, and the success has been repeated in many countries.
- edgyquant 6y ago
  The Microsoft case seemed to work out well
- jasonwatkinspdx 6y ago
  Basically anything that historically falls under common carrier regs. None of this debate is new. We saw it with railroads. Natural monopolies need counterbalancing regulation. This isn't even remotely a controversial statement in economics.
  - dragonwriter 6y ago
    > Natural monopolies need counterbalancing regulation. This isn't even remotely a controversial statement in economics. Unless your argument is that the Austrian and Chicago schools of economics doesn't actually exist, this is quite wrong, since the Austrian school denies the existence of natural monopoly and argues that harmful monopoly can only exist as a product of government regulation, and the Chicago school likewise holds that absent regulation, monopoly is a transient condition, not a stable one; both favor removing regulations that they see as stabilizing harmful monopolies, rather than regulating to manage naturally-formed-and-self-stabilizing monopolies, which they don't acknowledge the existence of. Now, I think the Chicago/Austrian positions on monopolies are wrong, but you really can't reasonably deny that this is a fundamental area of controversy.
    - jasonwatkinspdx 6y ago
      Yes. I am entirely comfortable in saying that the economic consensus is strongly against the Austrian and Chicago perspectives. Both of these schools value prior ideology over empirical data. It's a "debate" on forums like this, but not even remotely so amongst the economists I talk to.
      - dragonwriter 6y ago
        > Both of these schools value prior ideology over empirical data. Austrian overtly so, Chicago less so, but, yes, its another issue that "is economics an empirical science" is also a controversial position in economics. > but not even remotely so amongst the economists I talk to. That's a very different claim than your original one. That last qualifier does quite a bit of work.
        jasonwatkinspdx 6y ago
        Yeah, it does the work of every actual credentialed economist I know has nothing but utter contempt for praxeology. As should be. As should you, if you cared enough.
    - nine_k 6y ago
      The problem is that a monopoly may naturally be disrupted in decades, while people want an improvement during their precious only lifetimes. A temporary regulation could possibly help, but making it temporary is the hard part. And if it lingers, the inefficiencies it creates let some companies become incumbents, and, with some luck, even monopolies.
      - p1necone 6y ago
        I'm more inclined to think that under a completely unregulated free market a monopoly today would instead be more likely to turn into a de-facto nation state over the course of decades. But this is purely speculation (not entirely unprompted by reading speculative fiction). Is there any evidence that unregulated free markets actually tend towards competition, rather than consolidation?
  - kanox 6y ago
    ISPs are NOT a natural monopoly, you can have multiple sets of wires going to every building. This is the situation in my part of Europe and my internet is pretty damn fast. Treating ISPs as a monopoly is fundamentally wrong.
    - wtallis 6y ago
      Multiple sets of wires going to every building is feasible and perhaps even reasonable when we're talking about an apartment building. But digging multiple trenches along suburban and rural roads and driveways leading to single-family homes is very wasteful. It's usually prohibitively expensive for the second company that wants to come into town, and is basically guaranteed to be a negative ROI for the third company that tries to lay fiber to customers who already have two incumbent options. In the US, Google Fiber has had limited success entering a handful of carefully-picked markets where the incumbent options are rotting copper POTS wires vs coax that can only compete on downstream bandwidth. In some of those markets, the incumbent phone companies have replaced some of their copper with fiber, but a third residential fiber option is still unheard-of. That may not fit the strictest definition of natural monopoly, but it's pretty close: in areas where both Google Fiber and eg. AT&T fiber are competing against coax, it would not be surprising to see one of the two fiber ISPs give up. We've already seen Google give up on bundling TV service, and both Google and AT&T are very reserved about further expansions.
      - zaarn 6y ago
        Also in Europe the owner of a cable to a build is required to rent it out to other providers at cost. So if DTAG builds a cable to my apartment complex, then I can later go an buy a DSL from Vodafone, despite the line begin DTAG. Since it's at cost, Vodafone has no further costs than what they would pay if they put down the line themselves, they even save some since they typically delegate support to DTAG technicians for on-site issues.
        q3k 6y ago
        (FWIW this is called Local Loop Unbundling [1]) [1] - https://en.wikipedia.org/wiki/Local-loop_unbundling https://en.wikipedia.org/wiki/Local-loop_unbundling
- hardtke 6y ago
  Before the 1980s long distance calls from AT&T landlines were very expensive. The FCC forced AT&T to allow competitors to use their infrastructure at a reasonable price. MCI and Sprint entered and the cost of long distance calls fell pretty quickly. Sadly, this may partially explain our terrible and expensive cell phone service. In many countries, the first competition to the national phone carrier were mobile services so the early mobile entrants were competing against massively inflated prices for long distance calling and quickly built high quality alternatives.
- wtallis 6y ago
  It seems odd that you assume the goal of regulating a monopoly must be to encourage competition and consumer choice, ie. breaking up the monopoly, directly or indirectly. Why is enforcing reasonable prices and business practices not an allowable goal?
- jen20 6y ago
  BT Openreach and Local Loop Unbundling comes to mind.
zbrozek 6y ago
Because companies are really good at optimizing and the outcomes are usually bad behavior that is not-yet legislated. It's a cat and mouse game. Much better to have a plethora of competition so that the competitive market provides the tight feedback loop. With wireless carriers the MVNO rules mean that I can shop around and jump ship pretty easily. I just switched providers a couple of months ago. Look at PG&E. They're badly behaved but also highly regulated.

exabrial 6y ago

I mean, feel free to provide an example where we successfully regulated a monopoly to encourage competition and consumer choice...

jmm5 6y ago
Obviously you can't have a competition with a monopoly in place. Regulation could help to keep prices down and to expand access in areas covered by only a single broadband provider.
mortehu 6y ago
Cellular carriers and electric power providers, and the success has been repeated in many countries.
edgyquant 6y ago
The Microsoft case seemed to work out well
jasonwatkinspdx 6y ago
Basically anything that historically falls under common carrier regs. None of this debate is new. We saw it with railroads. Natural monopolies need counterbalancing regulation. This isn't even remotely a controversial statement in economics.
- dragonwriter 6y ago
  > Natural monopolies need counterbalancing regulation. This isn't even remotely a controversial statement in economics. Unless your argument is that the Austrian and Chicago schools of economics doesn't actually exist, this is quite wrong, since the Austrian school denies the existence of natural monopoly and argues that harmful monopoly can only exist as a product of government regulation, and the Chicago school likewise holds that absent regulation, monopoly is a transient condition, not a stable one; both favor removing regulations that they see as stabilizing harmful monopolies, rather than regulating to manage naturally-formed-and-self-stabilizing monopolies, which they don't acknowledge the existence of. Now, I think the Chicago/Austrian positions on monopolies are wrong, but you really can't reasonably deny that this is a fundamental area of controversy.
  - jasonwatkinspdx 6y ago
    Yes. I am entirely comfortable in saying that the economic consensus is strongly against the Austrian and Chicago perspectives. Both of these schools value prior ideology over empirical data. It's a "debate" on forums like this, but not even remotely so amongst the economists I talk to.
    - dragonwriter 6y ago
      > Both of these schools value prior ideology over empirical data. Austrian overtly so, Chicago less so, but, yes, its another issue that "is economics an empirical science" is also a controversial position in economics. > but not even remotely so amongst the economists I talk to. That's a very different claim than your original one. That last qualifier does quite a bit of work.
      - jasonwatkinspdx 6y ago
        Yeah, it does the work of every actual credentialed economist I know has nothing but utter contempt for praxeology. As should be. As should you, if you cared enough.
  - nine_k 6y ago
    The problem is that a monopoly may naturally be disrupted in decades, while people want an improvement during their precious only lifetimes. A temporary regulation could possibly help, but making it temporary is the hard part. And if it lingers, the inefficiencies it creates let some companies become incumbents, and, with some luck, even monopolies.
    - p1necone 6y ago
      I'm more inclined to think that under a completely unregulated free market a monopoly today would instead be more likely to turn into a de-facto nation state over the course of decades. But this is purely speculation (not entirely unprompted by reading speculative fiction). Is there any evidence that unregulated free markets actually tend towards competition, rather than consolidation?
- kanox 6y ago
  ISPs are NOT a natural monopoly, you can have multiple sets of wires going to every building. This is the situation in my part of Europe and my internet is pretty damn fast. Treating ISPs as a monopoly is fundamentally wrong.
  - wtallis 6y ago
    Multiple sets of wires going to every building is feasible and perhaps even reasonable when we're talking about an apartment building. But digging multiple trenches along suburban and rural roads and driveways leading to single-family homes is very wasteful. It's usually prohibitively expensive for the second company that wants to come into town, and is basically guaranteed to be a negative ROI for the third company that tries to lay fiber to customers who already have two incumbent options. In the US, Google Fiber has had limited success entering a handful of carefully-picked markets where the incumbent options are rotting copper POTS wires vs coax that can only compete on downstream bandwidth. In some of those markets, the incumbent phone companies have replaced some of their copper with fiber, but a third residential fiber option is still unheard-of. That may not fit the strictest definition of natural monopoly, but it's pretty close: in areas where both Google Fiber and eg. AT&T fiber are competing against coax, it would not be surprising to see one of the two fiber ISPs give up. We've already seen Google give up on bundling TV service, and both Google and AT&T are very reserved about further expansions.
    - zaarn 6y ago
      Also in Europe the owner of a cable to a build is required to rent it out to other providers at cost. So if DTAG builds a cable to my apartment complex, then I can later go an buy a DSL from Vodafone, despite the line begin DTAG. Since it's at cost, Vodafone has no further costs than what they would pay if they put down the line themselves, they even save some since they typically delegate support to DTAG technicians for on-site issues.
      - q3k 6y ago
        (FWIW this is called Local Loop Unbundling [1]) [1] - https://en.wikipedia.org/wiki/Local-loop_unbundling https://en.wikipedia.org/wiki/Local-loop_unbundling
hardtke 6y ago
Before the 1980s long distance calls from AT&T landlines were very expensive. The FCC forced AT&T to allow competitors to use their infrastructure at a reasonable price. MCI and Sprint entered and the cost of long distance calls fell pretty quickly. Sadly, this may partially explain our terrible and expensive cell phone service. In many countries, the first competition to the national phone carrier were mobile services so the early mobile entrants were competing against massively inflated prices for long distance calling and quickly built high quality alternatives.
wtallis 6y ago
It seems odd that you assume the goal of regulating a monopoly must be to encourage competition and consumer choice, ie. breaking up the monopoly, directly or indirectly. Why is enforcing reasonable prices and business practices not an allowable goal?
jen20 6y ago
BT Openreach and Local Loop Unbundling comes to mind.

zbrozek 6y ago

Because companies are really good at optimizing and the outcomes are usually bad behavior that is not-yet legislated. It's a cat and mouse game. Much better to have a plethora of competition so that the competitive market provides the tight feedback loop. With wireless carriers the MVNO rules mean that I can shop around and jump ship pretty easily. I just switched providers a couple of months ago. Look at PG&E. They're badly behaved but also highly regulated.