16 ms·

Utilities like telecoms can't be free market due to the natural monopoly effect. We can't have a hundred different companies burying infrastructure or stringin

by Teever 4y ago

Utilities like telecoms can't be free market due to the natural monopoly effect. We can't have a hundred different companies burying infrastructure or stringing up lines on poles.

bonestamp2 4y ago
An extra 2 or 3 might be ok.
- dmix 4y ago
  Seriously, the world will not end because more than two companies are laying fibre. Especially as the country grows in size. This weak apologia for monopolies is what keeps them around. Even when the cost created via gov-backed pseudo-private monopolies are obviously worse than their hypotheticals.
xwolfi 4y ago
You can, but profitability is limited. You can have 5/6 maybe max in a dense country. With 4 in France, they each slowly fibered the whole country reaching an approximate 25% coverage each and compete in wave: one day they are at 20MBps and suddenly one explodes at 100 and the rest run after to restabilize market share. If they dont they all get fined by the regulator looking at european average speeds.
- specialist 4y ago
  Yes and: Profitability is predetermined. Converting public goods and services into securities. Ideally. So a public utility issues bonds, instead of stocks.
  - xwolfi 4y ago
    Not sure what you mean, bonds and stocks are different liabilities and a state utility by definition cannot issue equity or the state would lose ownership. It means they must pay their bond coupons and therefore are very risk adverse and change resistant. A security-emitting entity doesnt need to pay back the debt too much (it should but doesnt have to, via dividend) and therefore can afford to try things to raise returns for both shareholders and management and absorb failure. The worst situation is when a state utility tries to innovate and fails: this leads to privatization which actually transforms it in a public companies (the words are weird: state companies are not directly publicly owned by the citizens, private companies on the public market can be). If a public market private company fails to innovate and just produces riskless cashflow forever, it becomes a good candidate for state private ownership.
    - specialist 4y ago
      Municipal bonds.
ornornor 4y ago
Many places have solved this long ago, both for electricity and for telecom: the network is a separate, neutral entity, co-owned by all the players. One cable/fiber, rented by all providers. The network only has one goal: distribution. The providers are the ones competing.
- Teever 4y ago
  Is that a free market solution or has that been mandated by government regulations?
  - ornornor 4y ago
    It’s good for the consumers, so government mandated. Free market yields the US or Canadian telco landscape with bought out regulators, no real competition, price gouging, and poor service.
jacquesm 4y ago
Yes, you can, see Romania. https://foxnomad.com/2012/03/15/why-is-the-internet-in-romania-so-damn-fast/ https://foxnomad.com/2012/03/15/why-is-the-internet-in-roman...

by Teever 4y ago

Utilities like telecoms can't be free market due to the natural monopoly effect. We can't have a hundred different companies burying infrastructure or stringing up lines on poles.

bonestamp2 4y ago

An extra 2 or 3 might be ok.

dmix 4y ago
Seriously, the world will not end because more than two companies are laying fibre. Especially as the country grows in size. This weak apologia for monopolies is what keeps them around. Even when the cost created via gov-backed pseudo-private monopolies are obviously worse than their hypotheticals.

xwolfi 4y ago

You can, but profitability is limited. You can have 5/6 maybe max in a dense country. With 4 in France, they each slowly fibered the whole country reaching an approximate 25% coverage each and compete in wave: one day they are at 20MBps and suddenly one explodes at 100 and the rest run after to restabilize market share. If they dont they all get fined by the regulator looking at european average speeds.

specialist 4y ago
Yes and: Profitability is predetermined. Converting public goods and services into securities. Ideally. So a public utility issues bonds, instead of stocks.
- xwolfi 4y ago
  Not sure what you mean, bonds and stocks are different liabilities and a state utility by definition cannot issue equity or the state would lose ownership. It means they must pay their bond coupons and therefore are very risk adverse and change resistant. A security-emitting entity doesnt need to pay back the debt too much (it should but doesnt have to, via dividend) and therefore can afford to try things to raise returns for both shareholders and management and absorb failure. The worst situation is when a state utility tries to innovate and fails: this leads to privatization which actually transforms it in a public companies (the words are weird: state companies are not directly publicly owned by the citizens, private companies on the public market can be). If a public market private company fails to innovate and just produces riskless cashflow forever, it becomes a good candidate for state private ownership.
  - specialist 4y ago
    Municipal bonds.

ornornor 4y ago

Many places have solved this long ago, both for electricity and for telecom: the network is a separate, neutral entity, co-owned by all the players. One cable/fiber, rented by all providers. The network only has one goal: distribution. The providers are the ones competing.

Teever 4y ago
Is that a free market solution or has that been mandated by government regulations?
- ornornor 4y ago
  It’s good for the consumers, so government mandated. Free market yields the US or Canadian telco landscape with bought out regulators, no real competition, price gouging, and poor service.

jacquesm 4y ago

Yes, you can, see Romania. https://foxnomad.com/2012/03/15/why-is-the-internet-in-romania-so-damn-fast/ https://foxnomad.com/2012/03/15/why-is-the-internet-in-roman...