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I've never understood why in many western industrialized countries telecommunications has not been regulated the same as sewage, roads, electricity, etc. It is

by zmanji 15y ago

I've never understood why in many western industrialized countries telecommunications has not been regulated the same as sewage, roads, electricity, etc. It is a vital piece of infrastructure in the 21st century and it should be the responsibility of the government to manage such infrastructure.

snowwindwaves 15y ago
we used to have that, and while the service of providing roads, electricity, or sewerage hasn't changed much in the last 100 years, telecommunications certainly has. while networks might lend themselves to natural monopolies, government sponsored telecommunications monopolies couldn't keep up with the pace of innovation these days and as a result consumers would be left paying high rates for antiquated service.
- zmanji 15y ago
  Right now in Canada I am paying high rates for antiquated service. There is still long distance, I have to pay extra for voicemail + caller id, etc. I agree that government sponsored monopolies probably could not keep up with the pace of innovation. However in industries where natural monopolies occur, I think they are the better solution then private enterprise. In Canada, it used to be that receiving text messages was free. However, one of the three carriers decided to charge for incoming texts. Sure enough, in less than a year, the other two carriers followed and also charged for incoming texts. I have a strong feeling to say that sort of behavior would not occur if there was a government sponsored monopoly. The obvious solution is better regulation, but I don't think anyone has found a solution to regulatory capture yet so I'm not banking on anything there.
  - phillmv 15y ago
    Hang on. There are many aspects which the government should regulate (common carrier status for internet, anyone?) but I think that in this aspect our biggest problem is that the barrier for entry in the Canadian market is too high, and so it's exceedingly difficult to disrupt. Because there's such a lack of competition the big telcos get to basically collude with each other.
- teamonkey 15y ago
  This is going to sound like trolling, but compared to the European mobile telecoms services, you in the US are paying high rates for an antiquated service (specifically, non-GSM use is still common, everyday data speeds are slower, dropouts are higher, call quality is lower). Judicious government investment into telecoms infrastructure in certain European countries has led to fast, cheap and stable communications. Government investment doesn't always equate to bad; if it's bad it means that particular government body did a bad job in that particular case, that's all.
  - snowwindwaves 15y ago
    Can you provide some examples of these European state owned monopoly telecommunications companies or does government investment signify something else?
    - throwaway64 15y ago
      I'm not sure about European tel-cos, but i can tell you of a north American telco that is a virtual government monopoly (no other private company has comparable rates and service), Sasktel, they have an interesting history. https://en.wikipedia.org/wiki/Sasktel https://en.wikipedia.org/wiki/Sasktel They were the first, or one of the first companies in north america to offer: Video-On-Demand, Fiber to the home, IPTV, HDTV over IPTV, HSPA, ADSL, etc. This is while servicing a province with roughly half a million people and is larger than every American state minus Alaska and Texas. While at the same time serving hundreds of small communities with full speed access. This is at the same time as offering plans and service that is much better than what you can get in the surrounding provinces that have cities that have more people than the whole province. In some ways, privately owned companies that only have to compete with 2 or 3 other entities is far worse than a government monopoly.
      - snowwindwaves 15y ago
        what has made the difference there then? good management? down to earth hard working employees? reasonable cost of living?
jbarham 15y ago
You're evidently too young to remember when AT&T had a government granted monopoly. Suffice it to say that it was not an era that was known for innovation and value.
FD3SA 15y ago
The issue is precisely that regulators are in bed with monopolizers. More regulation will only strengthen their stranglehold on this market. The proper response in this scenario is complete deregulation, allowing international players to drive competition in the currently stagnant market.
nl 15y ago
I've never understood why in many western industrialized countries telecommunications has not been regulated the same as sewage, roads, electricity, etc Because the technology required for telecommunications changes quicker than that required for sewage, roads, electricity etc. Highly regulated markets are slower to react than less regulated markets, and government owned monopolies are usually the slowest of the lot. In general the model that seems to have generated the best outcome for consumers is government-mandated competition. This takes many forms (eg, local-loop unbundling in the UK and Europe, partial forced access regulation in Australia), but enables companies to compete on services, innovation and price whilst keeping the government involved to enforce consumer interests.

by zmanji 15y ago

snowwindwaves 15y ago

we used to have that, and while the service of providing roads, electricity, or sewerage hasn't changed much in the last 100 years, telecommunications certainly has. while networks might lend themselves to natural monopolies, government sponsored telecommunications monopolies couldn't keep up with the pace of innovation these days and as a result consumers would be left paying high rates for antiquated service.

zmanji 15y ago
Right now in Canada I am paying high rates for antiquated service. There is still long distance, I have to pay extra for voicemail + caller id, etc. I agree that government sponsored monopolies probably could not keep up with the pace of innovation. However in industries where natural monopolies occur, I think they are the better solution then private enterprise. In Canada, it used to be that receiving text messages was free. However, one of the three carriers decided to charge for incoming texts. Sure enough, in less than a year, the other two carriers followed and also charged for incoming texts. I have a strong feeling to say that sort of behavior would not occur if there was a government sponsored monopoly. The obvious solution is better regulation, but I don't think anyone has found a solution to regulatory capture yet so I'm not banking on anything there.
- phillmv 15y ago
  Hang on. There are many aspects which the government should regulate (common carrier status for internet, anyone?) but I think that in this aspect our biggest problem is that the barrier for entry in the Canadian market is too high, and so it's exceedingly difficult to disrupt. Because there's such a lack of competition the big telcos get to basically collude with each other.
teamonkey 15y ago
This is going to sound like trolling, but compared to the European mobile telecoms services, you in the US are paying high rates for an antiquated service (specifically, non-GSM use is still common, everyday data speeds are slower, dropouts are higher, call quality is lower). Judicious government investment into telecoms infrastructure in certain European countries has led to fast, cheap and stable communications. Government investment doesn't always equate to bad; if it's bad it means that particular government body did a bad job in that particular case, that's all.
- snowwindwaves 15y ago
  Can you provide some examples of these European state owned monopoly telecommunications companies or does government investment signify something else?
  - throwaway64 15y ago
    I'm not sure about European tel-cos, but i can tell you of a north American telco that is a virtual government monopoly (no other private company has comparable rates and service), Sasktel, they have an interesting history. https://en.wikipedia.org/wiki/Sasktel https://en.wikipedia.org/wiki/Sasktel They were the first, or one of the first companies in north america to offer: Video-On-Demand, Fiber to the home, IPTV, HDTV over IPTV, HSPA, ADSL, etc. This is while servicing a province with roughly half a million people and is larger than every American state minus Alaska and Texas. While at the same time serving hundreds of small communities with full speed access. This is at the same time as offering plans and service that is much better than what you can get in the surrounding provinces that have cities that have more people than the whole province. In some ways, privately owned companies that only have to compete with 2 or 3 other entities is far worse than a government monopoly.
    - snowwindwaves 15y ago
      what has made the difference there then? good management? down to earth hard working employees? reasonable cost of living?

jbarham 15y ago

You're evidently too young to remember when AT&T had a government granted monopoly. Suffice it to say that it was not an era that was known for innovation and value.

FD3SA 15y ago

The issue is precisely that regulators are in bed with monopolizers. More regulation will only strengthen their stranglehold on this market. The proper response in this scenario is complete deregulation, allowing international players to drive competition in the currently stagnant market.

nl 15y ago

I've never understood why in many western industrialized countries telecommunications has not been regulated the same as sewage, roads, electricity, etc Because the technology required for telecommunications changes quicker than that required for sewage, roads, electricity etc. Highly regulated markets are slower to react than less regulated markets, and government owned monopolies are usually the slowest of the lot. In general the model that seems to have generated the best outcome for consumers is government-mandated competition. This takes many forms (eg, local-loop unbundling in the UK and Europe, partial forced access regulation in Australia), but enables companies to compete on services, innovation and price whilst keeping the government involved to enforce consumer interests.