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ISPs and cell service are exactly what happens when government gets involved. Power plants are actually less regulated. Cell service is compeltely broken becau
by zanny 14y ago
ISPs and cell service are exactly what happens when government gets involved. Power plants are actually less regulated.
Cell service is compeltely broken because the government "sold" radio frequency spectrum. They sold all of it. Now there is none left to sell or distribute. And now a few concentrated companies own the rights (another government construct) to broadcast on their frequencies. So there is a rigged, no competition market, because you can't erect cell towers and broadcast on any frequency anymore (at least those viable for cell service) because someone owns that frequency band.
ISPs, again, are poor government intervention - almost all of the ground wires were laid under government subsidy upwards of a hundred years ago for some phone channels, so all the current private owners of coax / phone lines almost exclusively got them from government that already laid them, and rarely ever lays them themselves (and when they do, they do slight extensions to already established backbone, they aren't laying it themselves).
In addition, these private providers will contract with local governments to provide exclusive service, and will bribe the town council to block competition from laying their own lines (or heavens forbid, the township itself own the fucking wires running under their streets). As a result, you can't lay your own cable / fiber / phone lines (unless you are Google and have billions of political pressure) and even if you could, you are at an insurrmountable competitive disadvantage because not only does your competition already have all their wire laid decades ago, they can readily drop their prices to run you out of the market because they have barely any overhead in providing your service. They are making hand over fist profit off of consistent customers that are paying year on end. And then, there is inertia, and market manipulation by the established players, to make "average joes" not consider switching providers.
On the other end of the spectrum, it is federally regulated that power companies need to be contractable, in that you can select the company you get "power" from, even though the actual power lines are carrying juice from a thousand plants at any one time, and a lot of peoples homes are feeding back into the system. It is also regulation that enables average joes to set up their own solar panels / wind turbine / generator and get reimbursed any power they feed back into the system - if power companies could do whatever they wanted, they would prevent their customers from setting up their own power backup since it hurts their profits.
In the end, it is not very complex I think - even though the examples can be - if you stifle the ability for new players to enter a market, easily, and compete with the established ones (be it through insurmountable subsidized initial investment to enter the market, actual law book regulation preventing it, or rigged business code favoring the monopoly) you direly hurt the economy by creating artificial monopolies.
Even if the monopolies do "reasonably" well (NASA, for example, basically prevented private space investment because for 30 years it was hugely funded by taxpayers to own the sector, AT&T owned phone service for 60 years by government mandate, etc) markets with only one player (don't even look further than personal computing or the Linux world - there was barely any innovation in GCC until Clang came along to provide competition, or how Firefox had to get a lot faster when Chrome became a real competitor). Competition drives innovation, and in any situation where you facilitate a one man market, you will starve innovation and improvement just by only having one force in the market, even if they have good intentions.
Competition is essential to progress. It is the fuel that produces a huge amount of improvement in every field and business. So if a government is going to craft any law, it should be to make new competition easier to found and enter a market with, not harder. The electric grid regulation makes it easier to enter the market (even if the individual power sources are heavily regulated / zoned / mandated, and the status of a player against a power company only exists for consumers to power co, not business to power co, etc - there is a lot of regulatory cruft behind the respectable outer cover) and as a result promotes competition and better prices for the consumer (the ability to "shop" your power company in a state is a huge reason US power costs are so much lower than elsewhere in the world).
It is why almost all the innovation right now is in web / computers. It is barely regulated, extremely easy to enter the market, and as a result a disproportionate amount of ideas go into it (even when other fields cry for innovation, like medicine, agriculture, telecom, etc) because the market is free and as a result it is healthy.
- bokonist 14y ago"Cell service is compeltely broken because the government "sold" radio frequency spectrum. They sold all of it." Usually the government selling something off is not cited as an example of government intervention. Most lazzei-faire types believe that is exactly what government should do - sell off the property to put it in the hands of the free market. The actually problems are three-fold. 1) The government still owns large portions of spectrum that are underutilized 2) the government restricts changing the use of spectrum, such as changing UHF TV into 4G and 3) the government does not charge any sort of property tax based on the value of the spectrum, so there is no incentive for the spectrum to end up with the highest value use. "ISPs, again, are poor government intervention - almost all of the ground wires were laid under government subsidy upwards of a hundred years ago for some phone channels, " Most people in my state get their internet via cable wires laid in the past few decades. "In addition, these private providers will contract with local governments to provide exclusive service, and will bribe the town council to block competition from laying their own lines (or heavens forbid, the township itself own the fucking wires running under their streets)." Local governments are much closer to small market players than they are to the leviathan state. There are thousands of towns and cities, but usually only a couple cable companies in any area. The exclusivity contracts are usually given out of position of weak bargaining power. "and even if you could, you are at an insurrmountable competitive disadvantage because not only does your competition already have all their wire laid decades ago, they can readily drop their prices to run you out of the market because they have barely any overhead in providing your service." And here is the problem that has nothing to do with government - broadband wired internet is a natural monopoly. There are extreme capital expenses and the company that builds the first network has a huge advantage, it is usually not profitable for a second business to enter the market. So yeah, competition is good. But initiating competition in the cable market might require government intervention. It might require the government to subsidize a second network. It might require the government to block mergers between the cable companies and content providers. And even in the best case you are probably not going to have more than two or three broadband options in one town. So the government would probably still want to regulate the internet providers as common carriers ( http://en.wikipedia.org/wiki/Common_carrier http://en.wikipedia.org/wiki/Common_carrier ) and ensure network neutrality. "AT&T owned phone service for 60 years by government mandate" Keep in mind that AT&T pretty much built its monopoly on its own. The government had the choice between breaking it up, and converting it to a regulated monopoly, and chose the latter. This may have been the wrong choice, but the country was probably better off for having at least some government intervention, and not allowing the monopoly to be completely unregulated and dedicated solely towards shareholder profits.