4 ms·

Why should the government be doing it?

derefr 11y ago
There's no reason the government actually needs to build the infrastructure itself—but since infrastructure is a natural monopoly (only room for one set of roads, one EM spectrum, etc) the government needs to "regulate it into existence", setting laws to incentivize cooperative building of neutrally-owned infrastructure by interested players, rather than the natural monopoly leading to a real monopoly/oligopoly.
- jMyles 11y ago
  > rather than the natural monopoly leading to a real monopoly/oligopoly. Of course you realize that there's debate about whether government makes this scenario more or less likely.
- nulltype 11y ago
  That sounds a lot more appealing to me than the government actually building the thing. With the EM spectrum for instance, the unlicensed 2.4GHz and 5GHz bands have been pretty useful. Google actually tried to get the 700 MHz spectrum (in the 2008 auction) licensed in a way that would probably benefit consumers quite a bit, though I'm not sure how well that worked. It's odd that Google had to do that when it's ostensibly the government's job to ensure good use of this limited natural resource, but I think the idea was good.
  - MagicWishMonkey 11y ago
    Well that is how our existing broadband infrastructure was brought into existence. The big cable companies were given billions in subsidies for expanding their high speed networks. It worked well except for the fact that they were allowed to form monopolies/oligopolies after expanding into new markets.
    - nulltype 11y ago
      Yeah, I find it weird that nobody else can use those cable networks, unlike the phone lines, or build their own. Perhaps those subsidies should have included more strings. Or maybe it should be easy to run cables.
- timtas 11y ago
  The notion of natural monopoly, while superficially plausible, is an ahistorical ex post rationale for government intervention.[1] Any day now some guy or gal will visit my home to hook up my Google Fiber. How can that be if if Time Warner Cable has a natural monopoly? Oops, I should say that TWC, AT&T, DIRECTV and Dish have an oligopoly. Before you protest that I lump guys who launch satellites together with guys who hang wire on poles, remember in a dynamic world supposed natural monopolies are not safe from substitutes. [1]https://mises.org/library/myth-natural-monopoly https://mises.org/library/myth-natural-monopoly
  - untog 11y ago
    But you're comparing apples and oranges. Are you seriously suggesting that we could duplicate or triplicate all the roads in the country to allow competition between private road companies? (and your example is a bad one - here in my area of NYC, Time Warner absolutely does have a monopoly, I have no other providers to choose from. So it makes sens that someone regulates them.)
    - barney54 11y ago
      But the reason that Time Warner has a monopoly because the city granted them a monopoly--not because of technology. Plus, politics and regulation make it difficult for new entry into their market.
      - untog 11y ago
        But the reason that Time Warner has a monopoly because the city granted them a monopoly That isn't the case. Verizon have rolled out FIOS to areas in the city, but have decided to stop doing so.
    - timtas 11y ago
      I don't follow -- which are the apples and oranges? Comparing wires and roads does seem like apples and oranges. You have to ask, why does TWC have a monopoly in NYC? Did the market create it? Does the market protect it? Why do you think Google Fiber is skipping big markets like NYC in favor of KC, Austin (where I live) and Provo? I hear it said that it's too much work to lay infrastructure in Manhattan. Sure it's a lot of work, but as I watch them boring through the hard limestone up and down my street for the last 9 months -- it takes a whole day for a machine the size of truck to bore a hole from one house to the next -- to reach a maybe 1000 subscribers, I cannot imagine it's less work per subscriber here than a big dense city. No, they are avoiding the big markets because of webs of regulation and bureaucracy which protect incumbents like TWC.
- jotm 11y ago
  That's my opinion, as well. But corporations have realized that they only need to go one step up and regulate the regulators, so they still get to keep a monopoly (in a more dangerous way)...
egru 11y ago
So that they are public infrastructure that everyone has the ability to access.
GFK_of_xmaspast 11y ago
Falls under 'general welfare', Article I Section 8.
deleted 11y ago
[deleted]
bluthru 11y ago
Because we the people should be owners of our own infrastructure.
rokhayakebe 11y ago
I am not sure why you are getting down-voted but this is very legitimate question. The role of government is to provide for the infrastructure a society needs to prosper. Roads are a primary part of that infrastructure. If I could see how fast and conveniently goods and people are moving within a country, state, I could tell you how developed it is. I believe this has always been true. The old nations which had better ways of moving goods also had great power to some extent. Other parts of this basic infrastructure the government should provide include: a legal system, protection, education and healthcare. Perhaps beyond this the government can keep clear and let private markets handle.
sytelus 11y ago
There are some infrastructure Governments must do because it provides equal opportunity setting the level playing field for all. For instance, Govt must fund schools otherwise all the great schools would eventually set their prices according to supply/demand so that bottom population can't afford them. This translates to situation where you can realize your potential only if you were lucky enough to be born to right parents. Consider another scenario: A country has cities A, B and C. Assume that the govt doesn't do infrastructure like building roads. So a private company comes in and builds road between A and B because there is a net profit for them. One problem is obviously, now everyone must pay to use this road. If you are poor and can't pay then you can't use that road even if you need it go to hospital or send your kids to school or start your new business. Again, the result is that lack of infrastructure puts poor people at the severe disadvantage from making progress. Further, private companies may decide never to build any road between B and C because their analysis shows C only has 1000 people and they can never recover their cost. Now, you can argue that 1000 people needs to suffer for making a bad choice about where to live and should not expect other people to pay up. However if you go in that line of thought, I bet most of the cities would never could have been connected. The crux of the issue is we as humans are only good at finding "local optimums" and it's impossible to see for us what could be "global optimum". What that means in nutshell is that we need to allow possibilities even though it may look venture of loss and foolishness because sometime those possibilities are what leads to huge outcomes.
sixothree 11y ago
Pretty sure all road work in my state is done by private companies.

There's no reason the government actually needs to build the infrastructure itself—but since infrastructure is a natural monopoly (only room for one set of roads, one EM spectrum, etc) the government needs to "regulate it into existence", setting laws to incentivize cooperative building of neutrally-owned infrastructure by interested players, rather than the natural monopoly leading to a real monopoly/oligopoly.

jMyles 11y ago
> rather than the natural monopoly leading to a real monopoly/oligopoly. Of course you realize that there's debate about whether government makes this scenario more or less likely.
nulltype 11y ago
That sounds a lot more appealing to me than the government actually building the thing. With the EM spectrum for instance, the unlicensed 2.4GHz and 5GHz bands have been pretty useful. Google actually tried to get the 700 MHz spectrum (in the 2008 auction) licensed in a way that would probably benefit consumers quite a bit, though I'm not sure how well that worked. It's odd that Google had to do that when it's ostensibly the government's job to ensure good use of this limited natural resource, but I think the idea was good.
- MagicWishMonkey 11y ago
  Well that is how our existing broadband infrastructure was brought into existence. The big cable companies were given billions in subsidies for expanding their high speed networks. It worked well except for the fact that they were allowed to form monopolies/oligopolies after expanding into new markets.
  - nulltype 11y ago
    Yeah, I find it weird that nobody else can use those cable networks, unlike the phone lines, or build their own. Perhaps those subsidies should have included more strings. Or maybe it should be easy to run cables.
timtas 11y ago
The notion of natural monopoly, while superficially plausible, is an ahistorical ex post rationale for government intervention.[1] Any day now some guy or gal will visit my home to hook up my Google Fiber. How can that be if if Time Warner Cable has a natural monopoly? Oops, I should say that TWC, AT&T, DIRECTV and Dish have an oligopoly. Before you protest that I lump guys who launch satellites together with guys who hang wire on poles, remember in a dynamic world supposed natural monopolies are not safe from substitutes. [1]https://mises.org/library/myth-natural-monopoly https://mises.org/library/myth-natural-monopoly
- untog 11y ago
  But you're comparing apples and oranges. Are you seriously suggesting that we could duplicate or triplicate all the roads in the country to allow competition between private road companies? (and your example is a bad one - here in my area of NYC, Time Warner absolutely does have a monopoly, I have no other providers to choose from. So it makes sens that someone regulates them.)
  - barney54 11y ago
    But the reason that Time Warner has a monopoly because the city granted them a monopoly--not because of technology. Plus, politics and regulation make it difficult for new entry into their market.
    - untog 11y ago
      But the reason that Time Warner has a monopoly because the city granted them a monopoly That isn't the case. Verizon have rolled out FIOS to areas in the city, but have decided to stop doing so.
  - timtas 11y ago
    I don't follow -- which are the apples and oranges? Comparing wires and roads does seem like apples and oranges. You have to ask, why does TWC have a monopoly in NYC? Did the market create it? Does the market protect it? Why do you think Google Fiber is skipping big markets like NYC in favor of KC, Austin (where I live) and Provo? I hear it said that it's too much work to lay infrastructure in Manhattan. Sure it's a lot of work, but as I watch them boring through the hard limestone up and down my street for the last 9 months -- it takes a whole day for a machine the size of truck to bore a hole from one house to the next -- to reach a maybe 1000 subscribers, I cannot imagine it's less work per subscriber here than a big dense city. No, they are avoiding the big markets because of webs of regulation and bureaucracy which protect incumbents like TWC.
jotm 11y ago
That's my opinion, as well. But corporations have realized that they only need to go one step up and regulate the regulators, so they still get to keep a monopoly (in a more dangerous way)...

egru 11y ago

So that they are public infrastructure that everyone has the ability to access.

GFK_of_xmaspast 11y ago

Falls under 'general welfare', Article I Section 8.

deleted 11y ago

[deleted]

bluthru 11y ago

Because we the people should be owners of our own infrastructure.

rokhayakebe 11y ago

I am not sure why you are getting down-voted but this is very legitimate question. The role of government is to provide for the infrastructure a society needs to prosper. Roads are a primary part of that infrastructure. If I could see how fast and conveniently goods and people are moving within a country, state, I could tell you how developed it is. I believe this has always been true. The old nations which had better ways of moving goods also had great power to some extent. Other parts of this basic infrastructure the government should provide include: a legal system, protection, education and healthcare. Perhaps beyond this the government can keep clear and let private markets handle.

sytelus 11y ago

There are some infrastructure Governments must do because it provides equal opportunity setting the level playing field for all. For instance, Govt must fund schools otherwise all the great schools would eventually set their prices according to supply/demand so that bottom population can't afford them. This translates to situation where you can realize your potential only if you were lucky enough to be born to right parents. Consider another scenario: A country has cities A, B and C. Assume that the govt doesn't do infrastructure like building roads. So a private company comes in and builds road between A and B because there is a net profit for them. One problem is obviously, now everyone must pay to use this road. If you are poor and can't pay then you can't use that road even if you need it go to hospital or send your kids to school or start your new business. Again, the result is that lack of infrastructure puts poor people at the severe disadvantage from making progress. Further, private companies may decide never to build any road between B and C because their analysis shows C only has 1000 people and they can never recover their cost. Now, you can argue that 1000 people needs to suffer for making a bad choice about where to live and should not expect other people to pay up. However if you go in that line of thought, I bet most of the cities would never could have been connected. The crux of the issue is we as humans are only good at finding "local optimums" and it's impossible to see for us what could be "global optimum". What that means in nutshell is that we need to allow possibilities even though it may look venture of loss and foolishness because sometime those possibilities are what leads to huge outcomes.

sixothree 11y ago

Pretty sure all road work in my state is done by private companies.