Comments on: The Fiction of Forced Access “Competition” Revisited http://techliberation.com/2009/09/13/the-fiction-of-forced-access-competition-revisited/ Keeping politicians' hands off the Net & everything else related to technology Sun, 27 May 2012 22:43:00 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: The Progress & Freedom Foundation Blog http://techliberation.com/2009/09/13/the-fiction-of-forced-access-competition-revisited/comment-page-1/#comment-63014 The Progress & Freedom Foundation Blog Wed, 21 Oct 2009 04:06:06 +0000 http://techliberation.com/?p=21365#comment-63014 <p><strong>George Ou & Bret Swanson on Berkman Broadband Report...</strong></p> <p>Last night on the TLF, Bret Swanson raised a number of objections with this FCC-commissioned report about international broadband comparisons, which was conducted by some folks at Harvard University's Berkman Center. Meanwhile, over at the Digital Soc...</p> George Ou & Bret Swanson on Berkman Broadband Report…

Last night on the TLF, Bret Swanson raised a number of objections with this FCC-commissioned report about international broadband comparisons, which was conducted by some folks at Harvard University’s Berkman Center. Meanwhile, over at the Digital Soc…

]]> By: brettglass http://techliberation.com/2009/09/13/the-fiction-of-forced-access-competition-revisited/comment-page-1/#comment-65220 brettglass Sun, 27 Sep 2009 20:57:31 +0000 http://techliberation.com/?p=21365#comment-65220 <p>One of the things which I find refreshing about PFF's philosophy is that, unlike some very extreme "free market" groups who believe that markets are infallible, it does recognize the possibility of market failure. <br><br>In general, the government should promote competition and healthy markets rather than regulating if it intervenes in markets at all. This is certainly the case when it comes to "network neutrality," where in fact the markets are already healthy and no intervention is warranted.<br><br>However, in the case of "special access" lines, the situation is a bit different. In many areas of the country, the incumbent telephone carriers enjoy a monopoly which was created by -- and has been sustained by -- government subsidies to which would-be competitors would not have access (such as the Universal Service Fund). Much of this infrastructure has likewise been built and paid for by monopoly rents, which a new entrant would not enjoy (and without which the construction of competitive infrastructure is not even a break-even proposition, much less an opportunity for a reasonable return on investment). Thus, in this case, the market is "broken" -- in part, due to prior government actions -- in such a way that it can't be fixed without additional intervention.<br><br>Clearly, it's important that such intervention be as minimal as possible, and should be done in such a way as to make itself unnecessary in the end due to the restoration of competition. But in this case, at least, it's important that government remediate the damage (perhaps via temporary price regulation) and ultimately "fix what it broke" so that price regulation becomes unnecessary. Otherwise, there simply will be no viable markets, no competition, and insurmountable barriers to entry for newcomers.</p> One of the things which I find refreshing about PFF's philosophy is that, unlike some very extreme “free market” groups who believe that markets are infallible, it does recognize the possibility of market failure.

In general, the government should promote competition and healthy markets rather than regulating if it intervenes in markets at all. This is certainly the case when it comes to “network neutrality,” where in fact the markets are already healthy and no intervention is warranted.

However, in the case of “special access” lines, the situation is a bit different. In many areas of the country, the incumbent telephone carriers enjoy a monopoly which was created by — and has been sustained by — government subsidies to which would-be competitors would not have access (such as the Universal Service Fund). Much of this infrastructure has likewise been built and paid for by monopoly rents, which a new entrant would not enjoy (and without which the construction of competitive infrastructure is not even a break-even proposition, much less an opportunity for a reasonable return on investment). Thus, in this case, the market is “broken” — in part, due to prior government actions — in such a way that it can't be fixed without additional intervention.

Clearly, it's important that such intervention be as minimal as possible, and should be done in such a way as to make itself unnecessary in the end due to the restoration of competition. But in this case, at least, it's important that government remediate the damage (perhaps via temporary price regulation) and ultimately “fix what it broke” so that price regulation becomes unnecessary. Otherwise, there simply will be no viable markets, no competition, and insurmountable barriers to entry for newcomers.

]]> By: brettglass http://techliberation.com/2009/09/13/the-fiction-of-forced-access-competition-revisited/comment-page-1/#comment-62518 brettglass Sun, 27 Sep 2009 16:57:31 +0000 http://techliberation.com/?p=21365#comment-62518 <p>One of the things which I find refreshing about PFF's philosophy is that it -- unlike some very extreme "free market" groups -- does recognize the possibility of market failure. <br><br>In general, the government should promote competition and healthy markets rather than regulating if it intervenes in markets at all, and this is certainly the case when it comes to "network neutrality." <br><br>However, in the case of "special access" lines, the situation is a bit different. In many areas of the country, the incumbent telephone carriers enjoy a monopoly which was created by government subsidies to which would-be competitors would not have access (such as the Universal Service Fund) and built on monopoly rents (which a new entrant would not enjoy). Thus, in many cases, the market is "broken" -- in part, due to prior government actions -- in such a way that it can't be fixed without additional intervention.<br><br>Clearly, it's important that such intervention be as minimal as possible, and should be done in such a way as to make itself unnecessary in the end due to the restoration of competition. But in this case, at least, it's important that government remediate the damage (perhaps via temporary price regulation) and ultimately "fix what it broke" so that price regulation becomes unnecessary. Otherwise, there simply will be no viable markets, no competition, and insurmountable barriers to entry for newcomers.</p> One of the things which I find refreshing about PFF's philosophy is that it — unlike some very extreme “free market” groups — does recognize the possibility of market failure.

In general, the government should promote competition and healthy markets rather than regulating if it intervenes in markets at all, and this is certainly the case when it comes to “network neutrality.”

However, in the case of “special access” lines, the situation is a bit different. In many areas of the country, the incumbent telephone carriers enjoy a monopoly which was created by government subsidies to which would-be competitors would not have access (such as the Universal Service Fund) and built on monopoly rents (which a new entrant would not enjoy). Thus, in many cases, the market is “broken” — in part, due to prior government actions — in such a way that it can't be fixed without additional intervention.

Clearly, it's important that such intervention be as minimal as possible, and should be done in such a way as to make itself unnecessary in the end due to the restoration of competition. But in this case, at least, it's important that government remediate the damage (perhaps via temporary price regulation) and ultimately “fix what it broke” so that price regulation becomes unnecessary. Otherwise, there simply will be no viable markets, no competition, and insurmountable barriers to entry for newcomers.

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