RE: COX Communications Sucks (Was: moving e-mail)

      So each
    house has one connection (multiple lines are part of the same
one
    connection) to the telephone network.
      In August 2005 the FCC ruled that
    DSL is an "information service" instead of a "telecommunications
    service" with the effect that the incumbent telephone companies
can
    charge whatever they want to competing DSL resellers for access
to that
    connection[1].
    So, even though my home DSL is provided by Covad, it really is
owned by 
    QWest.  And even though my ISP is Earthlink and I could chose
many other
    ISPs, I cannot find pricing of the ISP combined with the DSL
connection
    that meets or beats QWest's ISP and DSL pricing.  QWest controls
the 
    price that any competitor must charge by controlling the price
the
    competitor must pay to get through that connection.
    So we are left with, really, only two possible inexpensive
providers in
    this area: QWest or Cable.  And cable is a municipal government
granted 
    monopoly.  That is not a free market at all.
    Now, for a change of pace, a completely hypothetical question:
    According to Yahoo Finance the market capitalization of QWest is
$18.99
    billion[2].  And if I may be so off-the-wall to make such an 
    apples-to-oranges comparison, Bill Gate's net worth is reported
to be
    $27.93 billion[3].
    Using this completely bogus comparison of financial capability,
I ask
    these questions:
    If Bill wanted to spend a significant portion of his riches to
build a 
    second telephone network in the Phoenix area, laying his own
fiber and
    copper connections to every house along side the current wiring,
would
    he be able to do so?
    He appears to have enough money since he has more value than
QWest and 
    would only be serving the Phoenix area and not in 14 US states
like
    QWest does[4].  If he would not be able to do so then the
barrier to
    entry is the result of something other than the operation of a
free
    market.  In a completely free market the only cost to entry is
cost of 
    providing the good or service.
    I don't think anyone would be able to successfully install a
completely
    separate competing connection infrastructure at any price
because
    non-market forces in the form of government regulation would
prevent it. 
    I agree that the free market is the best way to find the most
efficient
    method of producing goods and services, by far.  However, the
current
    telecommunications market is NOT a free market and does not
operate by 
    free market rules.  When telecommunications executives or
politicians
    speak of maintaining the status quo or increasing incumbent
control as
    "letting the free market solve the problem" they are being
disingenuous, 
    in my opinion.
    Alan
    [1]http://www.techdirt.com/articles/20050805/1029253.shtml
    [2]http://finance.yahoo.com/q?s=Q
    [3]http://evan.snew.com/ecgi/gates.cgi
    Bryan O'Neal wrote:
    > Yes, basic market rules say if there is money to be made
people move in
    > to make money.  No one will enter a market if there is no
demand for the
    > product or service, or the demand is not high enough to make a
profit. 
    > Arbitrage rules say that if the product or service can be
given with a
    > lower cost (thus higher profit) by a competitor or a
competitor has
    > greater tolerance to a thinner margin then the competitor will
enter the 
    > market.  If there is competition in the market place and
excess demand
    > is not met, then the supply goes up and the price goes down.
If the
    > price goes down a new supply/demand intersection is reached
with a 
    > greater demand and supply.  The longer this goes on with
excess demand
    > (thus a larger initial price and no steep price point steps)
then the
    > lower the final price will be. In other words the first person
in the 
    > filed has a high barrier to entry, and unless there is a
payback they
    > will not enter.  The larger the payback and the greater the
demand the
    > more people who are willing to cross that barrier for a piece
of the 
    > action. As more people enter the field two things happen, the
barriers
    > become lower and the competition (supply) becomes greater,
thus if you
    > follow the demand curve the price drops.  There are endless
examples, 
    > but since we are on the subject, let us look at cell phones.
The
    > original cell phones weighed a few pounds and were the size of
bricks,
    > only a few carriers (AT&T) had them and fewer people
(Motorola) created 
    > them.  If only a few very few people were interested in them
we would
    > not be as far as we are in cell phone tech.  However many
people wanted
    > them and were willing to pay outrageous prices for them,
infrastructure 
    > was built to handle them and to build them.  People poured
money into
    > R&D to make them cheaper so their profit would be greater
(Since
    > competition was driving down the price) this allowed them to
drop the 
    > price more and offer better product thus capturing more market
at the
    > same or better margins and creating greater profit, and others
followed,
    > thus the game cycles it's self through until you arrive at
were we are 
    > now.  The reason people in Japan have more features is because
they
    > demand it and are willing to pay for it.  We (as an economic
collective)
    > are not.
    >
    >
    >
    > As far as regulation, there are two reasons for it.  To
provide 
    > protectionist incentives to the first entries into market
(thus ensuring
    > they can pay back their initial investment) and two protect
the public
    > at large (need I remind people of thalidomide).  Then you have
    > incentives, and no one can dispute the effects of projects
like the
    > Tennessee Valley Rive Authority.  However the political
question becomes
    > when you can eliminate the protectionist aspects of an
industry.  For 
    > the most part the Telecom industry has had their protectionist
    > incentives removed (save the most basic nature of the regional
Telco
    > structure) and what has not been removed is being phased out.
However, 
    > we are now in the midst of the imposition of additional
protectionist
    > schemes (Ted Stevens fight agents net neutrality).  And yes,
your
    > argument was better then the typical winning I hear, but I
hear so much 
    > of it I sometimes lump it all together when I should not.  But
I stand
    > firm that all things cost, there is no such thing a free
lunch, there
    > are unlimited desires and limited resources to fill those
desires, and 
    > that a free market driven economy is the best way to
distribute those
    > resources.
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