nanog mailing list archives
Re: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])
From: Matthew Crocker <matthew () crocker com>
Date: Tue, 15 Nov 2005 09:51:59 -0500
Technically, lots of other providers CAN enter the market - it's just very expensive to do so. If there are customers who are not receiving service from one of the incumbent providers, a third party is certainly welcome to {dig a trench | build wireless towers | buy lots of well-trained pigeons for RFC 1419 access} and offer the services to the ignored customers.
Technically anything is possible, I could walk on the moon if I had enough $$.
The problem is that the capital expenditures required in doing so are very, very high, and most companies don't see the profit in doing so.
That is the exact problem with a [mon|du]opoly. The incumbents drive the price so low (because they own the network) that it drives out an potential competition.
We don't need 8 fiber networks overlaid to every home in the US to provide competition. We need a single high quality wholesale only fiber network which is open to use by all carriers. I don't want 200' telephone poles down my street with 10 rows of fiber. It doesn't make sense.
Actually, here's where I'd disagree: market forces are exactly the thing which is keeping other providers OUT. It's too expensive for them to buy their way into these areas, and during all of the time when access was mandated to be (relatively) cheap by law, very few third parties actually built their own infrastructure all the way to homes. There are some competitive cable plants in some cities (I remember Starpower/RCN doing this in DC), but I'm not aware of any residential phone providers who built all the way out to houses exclusively on their own infrastructure.
Again, because of the monopoly held by the incumbents keeping the price low enough that you can't afford to build your own infrastructure.
We don't need competition in the infrastructure business, we need competition in the bandwidth business. That can only happen if the infrastructure is regulated, open and wholesale only. The RBOCs should be split up into a wholesale *only* division (owns the poles, wires, buildings,switches) and a services *retail* division (owns the dialtone, bandwidth, customers ). The wholesale division should sell service to the retail division at a regulated TELRIC based price which will allow the wholesale division to make enough money to build/ maintain the best infrastructure in the world. Any competitive service provider can buy the same services at the same price as RBOC Retail. Regulated such that wholesale profit can't subsidize retail services. In high density areas there may be alternate infrastructure providers that can sell to CSPs and in rural america there will be one infrastructure provider and many CSPs
This IS the market at work. If you want it to be different, what you want is more, not less regulation. That may or may not be a good thing, but let's just be very clear about it.
More regulation of the physical infrastructure (the expensive piece) and less regulation of the bits to foster competitive solutions and bring along new innovations. The future innovations are not going to revolve around new types of fiber. They will revolve around what can be done with high bandwidth to everyone.
-- Matthew S. Crocker Vice President Crocker Communications, Inc. Internet Division PO BOX 710 Greenfield, MA 01302-0710 http://www.crocker.com
Current thread:
- Re: [Latest draft of Internet regulation bill], (continued)
- Re: [Latest draft of Internet regulation bill] Sean Donelan (Nov 14)
- Re: [Latest draft of Internet regulation bill] Steven M. Bellovin (Nov 14)
- Re: [Latest draft of Internet regulation bill] Sean Donelan (Nov 14)
- Re: [Latest draft of Internet regulation bill] Blaine Christian (Nov 14)
- RE: [Latest draft of Internet regulation bill] Michael Hallgren (Nov 14)
- Re: [Latest draft of Internet regulation bill] Jared Mauch (Nov 15)
- Re: [Latest draft of Internet regulation bill] Steven J. Sobol (Nov 17)
- Re: [Latest draft of Internet regulation bill] Jared Mauch (Nov 17)
- Re: [Latest draft of Internet regulation bill] Owen DeLong (Nov 15)
- What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill]) David Barak (Nov 15)
- Re: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill]) Matthew Crocker (Nov 15)
- Re: What do we mean when we say "competition?" David Barak (Nov 15)
- Re: What do we mean when we say "competition?" Matthew Crocker (Nov 15)
- RE: What do we mean when we say "competition?" David Schwartz (Nov 15)
- Re: What do we mean when we say "competition?" Owen DeLong (Nov 15)
- Re: What do we mean when we say "competition?" Sean Donelan (Nov 15)
- Re: What do we mean when we say "competition?" Owen DeLong (Nov 15)
- Re: What do we mean when we say "competition?" Sean Donelan (Nov 15)
- Re: What do we mean when we say "competition?" David Barak (Nov 15)
- Re: What do we mean when we say "competition?" Owen DeLong (Nov 15)
- Re: What do we mean when we say "competition?" Sean Donelan (Nov 16)