Truth about broadband?

[Julien]

How bad is broadband competition in the US?

Why are speeds and prices not as attractive as in other countries?

What are the actual impediments for entrepreneurs?

How significant are those compared to natural barriers (large investment, uncertainty, natural monopoly theory)?

 

As far as I'm aware, the closest writing on the topic is Prof DiLorenzo on natural monopoly (gas, electricity, etc) which takes a historical look. There is also a bit of writing (Cato, Henderson) on phone and cable deregulation.

Do you know any good writing on the topic of broadband specifically?

 

Would this make a good FDR show topic?

 

Cheers,

Julien

[dsayers]

I think the answer is the same as with most things: the State. The force/threat of the State artificially culls competition, securing de facto monopolies, reducing competition, leading to inefficient pricing and service. Free market is self-correcting due to natural forces like competition and consequence. Using the State as a shield protects companies from both.

[Worlok]

I think the answer is the same as with most things: the State. The force/threat of the State artificially culls competition, securing de facto monopolies, reducing competition, leading to inefficient pricing and service. Free market is self-correcting due to natural forces like competition and consequence. Using the State as a shield protects companies from both.

 

This exactly. 

 

To be a little more precise, the FCC controls broadband, or any internet services. I used to work for ATT and I would have received a 30% discount on their internet service. The FCC would not allow ATT to offer that service in my area because it would be unfair to Comcast to have competition. Thus my only internet options are DSL, Comcast, or satellite. These are completely different types of services that don't have to compete. You get satellite if you bundle with satellite tv service. You get DSL if you don't get super expensive tv service and Comcast isn't available to your house/apartment. Basically everybody gets Comcast. There isn't any real competition.

 

Due to the economic state of Utah, Google has fiber in three or four major cities and it is priced really well for the best service available. This is the only actual competition in my state.

 

Phone services were heavily regulated because of Bell/ATT owning practically everything and wanting to push competition out of the market. After cellular services starting gaining traction, land lines were mostly deregulated and enough damage was done that one or two companies couldn't get the FCC to shut down the competition.

 

Basically, if there is too much competition, the FCC regulates and prices and services turn to crap. If a company is too powerful, the FCC regulates and breaks it up, then competition occurs and they regulate and companies become to powerful.

 

Just read up on ATT/Bell.