Sunday, July 20, 2014

The FCC wants to let cities build their own broadband. House Republicans disagree. - Vox

The FCC wants to let cities build their own broadband. House Republicans disagree. - Vox

House Republicans would be well advised to consult with or hire new, better economic advisors. They demonstrate a fundamental misapprehension of telecommunications infrastructure in viewing it as a competitive market when in fact it's a natural monopoly as Susan Crawford notes (see the embedded video interview).

Competitive markets (like retail grocery and furniture, for example) have many sellers and many buyers. Due to high cost barriers to entry, telecommunications infrastructure is not characterized by a multitude of sellers and will likely never be a competitive market. It's a utility like telephone service as Crawford correctly observes, and should be regulated accordingly.

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