Saturday, February 27, 2016

Yet another think tank makes false "market competition" argument in defense of legacy incumbent telephone and cable companies

Don’t put bureaucrats in charge of broadband | Columns | richmondregister.com: State lawmakers instead should search for ways to eliminate barriers to additional investment by private ISPs instead of raiding their customer base, which threatens to drive them, the jobs they support and tax revenues they send to Frankfort out of the commonwealth altogether.

By ending KentuckyWired once and for all, the Bevin administration would accomplish what federal bureaucrats who want to dictate the Bluegrass State’s broadband policy can’t be trusted to do: protect the best interests of Kentucky taxpayers and consumers who pay the bills.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Yet another think tank attempts to argue public sector investment -- even disregarding the fact that it's woefully insufficient -- is inappropriate for telecommunications infrastructure because telecommunications infrastructure is a competitive market. This is the falsity at the heart of the argument. It's not a competitive market because competitive markets by definition have many sellers and many buyers. Telecommunications infrastructure, however, is a natural monopoly or duopoly market because the high cost of building and maintaining it keep out potential new providers. That makes it like other high cost infrastructure such as roads and highways that are financed by the public and not private sector.

Mr. Waters is preying on economic ignorance to make a disingenuous argument and in so doing is rendering a great disservice at a time when the nation's telecommunications infrastructure is far behind where it should be in 2016 and for the future. He also employs a favored tactic of the dinosaur incumbents by focusing the discussion on "broadband speeds" in order to distract from the need to replace America's outdated metallic landline telecommunications infrastructure with modern fiber to the premise networks -- a thought trap that has ensnared most public policymakers and the mainstream and info tech media. It's time he and others stopped trying to postpone the future to protect last century's telephone and cable companies and allow technological progress to take its course into the 21st century.

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