Thursday, May 05, 2016

Definition of competition in premise telecom infrastructure depends on audience perspective

Crazy Talk from Another Telco-Funded Think Tank - Community Broadband Bits Podcast 200 | community broadband networks

What's all the crazy talk about? In a word, competition. Specifically, competition in premise telecommunications infrastructure. It's very important to distinguish the audience when discussing competition in this context.

From the point of view of the legacy telephone and cable companies that enjoy a natural monopoly or duopoly with their vertically integrated business models where they own both the infrastructure and services offered over it, any public sector infrastructure project is indeed competition because it offers a less privatized or fully deprivatized model to provide telecommunications services -- often using an open access business model versus vertically integrated.

But that's NOT competition from a consumer perspective. Given the natural monopoly/duopoly nature of telecom infrastructure, consumers will never be able to choose from among many competing sellers -- the definition of a competitive market. Due to high cost barriers to enter and operate telecom infrastructure, there will only be one or two providers.

What we are talking about here isn't competing market offerings but instead competing public policy approaches to ensuring universal, high value telecommunications service. Given widespread consumer complaints of neighborhood redlining, poor value and customer service using the current privatized model, the public option looks more and more appealing as time goes on.

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