Rural areas in Marion County could still get broadband access | Times Free Press: JASPER, Tenn. — Like many local governments across Tennessee, Marion County leaders have been pushing for a couple of years to change state laws that restrict municipal utilities like EPB's gigabit internet, TV, and phone services from expanding beyond current borders. EPB has petitioned the state and the Federal Communications Commission, too, and Mike Partin, president and CEO of the Sequatchee Valley Electric Cooperative, said broadband access has been "widely debated across the state."That argument would hold water but for a single fatal flaw: telecommunications infrastructure is not by nature a competitive market but rather a natural monopoly/duopoly. Shouting "unfair competition" in a noncompetitive market doesn't pass the straight face test.
"So far in the [state] Legislature, that has been defeated," he said. "AT&T has a pretty extensive lockdown, it seems like, in the Legislature. That's one of the holdups." Telecommunications companies such as AT&T and Comcast argue that it's unfair to allow government to compete the market with private industry. (Emphasis added)
Analysis & commentary on America's troubled transition from analog telephone service to digital advanced telecommunications and associated infrastructure deficits.
Showing posts with label unfair competition. Show all posts
Showing posts with label unfair competition. Show all posts
Monday, October 03, 2016
Incumbent bellyaching over "unfair competition" from public sector fails straight face test
Tuesday, August 26, 2014
Unpacking claims of “unfair competition” when the public sector finances or builds fiber to the premise infrastructure
Incumbent
telephone and cable companies often cry “unfair competition” when the public
sector invests in or builds fiber to the premise (FTTP) infrastructure. Let’s
unpack that assertion. From the point of view of these companies, anyone who
builds infrastructure they don’t own is a competitor. They really
don’t compete to gain customers in a given geographical area. That’s because telecommunications
infrastructure isn’t truly a competitive market characterized by many sellers
and buyers. Rather than competing for customers, the incumbents’ true interest
is in protecting their monopoly or duopoly status.
True
competition occurs in a market where buyers and sellers are on a level playing
field and buyers have relatively equal access to market players and information
on their services, benefits, prices and value offered. That doesn’t happen in
telecommunications infrastructure. Incumbents have the upper hand in deciding
which neighborhoods they will serve, what services will be offered and at what
price. And they don’t disclose where they plan to build FTTP infrastructure.
The
public sector typically gets involved in investing in or building FTTP infrastructure
not to compete with the incumbents, but to remedy the market failure they
create given their power to pick winners and losers among the neighborhoods
they opt to serve and those they choose to redline and not offer service.
Finally,
since the public sector typically invests in open access infrastructure and
provides wholesale access to Internet service providers (including the
incumbents), that’s also not direct market competition with incumbent telephone
and cable companies. It’s an entirely different playing field and certainly not
the same one used by the incumbents who won’t play ball unless they own the
field. Hence, there’s no direct competition, fair or unfair.
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