Thursday, July 21, 2016

Political talking points can't trump the microeconomics of residential telecom market

Tennessee Study Shows State Remains A Broadband Backwater Thanks To AT&T Lobbyists, Clueless Politicians, And Protectionist State Law | Techdirt: "Norris, who said he remains wary about municipal broadband based on the failure of Networx in his district near Memphis, said he hopes the push for more broadband is not an excuse for bigger government. Sen. Mark Green, R-Clarksville, vice chairman of the Senate Commerce Committee, also expressed concern about allowing government-owned utilities like EPB to compete with private firms such as AT&T or Comcast. "We want to look closely at this study, but in general, I am not for government and business competing in the marketplace," he said.

Carrying the water of the legacy telephone companies, Green is painting a false dichotomy that went by the wayside in 2015. That's when the U.S. Federal Communications Commission adopted its Open Internet rulemaking classifying Internet as a common carrier utility under Title II of the Communications Act.

Those rules implicitly recognize residential premise telecommunications service due to the high cost of building and maintaining infrastructure tends towards a monopoly market. By definition, competitive market forces are absent in such a market. It's another example of a politician trying in vain to trump microeconomic fundamentals with political talking points.

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