Telecommunications is not and will never be a truly
competitive market where consumers can select among many sellers. The economics
simply don’t allow it because it costs too much to enter the market and the
return on investment under the dominant, vertically integrated, subscription-based
business model is too skimpy or too far in the future to attract would be competitors.
If telecommunications were a truly competitive market, consumers no matter
where they live would have multiple sellers and services from which to choose
just as they do other consumer offerings. Cherry picking in a few select metro
markets as we’ve seen with Google Fiber and AT&T’s “Gigaweasel” as fellow
blogger Steve Blum dubs it is hardly robust market competition.
That’s a key distinction. Telecommunications is not a
consumer market. It’s a natural monopoly market and the incumbents have
established their place in it. And they vigorously defend that place. That’s
not evil as Susan Crawford recently pointed out. The incumbents are merely
doing what they must do to faithfully and diligently serve the interests of
their shareholders no matter how smarmy, greedy or disingenuous it may appear
at times. Shareholders come first, market demand second. And the interests of
the demand side of the market can easily remain in second place in a natural
monopoly market because there is and won’t be any pressure to offer more to
maintain market share because market share is assured. The market will accept
whatever it’s offered because it has no choice – and cannot have meaningful choice.
That’s why consumers complain service sucks equally between legacy telcos and
cable providers.
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