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Verizon's Solution to Terrorism: Eliminate Verizon Competitors
The New York Times has an article about Verizon lobbying for rate increases and to remove all requirements that Verizon provide telecom services to competitors, claiming that being a large, sluggish monopoly is somehow advantageous in responding to disasters, although Verizon hasn't managed to restore phone and data service in large areas of Manhattan yet. In a related story, an association of small ISPs has surveyed its members and come to the revelation that the Bells are stifling competition.
Get cable. Sounds like in your area its cheaper and more powerful. Why even bother with Verizon? I have them in my area and picked cable instead of their poor DSL.
This is not a troll fighting that cable is better than DSL. I support cable since its an alternative and forces the phone companies into having to compete which, in the long run, should allow for cheaper DSL and better service.
If you have an alternative than take it.
As for Verizon using the 9-11 terror attack as an excuse to stiffle competition: what a bunch of B.S. Greedy companies will use anything to get ahead. Microsoft was all behind calling computer viruses terrorist activity just to try to avoid fixing the problems they were having. Lord forbid they spend more time making their products more secure!
On the one hand, you claim that changes in the rules would be bad. As evidence of this, you use an example of what Verizon is able (not able, rather) to do under the current oppressive regulations.
Verizon never asked to eliminate its competitors. It merely asked to be allowed to compete on a level playing field. The laws that say Verizon must sell capacity to its rivals are outrageouly biased. What, just because Verizon is winning the competition, the government gets to tell it who to do business with? Slashdot has a pretty large monopoly as far as "geek" weblogs go. How would you like it if the government told Slashdot it had to run pro-Microsoft stories?
Price caps are outrageously misguided to begin with. The California power crisis was a direct result of that type of economic micromanagement by the government. Or, how about rent controls in New York. That's a great idea, no? Oh, unless you want to rent an apartment any time soon; or you're a land lord who would like to be able to make market value off his holdings.
If Verizon wants to turn into a "sluggish monopoly", why not let it? Its more nimble competitors should then be able to run rings around it, no? Unless Verizon keeps doing its job as a premier telecommunications provider.
Michael, please take the misinformed commentary elsewhere.
If you have a problem with my views, REPLY, don't moderate!
However, while there are usually strong laws requiring these companies to provide good basic service, there is nothing requiring them to add new services. Sure it would be nice if they added DSL, and if every company had their own copper lines EVERYONE would be offering DSL because they would want the customers. But there is no drive for these companies to offer things like DSL until it is clear there is a HUGE market and it will be worth these while. They have no drive to start offering it until then.
So these monopolies are great for a while but at some point things break down. I am hoping the wireless world will fix this at some point. If you have a large amount of bandwidth that you can use without having to run actual cables but just have some central access points we could see other companies actually break in (ie. we do at least have some actual choice in wireless plans, not just having the same company providing the service regardless of which long distance company we choose).
Phone lines running to your house are natural monopolies. Phone companies providing services and billing you for your calls are not. Before making any regulation, make a distinction between the two. The phone lines and dial tone can be provided best either by a single company that's heavily regulated, or by a municipal line-rental company (think Tacoma's municipal cable). The service and billing of calls, however, is in no way a natural monopoly, and eliminating choice in this will not help anyone.
Another interesting thought, though - phoneline-providing companies are not completely natural monopolies. I have AT&T Broadband for my local phone company, which means that my phone service comes over cable lines, which I'd have running to my house anyway; so if Verizon didn't have any competition in local phone that used its lines, or if there were no local phone lines at all, I could still have AT&T.
What happened in California was that the price of electricity to the power companies was allowed to change, while the price to the consumer was not. At one point when power supplie did not meet demand prices jumped dramatically for the power companies. But the consumers still payed the same rates. So the companies supplying the electricity were required to sell it at a loss. Since being forced to operate at a loss is antithetical to their nature. The electricity companies nearly went bankrupt which would have really trashed California. Other states have implemented deregulation of electricity without any of the problems California had. The fact is the system was over regulated from the beginning.
Slashdot - contra bonos mores
You're forgetting the fact that Verizon didn't get where it is any more naturally than Microsoft has. It is one of the Bells, you know, the original case study for why monopolies should be broken up? And it just recombined with a long distance carrier to expand its still-extant monopoly vertically.
Do you have a
This can in a way even be extended to file formats, protocols and even API's but that would cripple development (so there should be legislation that all file formats, protocols and API's have to be open:)).
Anyway...we don't live in utopia, so don't bother...
0x or or snor perron?!
This does not to me seem possible.
Now I am no expert on the history of utilities in the U.S. (maybe someone with a Ph.D. can shed some light on this), but it seems to me that many people seem to forget that Verizon and other utilities have the advantage of huge amounts of existing infrastructure. (In fact, "Verizon" didn't even install a lot of it -- they inherited it from AT&T in the breakup.) Not only that, but this infrastructure was installed with the aid of and through countless special arrangements with local and larger governments (e.g. the U.S. Federal Government's Rural Electrification Act of 1936).
These governments realized long ago that it was in their best interest to aid utilities in building public infrastucture, whether through loan guarantees, municipal franchises, or other means. Although private firms played a much larger role in the U.S. than they did elsewhere, the utilities' monopolies are nevertheless to some degree government-granted.
While one might suggest that governments simply give the same aid to competing utilities in running another set of lines/pipes to every consumer, that is not only a very wasteful suggestion, but also one that ignores the fact that times have changed and it's no longer so easy to install the infrastructure. (I certainly don't want the streets torn up any more than they have to be.)
It is so unreasonable, then, that we ask these utilities to provide other companies access to the infrastructure that we helped them put into place? (...without dragging their feet and making every install from a competitor take gratuitously long)
Finally, while I agree that some things, like the maintenance of the two copper wires that run from my apartment building to the CO, lend themselves well to natural monopolies, it's not clear that all the other things that Verizon tries to do (Internet access, long distance service) should fall under the same umbrella.
The free market is a great ideal, and I'm all for it, but there are some circumstances where practical concerns make it unattainable and outside interference is required to prevent abuses. Pretending those practical concerns don't exist does not make them go away.
Your qualifying clause in the middle there is, of course, the key to the whole thing.
You may perhaps be forgetting that the telecommunications industry was ostensibly deregulated around 1996. That was the huge omnibus Federal legislation that included, among other things, the Communications Decency Act. It was touted as being a massive win for consumers as competition would emerge for all services, driving prices down, and help spur the development of new services. "Your cable company and phone company will compete with each other! Prices will fall! What could possibly go wrong?"
What went wrong is that the telecomm companies started merging. Before "deregulation," this was prohibited. Now, rather than engage in the messy and uncertain business of actually competing with each other, they just became the same company.
Now, let's say you're an ILEC. Someone walks up to you asking for a high-bandwidth digital connection. Naturally, you're going to steer them toward your T1 and T3 offerings which are pure profit for you. "But that's ridiculously expensive!" you protest. "Tough sh!t, where else ya gonna go?" they reply.
The ILECs didn't start offering DSL until the CLECs, like Northpoint and Covad, did it first. xDSL service from the CLECs continues to suck because... Well, why aren't you buying a T1?
Kuro5hin is currently down, or I'd point you to a most excellent article there explaining why this happened. Basically, the deregulation plan in CA was completely botched. They made the power delivery company (PG&E) buy power in the most expensive manner possible, then imposed consumer price caps, disallowing them from passing on those costs to consumers.
However, it should be noted that PG&E used to be both power generation and transmission (the plants and the wires). After deregulation, PG&E split into a power generation arm and a transmission arm, both wholly owned (but separate) subsidiaries of a parent company. So while the transmission arm was going $5 billion into debt paying for power, much of that money was being paid to the power generation arm, which reported record profits. When asked, "Why aren't you cross-captializing?" the parent company had no coherent reponse. There were also other little shenanigans going on, such as power plants taken offline, ostensibly for maintenance, to make power scarce and drive the prices up. And don't ask what happened to the State of California's budget surplus.
So, yes, natural monopolies are fine, iff (if and only if) they are well-regulated.
Schwab
Editor, A1-AAA AmeriCaptions
One infrastructure that all can share which was by the way developed as a monopoly.
DRM? No thanks, I'll just get it somewhere else...
Everyone and their cousin seems to be using the tragic events of September 11th as a way to push their laws, change their polices, etc. For example, I've noticed that movie theaters make a big deal about you bringing in bags. Is Osama bin Laden going to come to a tiny movie theater in the middle of nowhere? I doubt it. Is it going to make it harder for people to bring in their own food and put more money in the pockets of the movie theater? Yup.
I assume I don't need to mention all of the insane laws that have been passed to give the government more power to eavesdrop on inoccent people ^H^H^H^H^H^H^H spot terrorists. Nor do I need to mention that more than 1,000 Muslims are in jail on no real charges at all, but the government seem to think that being Muslim means that they must be connected... I'm not saying that they don't have some possible terrorists, but, umm... I have my doubts that there were 1,000 people involved. I'd rather see a potential terrorist go free than a perfectly innocent person rot away in jail only because he's from the Middle East.
My intent isn't to bash the government, but merely to comment on how sick and disgusted I am by all the people profitting from the attack.
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suwain_2
no, natural monopolies are not fine. The point about natural monopolies from econ 101 is that they are inevitable (because economies of scale make the biggest producer the cheapest), and therefore they require regulation for any hope that the market price will be close to marginal cost. But that regulation is guaranteed to be imperfect (political rather than economic) and somewhat static or at least "behind" and is no substitute for actual competition.
Think about it: if I have wires strung all over a neighborhood, total sunk cost, how are you going to justify stringing a second set of wires if I promise to price cut you to death? And in fact, the populace should not rationally be asked to pay for 2 (or more) expensive sets of wires when they simply need 1. Even if we start out with 3 full sets of wired networks competing, over time it makes sense for one company to acquire the others and maintain those wires or (fewer of them) because it's cheaper that way, and cheaper for consumers too... till one company emerges and starts raping them.
The utility sector of the economy is definitely governed by the theory of natural monopoly, regardless of the regulatory enviroment.
Then thanks to the lawyers, where I live the company came to be called The Chesapeake and Potomac Telephone Company. Still, standards remained somewhat high, although there was a decline in customer service.
Then sometime later, after another round of lawyers, this once fine company slipped another notch and became known as The Bell Atlantic Telephone Company. Standards were lowered once again. Unskilled contract workers replaced highly skilled in-house technicians. But more sad news was yet to come.
Another round of lawyers later and this company became known as Verizon. Standards were lowered yet again. A once proud technological giant was now being maintained by trained monkeys and ex-cons with GEDs and a tool belt. Service went to hell. Local offices completely disappeared. Customer service amounts to recorded messages accessed by touch-tone codes.
Give me back the Bell Telephone Comany. Give me back real operators, and real technicians. We loved the Bell Telephone Company. They did things right.
Reading straight from my Microeconomics textbook, "A monopoly is a firm in an industry where the entrance of competing firms is blocked."
From the article:
In Washington, Verizon lobbyists have asked federal regulators to make it more difficult for competitors to lease space on its network, arguing that its success in restoring phone service in Lower Manhattan proves that only a big company could handle maintenance, recovery and security in the wake of such a disaster.
Looks pretty cut and dry to me.
sig?
I'm sure he was just pissed that I robbed him of the karma he could have gotten had he posted the link first :)
If I cared about my karma, it wouldn't be at a mere 19...
I post what I think, and if that means that posting anything that reeks of criticism of slashdot, linux or the GPL decreases my karma, so be it. It only reaffirms my belief that a lot of the people posting and moderating on slashdot are incapable of seeing the shortcomings of either of these three things. This is too bad, because sticking your head in the sand never solved a problem.
(note to moderators: according to established doctrine, this post should be marked "flamebait" or "troll")
A coupla axioms courtesy of goodwid:
It's unfortunate (and shoddy thinking) when only one aspect in a very complex situation is presented as a first cause. However, in this case, the poster's wrong-headed axiom in item 1 leads to the even more wrong-headed axiom 2. Here's a clip from a previous post of mine de-bunking another market uber alles stalwart's assertion that Cali De-Reg was de-regulation in name, but not in fact. Keep in mind, and as noted elsewhere in this thread, in the Cali debacle the wholesalers and the retailers were often siblings of the same corporate family; losses incurred to the one were profits to the other (and the twain meet upstream at the holding company -- see PG&E):
Naturally, there's considerably more involved than energy industry collusion (the pols who voted Yea on this thing, for one), but reducing the problem to one of inefficient communication between sectors (retail to wholesale), won't help us get where we need to: a reliable, cost-efficient power system.You are absolutely correct. Propbably the first comment do far that deserves +1 Insightful.
People were wrong about thinking that half-assed competition in California would be a good idea. The were wrong again when they thought that competition caused the crisis.
In true developed countries, there has been deregulated full-competition energy supply for a meny years now. And before they got that far, there was public debate about the pros and cons,
and care was taken to avoid pitfalls.
US politics is different. Powerful lobbyists can butter up legislators to stall the process or get it their way. In other countries we have the occasional kickback or bribe scandal. In US politics you rarely have a curruption scandal, because it's all legalized. One may bribe openly by contributing to campaigns. I laugh everytime an american is shocked about corrupt politicians in African countries.
In an advanced, modern nation, suppliers, brokers and delivery companies are free to trade contracts on different markets. The spot market which takes care of short term supply, to balance the grid, the short term market, which has a horizon of a couple of weeks, and the long term market with a horizon of a couple of years. On the spot market you can get energy almost for free when there is a surplus, but prices can easily jump to 10x regular prices in a crunch. End consumers get to chose their provider, and can bind their contracts to the long term market, or chose to pay a variable market rate.
The only thing the california crisis proved, was that legislators are incompetent and currupt, consumers are stupid, and that energy companies are greedy. We surely did not learn anything new.
But we all digress. On Verizon, it is no coincidence that they put forward these proposals now. They have all their ducks lined up. The current FCC board is very friendly with the baby bells, and so is Bush's government. If you want to get to the bottom of this, follow the money.
-- Another senseless waste of fine bytes.
A natural monopoly comes to be when the market decides that a single product is more advantageous than a diverse one. The OS example is a pretty good one. There were advantages from application development, training, standardization of hardware on having a common operating system, and MS took advantage of it.
Except that they did so by bending and occasionaly breaking the law. So it's hardly the case that the market decided. For that to have happened there couldn't have been things like the exclusive OEM contracts...
Yes, the Bells want competition. About as much as Fidel Castro wants free elections. I know well; I work with CLECs, write business plans for them, work on the interconnect agreements between CLECs and Bells, etc. The Bells do every trick in the book, and then some, and know that they can get away with flouting the law by using political influence.
The Bells are the holders of the former AT&T local monopoly. AT&T got the monopoly in 1876 via the patent. When that expired, they bought another patent (Putin's, for the loading coil) that gave them a monopoly on calls of more than ten or so miles. When that expired, they already had a huge advantage over their many, many competitors (CLECs were common as dirt ninety years ago). They then agreed to become a regulated monopoly, and the other local phone companies either accepted a buyout, shut down, or stayed out of Bell territories (whose territorial borders, most of the urban/low-cost-to-serve areas, were then blocked from expansion). So we ended up with multiple local monoplies.
Those days are over. VZ wants it all, minus the regulation. Whatever works for CLECs, they'll come out against it. Count on it.