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Baby Bells Victorious Over Sharing Rules
An Anonymous Coward sent in somewhat troubling news for people who like high-speed internet access at reasonable prices: the Baby Bells have won their legal challenge of FCC rules requiring them to accomodate competitors providing high-speed internet access. The FCC has already been moving toward this on its own (the FCC is headed by political appointees appointed by the President), but this court decision will accelerate it: neither the current FCC nor the courts are going to stop the Bells from squeezing out their competition. There's a CNet story and the decision is online.
BellSouth, Verizon and SBC Communications hailed the decision as conforming with FCC Chairman Michael Powell's plans for the industry.
Powell's job must be so easy - just let the market decide! Then take a nap. If anything really important comes up ask Dad in the State Dept, he'll know what to do.
try { do() || do_not(); } catch (JediException err) { yoda(err); }
I think companies here in North America still have a lot to learn about cooperation as a method of business. I mean, we have incompatible cell phone standards, lots of proprietary interfaces, etc. The real value in any economy comes from trade - which is basically different things interacting. The more we create closed off little worlds, the worse we do, and yet it seems that's all North American businesses are interested in these days!
Websurfing done right! StumbleUpon
augment your senses: http://sensebridge.net/
In Ontario at least you don't have to get your DSL through the phone company.
In larger areas you can choose from cable or DSL through either hte phone co or someone else.
"...troubling news for people who like high-speed internet access at reasonable prices..."
It's also bads news for freedom of speech
Whereas in a competitive environment ISPs can compete for savvy customers by touting their lack of restrictive practices (such as server-side censorship software that eliminates client-side choice), now they'll be more worried about not offending the big-hitters like the Christian lobbying groups who have the Washington-level power to disrupt their cosy monopolies.
Fortunately, I've been able to run with a local ISP, QX.net, on top of that DSL line. They're top drawer. Call their office and you get a technically proficient human being. You all know well enough what Verizon is like...
This sucks, but not as bad has shutting out a local ISP. The day I have to sign up Verizon as my ISP is the day I move to the China moonbase.
Comeptition is reduced, but it is his opinion that progress will occur more rapidly nonetheless. It is certainly true that PacBell was in no rush to distribute new equipment and services that would enrich Covad (hence the "cancellation of Project Pronto).
If a person or group of people wanted to set up their own broadband wiring throughout a small town, what would be necessary?
I'm not talking about the physical components (the wiring, the routers, etc). Are there any legal requirements that have to be met? Do you need to get eminent domain to run over (or under) roads, or simply get permission from the land owners? Is there any way we can bypass the bells entirely?
Duh. But seriously, the courts broke up the bells for a reason, and it wasn't so they could be all bought out into a monopoly again. Forcing 3rd parties to lease their networks will kill the 3rd parties.
Competition will be destroyed. This could easily lead to a situation within a year that leaves SBC/Verizon as the only dsl carriers, and only 2-3 overpriced cable carriers for the nation.
But the point is - the telecoms own the wiring from the switch to your house. Why should government dictate what the owner of that wire has to do with it? Allowing other DSL providers to use that infrastructure is going to cost the Bells money. So I really feel that the court is correct in this matter.
However, I don't want to pay exhorbitant amounts of money for my DSL line. And I think the way to do this is to offer a true competitor.. maybe it's the cable companies and cable modems, maybe its 802.11 wireless, maybe it's satellite transmission, maybe it's something that hasn't even been thought up yet, but there will be a competitor.
And I don't think this is a monopoly any more then I think DISH Network is after buying Direct TV.. they still have to compete with cable companies.. much the same way DSL is still going to have to compete with cable modems, etc. They're selling broadband access, and there will be multiple ways to get it.
This court decision is not the end of the world, folks.
Now I just have to prepare myself to be modded down.. ;)
You are right. Sept. 11 would have happened but W is taking advantage of his "mental immunity" for everybody trying to be patriotic and so nobody is questioning his policies or politics (Iraq, Enron) when they very well should be scrutinized. But worse yet, it isn't just Bush that is doing this. Congress, RIAA, MPAA, and Microsoft are all using the terrorist attacks as shields of their messed up policies. Everybody is pushing for copyright laws and pro-DMCA because "terrorists" are the ones who crack programs. Also, according to Microsoft, the anti-trust case is taking resources away from the investigation of the attacks. Of course this is all bogus, but nobody of power and influence is saying anything because then the Republicans will label them as anti-American.
Hopefully, this phase of trust in our government will pass and we can get back to criticizing them when they do something stupid.
...And when they came for me, there was no one left to speak out for me." - Martin Niemoeller (1892-1984)
Why should the baby bells have to provide the infrastructure for their competition? This decision is actually better in the long term. In case you haven't noticed, customer service has gone way down since the bells were forced to open their phone lines up. What happens when an entire neighborhood no longer uses a bell? Why shouldn't bell just pull out of that neighborhood and no longer support those lines? Then what happens? Yep, the company leasing the lines can't help the customers because they don't know what they're doing or they don't have the knowledge the bells do of the system in place.
Broadband suffers from the same thing. If you want cheap broadband, wait 20 years. If you want high speed access now, expect (and be willing to pay). And if you want competition, then be willing to pay higher (should be only to begin with) prices while infrastructure is being laid. The baby bells should not be required to lay the infrastructure for their competition. If someone wants to compete, that's fine, but they should also be willing to put down the money required and set up their own infrastructure, instead of trying to build on top of the bells' hard work.
If 76 Trombones really led the big parade, why did they have anyone else in it?
The court also overturned a 1999 rule that required the dominant carriers to share a portion of a local line into a home so that the customer could have a different provider for DSL (digital subscriber line) service, but keep their local telephone provider.
I wonder how often the existing line was suitable for DSL anyway. Didn't seem like it was the case in SNET country, anyway. If they are saying that you have to run a separate copper line, that's not such a big deal except that I expect that, in areas where they can get away with it, bells charge a lot more for a second line that will be used for DSL than they do for one that will be used for POTS, even if they would be conditioned the same in either case
"The commission's own findings repeatedly confirm both the robust competition and the dominance of cable in the broadband market," Williams said.
So they are trying to look at the total competition picture rather than just DSL vs. DSL. Probably a good idea. The problem with all this is that telcos have all kinds of weird deals with state and local gov'ts for what can be provided, etc. There are all kinds of unintended consequences whenever changes are made that end up muddying the waters. Sucks. It also sucks a lot to have to depend on your competitor for your service to work. As long as the bells get to own the wires and sell networking that runs on the wires, providing DSL will be messy.
completely failed to consider the relevance of competition in broadband services coming from cable (and to a lesser extent satellite). We agree.
Cable is absolutely NO competition for DSL. My requirement was
1) static IP
2) low price
3) allows servers. I run mail and http servers.
My directtvdsl is $49 a month with a static IP. If they take this away, I'm screwed. I'll have to pay a bundle to get the same service from the phone company.
If tits were wings it'd be flying around.
Wake me up when Ford is the only company that is allowed to provide cars in my area.
--
E_NOSIG
One of the biggest barriers of bringing DSL to my community (other than it's small size) is the fact that after investing a rather large chunk of capital in equipment, the phone company would have to share access to competitors.
I'm all for competition, but when that very competition is delaying rollout by years, I see this as a partial win.
For those who already have the access they want, they probably have options such as DSL and Cable, and maybe even Wireless. I have none of those. When the phone company already has to compete with Cable and Wireless, they won't even enter a market when they have to make the investment in equipment that other get to use to add to the level of competition.
Knowledge is of two kinds. We know a subject ourselves, or we know where we can find information upon it. -Samuel Johns
I think the point is that the infrastructure the Baby Bells are so keen to shut competitors out of was originally provided by public funding (much like highways).
So lets say the government privatises highways, selling them all to Ford. Ford would just have won the right to block Kia-made cars from using the on-ramp.
Reduced competition & corruption (aka lobbiest pay-offs) are going to rot the US economy from the inside. Where does the US rank in the world now for broadband penetration/adoption??? Further and futher behind....
This is really troubling. As an ISP in QWEST territory it might spell trouble for us in terms of the Internet service we provide to our clients.
All they have to do is declare us a competitor instead of a client, and poof! there it goes.
Furthermore, lets not forget that the BELLS get huge tax breaks and subsidies to build out the wiring to provide service.
All those Universal Service Fee's we pay on our lines to help make sure that EVERYONE gets phone service.
I think to some extent that this will eventually get challenged and reversed. Much in the same way MCI and Sprint and the cast of THOUSANDS of small long distance providers have the right to serve your LD needs on your ILEC provided lines, so should the physical plant be open as well.
Of course, you're getting this IMHO from a guy that thinks the cable companies should be open as well, given THEIR tax breaks etc.
Then again, this might help force Neighborhood Wireless Access Points to more of a real thing....then again we have other special-interest-group-companies that want to block up the airwaves and control them. Anyone remember XM's challenge to 802.11 that got essentially rejected?
</flame off>
;)
Old age and treachery almost always overcome youth and skill.
Try Qwest. They lie about everything, make you wait forever for anything to get accomplished, and their billing department has to rival the IRS when it comes to complexity of an organization.
I've had Verizon (DSL, home phone, still have Verizon Wireless). I've had Qwest (DSL, home phone). I had good service from Verizon, and most definately did NOT from Qwest.
As soon as AT&T digital cable is rolled out in my area, I'm dumping my landline and going with AT&T phone service over cable. Qwest will not get another cent from me, ever again.
It's a shame Qwest won't have to share their lines... Anything to make those bastards work for their money is fine with me.
The obvious answer is just move to cable, since cable companies want to provide phone service you should be able to choose who gives better service. Now if cable companies weren't even more evil that the worst baby bell.
Still, it is worth your while to keep checking out the compitition. If the bells see everyone switching to cable modems and cell phones they will respond (eventially). There are local 802.11 (and other licensed band are possible) networks to connect to. Satalite works great for some people.
Remember, you can turn this into a non-issue, but only if you tell everyone you know that there are options and they should check out cell phones (my cell phone is more talk time then I need, free long distance all for what a land line would be.) Cable is trying to get into the phone market. Let everyone blindly use the phone company, and the phone company has won. Tell people to compare service, and the phone company will start losing. Not everyone, but enough to affect the bottom line, and that is what will bring service to your neighborhood.
How would competition and QOS differ if instead of the phone company owning the wire, the consumer was able to buy that last stretch of cable to your home. Ignoring all bad factors such as having to replace a crappy cable yourself. What would the benefits be? You would be able to dictate what you wanted to run on the cable, who you wanted to run it and a variety of other things. People who want to replace their cables with optics could hire an 3rd party to replace their cable for them. Instead of hasseling with the phone company. Who more than likely won't replace your cable unless your whole neighbor needs replacing. People who want the good stuff can get it and those content with shitty copper can still have it.
Am I off my rocker or is there something to this?
There's a huge difference though. Kia didn't have to dig up every lawn in the US to start selling cars.
Competitive telecom companies aren't even allowed to dig up your lawn and attach wires to your house (Or to run a cable across your lawn to get to your neighbor's house). If you want competitive local loop access, you need to either force the incumbant providers to lease out their wire, or you need to let competitive telecom providers have access to private property to run cable. Which one of those do you think is more practical? (Consider that you don't need wire from more then one company to your house because you're presumably only going to buy one provider's service at a time).
If the fees are reasonable, and they aren't loosing money on the deal, then the incumbant phone companies should have nothing to complain about. They should be bending over backwards and kissing our asses for letting them exist in the first place. Not everybody gets to be an exception to the rule.
Note Covad's stock dropping 12.5% on this announcement, their days must truly be numbered now...
:-(
Also note the previous weeks price erosion (no doubt the cronies running the FCC/judiciary getting friends & family to sell short before the press release...). Why oh why can't I be a crooked public official on the corporate payroll!?!?
a victory for the cable modem industry since dsl will become increasingly less competetive (viva isdn). and hopefully this will spur even more interest in alternative routes like wireless.
I'm just glad I live in Canada where I have the choice between 3 different DSL providers or cable at about $35US/month. It seems like the states has really fumbled the ball when it comes to providing high speed Internet to everyone. The FCC should be creating more competition not less.
The Media Borg's Man in Washington
Their Man in Washington
Which is interesting, since "free trade" was a key part of his election platform. Since getting into office, he's slapped tariffs on steel, signed a huge farm-subsidy bill, and made a bunch of other dumb decisions which benefit the people who funded his campaign at the expense of free trade and fair competition. This move is just another drop in the bucket.
It's just going to slow broadband adoption (less competition) and allow the Bells to sit on their fat T-1 revenues.
if the Bells sit on "their fat T-1 revenues" too long they will find that their chance of a large market share has been gobbled up by cable, satellite, and wireless. They know better than to let this happen, they just want to make sure that small ISP's can't compete with them (over their own lines at least), and for now they seem to have succeeded
Unless I'm reading this wrong, you don't have to worry unless you have only one pair of telephone wires run to your house/office. The decision says it removes the "line sharing" stuff from a list of services that must be offered to CLECs without bundling. This is that the phone company can deny CLECs access to the loop already providing your voice phone service. They hinted at, but ultimately balked at deciding to throw out the whole unbundled service mandate list. It looks to me that Covad can demand a local loop to your house if there is a dry one available. Go to your box and find out how many pair you have!
--- Nothing clever here: move along now...
I know for a fact that this is really bad news for the city that I live in. Sprint owns all the phone lines here, and are notorious amongst local residents and (especially) businesses for being extraordinarily slow (as long as weeks) making installations and repairs. While Sprint does offer DSL in town, they masquerade IPs and have rather unreliable speeds. A regional telco exists that provides almost flawless service (less than an hour of downtime in the past two years) and gives you real IPs so that us geeks can operate servers and other nonsense on them. Suddenly, it appears as if this telco may no longer be able to service us and we'll have no comparable alternative to it.
When I signed up for their service, they had me a modem at my house and another ready on their end within 24 hours. I then sat for nearly THREE MONTHS waiting for Sprint to get off its ass and turn over the phone line, which as I understand it is a completely computerized process that requires almost no effort on their part. Sprint wouldn't talk to me because I wasn't technically a customer (the other telco was, they said) and all the other telco could do was keep asking them over and over to turn over the line. Finally, after running around in circles for months I had a lawyer friend of mine fax them a letter threatening legal action, whereupon the line was turned over less than 24 hours after sending the fax.
Since then, the wait hasn't been as long, though it's still generally between two and three weeks, which is unreasonably long for a 5-minute (if that) action. I can't imagine what it would be like here if Sprint wasn't even forced into competition with this other telco.
I wish we had another "real" party in the USA (the reform party of a few years ago was basically a "vote for me - these guys suck" party).
I feel like I'm stuck in a Douglas Adams novel:
Sleep is just a poor substitute for caffeine, anyway. -Bob Lehmann
Sorry, wrong answer, the DMCA passed under the previous administration.
09f911029d74e35bd84156c5635688c0
I'm all for competition, but it seems to me that the flavor of "competition" these rules were designed for foster is an awfully strange beast. I can't think of any other industry where the larger firms are required to share their facilities with smaller competitors.
I think the basic problem with this approach is that someone has to decide what a "reasonable" price for access to Baby Bell lines is. If that price is too high, baby bells will be able to undercut them and they'll get driven out of business. However, if the price is set below the market rate, then the upstarts will forever be living parasitically off the efforts of the local Baby Bell, and will never have any incentive to build infrastructure of their own. As a result, the "competition" between the Baby Bell and the upstart competitors will be fought in the political arena over access to shared resources, rather than any sort of competition in the open market.
What ought to be happening is upstarts should be putting their own coax or fiber in the ground. Then there'd be no issue of who has to share their lines with whom. The problem is that state and local governments make this almost impossible, by signing exclusive contracts with a single cable or phone company and giving that company a de facto monopoly. Clearly all the regulatory hurdles to start a competing network is all but impossible.
It seems to me that the efforts of the geek community should be aimed at breaking down those political obstacles to new development, not taking sides in the pointless battle over how much the Baby Bells should have to "share" their facilities with competitors. As long as such "sharing" is the basis for competition, the Baby Bells will continue to dominate the market, and competing carriers will continue to place their stock in lobbying for more "access" to the entrenched monopoly's facilities rather than focusing on building competing infrastructure.
I pick getting kicked in your nuts.
Let's get rid of the *rest* of the 1996 TCRA.
Fascism starts when the efficiency of the government becomes more important than the rights of the people.
but this will most assuredly go to the Supreme Court. No way will this be allowed to stand without a fight.
sulli
RTFJ.
READ THE DAMN ORDER!
The only thing they got was an order requiring the rules to be reviewed. Nothing was thrown out. Morons.
Yep, and major news outlets do it all the time. They bring in other details and facts, which by themselves are facts and probably meaningless, but when connected to a specific story they can help the reader/listener draw some conclusions.
A simple example of this was a map on the front page of my newspaper the other day. It showed Chandra Levy's Apartment, her gym she worked out at where she was last scene, where the found her body, and last, that senator's apartment was labelled too. By itself it's not a very interesting piece of news, but it is suggestive to the idea that he was involved somehow in the incident.
It happens all the time, some people just don't realize it is being done.
What?
Illinois took Ameritech to court last year over the same issues.
Illinois won. Now SBC has legal minimum service standards or they risk having to pay millions of dollars in refunds (again) or losing their charter to operate the CO (if the state legislature decides to get involved).
--- Nothing clever here: move along now...
government should own the landlines. kinda the same way they own the roads. most people would consider telephone/broadband wiring essential infrastructure nowadays. So why don't we have the government treat it as a utility and the different companies compete for repair and lease rights?
If 76 Trombones really led the big parade, why did they have anyone else in it?
In Illinois, when you pay to have a line installed, you bought the local loop(s) for however many pair they charged you to drop. I think the subloop (pole to your house) can be claimed by you. The rest of the loop is a grey area owned mostly by the phone company, but held in public trust by the charter granted to the phone company.
Can anyone refute/substantiate this?
--- Nothing clever here: move along now...
Recession is two consecutive financial quarters with inflation that meets or exceeds growth.
--- Nothing clever here: move along now...
I can't believe the communist crap I am reading on this board.
What makes America great is that we arn't a pure capitalistic society... if we were, we would quicly slide into a dictatorship as companies gobble up smaller companies in order to form monopolies, etc. Further, we are not a pure socialistic society, private ownership is essential. What we are is a pretty-good ballence between the two extremes. Unfortunately, for the last 10-20 years the power has been getting out of ballence, with capitalistic forces now having more control then the democratic forces. This is clearly seen by the acquisations of congress people doign the bidding of companies instead of people.
Have you read Adam Smith's title called The Wealth of Nations? It rests on a principle of a competitive or free market economy; a competitive market being defined by many economists as one where no single supplier holds more than 20% of the marketspace, having 7 or more distinct direct competitors. Only under these circumstances will capitalistic markets bring the highest value to society. In marginalized situations, where a single company holds a large share of the marketplace there isn't a choice, it is called monopolistic.
Monopolies in general arn't bad, but a special class of monpoplies which provide for essential services are problematic. Telephone is essential in our day and age (ever try to get a job without a telephone number?) and the baby bells have a huge part of the marketshare for telephone and related land-line services.
So. What do we do with essential monopolies? There are two extremes forms of control; Democratic (one customer one vote) or Dictatorship. The latter choice is usually bad since, if left to its own devices, it will maximize profits by overcharing the customer, causing huge distortions in the economic system and undermining other markets and thus our free market economy. The former choice is not great, but variations of it are important to consider.
One form is to have government operate the smallest, most essential service of the business which cause it to be a monopoly. Our roads are good examples. The government owns them, but services to maintain the road (which can be competitive) are all farmed out to various companies who can bid. The government need not create the road signs, for example. The other form is to let a private dictatorship run it, but regulate the dictatorship. Unfortunately... there just arn't any other options!
As for the phone systems themselves, a bulk of the funding for these systems were initally provided by the government (the people) since setting up a phone infrastructure is a huge operation... thus to say that private enterprise has done this is just not true. Private funding for stuff is usually not long-term. More often than not, public funding for bring projects is the only way to get them done.
Your black and white charactization is just dead wrong. It isn't iorn grip of Washington that is the issue. Washington is just the government controlled by either Democratic or Capitalistic forces. In this case, we have yet another victory for the capitalistic force; which already has the bulk of the power. The more we allow this to happen the closer we come to having a pure dictatorship. By the way, if we were shifting to be totally socialist (everything decided by the people with equal weight), then I'd be arguing on the other side of the fence. This is a delicate ballence, not a black vs white issue. Becarefull for what you wish... you may just get it.
Wake me up when Ford is the only company that is allowed to provide cars in my area.
I'd prefer if you just let me sleep...
Your problem isn't that you are too far from the CO, its that your line is provisioned in an incompatible manner, or was in the past. For instance, if you have a MUX (two lines on one pair) DSL won't work. If there ever was such a beast on your line, the phone company probably thinks its still there, because (regardless of your ILEC) they are notorious for their incompetence.
A well-crafted lie appears unquestionable - Dama Mahaleo
Last mile wire may be owned by Bell Canada, but other ISPs can use it.
End result is I do not have to deal with sympatico to get my DSL.
How do you think the Bells got all that wiring? They were granted a monopoly, which made it possible to pay for all of it. How come nobody else gets such help from the government? The Bells wouldn't have that wiring if it weren't for the government. The government didn't want everyone and their brother laying wire all over the city. So they only allowed one company to do it. Now they turn those companies loose with no competition. Nobody else is going to be able to build that kind of infrastructure again because nobody else is going be be handed a monopoly by the government. The only sane solution is for the city to own the infrastructure and allow all of the various service providers to have equal access to it.
It's not enough to bash in heads, you've got to bash in minds. - Captain Hammer
Wake me up when Ford is the only company that is allowed to provide cars in my area.
Heh:
Your Honor, he ain't Chevy, he's my br...uhhh...Oldsmobile?
and am I the only one who thinks KIA is a bad name for a car? (think the acronym K.I.A).
.
Have you read the moderator guidelines? Well, have you, PUNK? (and I want a Karma: Gnarly option)
Bell had the most lines and the patent on the telephone, so it was common sense to give him a regulated monopoly for wires in the ground and to install phone service everywhere.
Giving them a monopoly isn't the problem. It was the right thing to do at the time. The problem is that due to that monopoly they have become very well entrenched and competition doesn't stand a chance without access to the infrastructure. The government created the monster, they need to control it. This ruling just shows that that isn't happening.
It's not enough to bash in heads, you've got to bash in minds. - Captain Hammer
err it said the president, NOT which president.
and c'mon you are right it is not GWB's fault, he would have to have an IQ slightly higher that 87, AND actually be in charge. Neither of which he qualifies for. I'd say Cheney qualifies as 'handler' and someone with CIA contacts is still in charge...
errr....umm...*whooosh* *whoosh* Is this thing on ?
However also keep in mind that the fact that there are 4 other parties to choose from there is a great deal of vote splitting that goes on between parties with similar platforms (i.e. Canadian Alliance and Conservatives). The only reason the liberals continuously get in is the right is divided and the left (all relative to the current political situation) is left entirely to the Liberals because the NDP is a very poorly run party with a worse provincial record (can anyone say BC). It's likely the fact that the Conservatives imploded after Mulroney that an extremist (depending on your view) party like the Bloc was able to form by picking up old Conservative votes in Quebec (this is pure speculation on my part). While the multi-party system does give us more choice it also effectivly limits that choice by placing the majority of the power in the hands of strong regional parties (Liberals, the Alliance, the Bloc) and punishing the parties with a more widespread base of support (NDP, PCs) and when it comes down to the choice of Prime Minister it really mimics the US in the fact that the decision is pretty much eft up to Ontario and Quebec and even then Quebec essentiall works outside by voting for the Bloc. Other than coalitions what other party has even formed the government than the Liberals or PCs? The only time it really is an issue is we get a slightly more multi dimensional debate and the other parties sometimes formed the opposition and got a chance to pressure the government. The fact is that unless the Canadian Alliance merges with the conservatives or implodes we will never get a different government (at least for a few decades), the other Parties are marginal, the PCs lose too many votes with them and the east will never accept a government that it percieves has western roots.
I stole this Sig
Monopolies exist for one reason and one reason alone, because the government forces others to accept them. ... True monopolies are not arbitrary numbers of market control, a monopoly is ONLY POSSIBLE under threat of violent force. A monopoly is absolutely impossible in a free society.
This utter and complete nonsense means that it's time for a basic economics lesson.
There are generally considered to be three major types of monopolies: natural monopolies, local monopolies, and regulated monopolies.
The first type of monopoly, the natural monopoly, is the result of economies of scale. When an industry is a decreasing cost industry, increases in production lowers the LRATC (Long-Run Average Total Cost). This is what is referred to as economies of scale. The more infrastructure you build to support production, the cheaper the cost of production becomes. If the bottom of the company's LRATC curve intersects the market demand curve or is beyond it, then when the company has scaled up to cut costs as low as they can go, it has become a natural monopoly. Firms entering the market will have a much higher ATC until they can meet the same level of production as the monopoly maker. However, without the ability to lose money for long periods of time, the new entrant will never be able to reach the same level of production as the the monopoly because its costs are far above what the monopoly can charge for the product. In this case, the barrier to entry is the economies of scale.
The second type of monopoly is the kind that the phone companies are usually considered to fall under, the local monopoly. These monopolies form when only one company services an area. Utility companies are some of the most common types of local monopolies due to the expense of setting up alternative infrastructure for competitors. Without forced access to the private infrastructure of the local monopoly, the overhead costs of setting up business are usually too great to recoup at rates competitive to the local monopoly. Other local monopolies include stadium parking (only so much nearby space) and the concessions stand at a movie theater (can't bring your own food with you). In this case the barrier to entry is control of an essential resource.
Finally, you have regulated monopoly. For one reason or another the government has decided to grant monopoly control over a market to a company. Examples of this include patent holders, copyright owners, and certain kinds of government contrators. The barrier to entry is government dictated here.
Utility companies fall under all three categories. Economies of scale give the local utility the severe advantage unless the government forces them to share their production infrastructure in some fashion. They are characterized by controlling a geographically-tied market, and they are subject to many kinds of government regulation to avoid the price-gouging and customer abuse that comes with a captive market.
Violent force is completely unnecessary and happens extremely rarely in the real world. A company that is up against a natural monopoly is driven out of business by the higher cost of production. In addition, should the competitor manage to draw close to the monopoly's price, most monopolies set their production along the demand curve so that they maximize profit (when MR = MC, something that you can look up on your own). This is not nearly as low as they can go. Quite simply, market forces will drive the competition out of business. Regulated monopolies are kept out of business by the fact that entering the market may be illegal. Usually the courts are enough to stop production without need for police action. Local monopolies straddle the line. However, it's the possession of a critical resource that keeps them in control. All sorts of legal means, such as property rights and the expense of finding/creating an alternative resource are enough to keep them out.
I'd recommend taking a basic economics class before pretending to know something about monopolies. Failing that, there are several good resources online that you can find via Google. Unfortunately, all the good ones with diagrams are not in HTML format, so I couldn't post a link to a diagram of the demand curve set against the LRATC curve for you.
If it's for-profit but free, you're not the customer -- you're the product (e.g., the Slashdot Beta's "audience").
Comment removed based on user account deletion
.. because you are obviously very young and VERY naive.
As others posted, the Baby Bells were GRANTED monopolies. The huge opportunity is already there.. allow others to give you broadband over land lines. DSL/Cable is expensive because each carrier has a defacto GOVERNMENT enforced monopoly.
If the bell system had footed the complete cost of the wire you'd be almost right on the mark. BUT, they did not. They put the wiring in, then charged back the cost to the U.S. taxpayer in the form of tax breaks. This isn't like Dagney puttin in rail that's paid completely out of the coffers of her railroad... It's like Dagney putting in rail, charging the cost to the taxpayers, then claiming ownership of rail her company never paid a penny for (now THAT is looting).
Steve's Computer Service, Hobbs, NM
Yes the phone companies own the wires. HOWEVER.
Using precisely the arguments which won this case the regional Bells can now put every other dial up ISP out of business. You will use your local Bell for your dial up or you can kiss your internet connection good bye. Since AOL etc. are dial up ISP's they're gone too. We'll shortly be back to the days of "We're the phone company - we don't care, we don't have to."
The free market breaks down when you are dealing with a monopoly because - by definition - there is no competition to keep them in line.
This is blindingly obvious - but somehow that point seems to elude most people's mental grasp.
No structure created by mankind reaches to infinity, and that includes the idea of a free market. There are boundary conditions under which the free market breaks down and becomes destructive; it is important to understand what those failure conditions are.
When I first read the headline, I read it as "Baby Bells Viscious Over Sharing Rules" and thought, "Isn't that the truth!"
Remember "Bring 'em on"? *sigh
Actually, you're wrong twice (I'm not going to call you stupid - this is pretty detailed stuff). First, Gore didn't ask for a "full recount". Gore only asked for a recount in four Democratic leaning precincts. If only these had been recounted, Bush would still have won....
However... if all votes in the state of Florida were recounted in every county, both Democratic and Republican leaning, including the overvotes (ballots in which the candidate's name is both checked and written in) Gore clearly won. By thousands. It's not even close.
(The reason is that Democratic voters tend to be new, and make ballot mistakes. Overvoting is a typical one.)
The media focused on the fact that Gore's selected strategy would have failed to land him the Presidency. But the majority of Florida ballots with discernable intent were clearly marked for Gore.
Anyway, WTF does it take to get decent, non-nosy, affordable broadband? I don't want to leech or serve. I just want to telecommute, serve a web site, and game in peace.
Now off to Memorial Day celebrations where we remember the billions of bots and soldiers who have sacrificed their lives in LAN parties throughout the world. This is best done by sacrificing more bots with a LAN party of your own.
Won't somebody stop this cycle of violence?
this is a potentially troubling development, hopefully something will be done if prices skyrocket, of course windows prices did and nothing happened except a wrist slap
GNU