Reply to post: Re: Monopoly = Artificial Scarcity

Oh girl, you jus' didn't: Level 3 slaps Verizon in Netflix throttle blowup

Charles 9 Silver badge

Re: Monopoly = Artificial Scarcity

It depends on the industry. When it comes to water, sewage, electricity, etc. Multiple providers are a problem because the infrastructure is an eyesore, leading to NIMBY issues. But most communication infrastructure isn't such an eyesore, to the point that two more more sets won't be so ugly.

The problem in this case is that utilities have a very high upfront cost (as in you have to put in all the money to lay down your basic infrastructure before you see one penny of return), making it a barrier of entry that favors incumbents who ALREADY have their infrastructure down (their upfront costs are already sunk).

View it another way, and you see the problem is a case of vertical integration. The incumbents own both the content and the means to distribute it (think rail companies that owned mines and timber forests in the past). Perhaps the most reasonable solution is to force a breakup of this integration. If the content and the transport were forced to operate separately, with the transport required to be an open and equal provider, then newcomers can lease time from the transport to get a foot in the door. That's why MVNOs work: they lease abilities from the big guys and compete by serving customers the mainstream doesn't prefer like the price-conscious.

PS. I think I should note: Verizon doesn't seem to allow MVNOs on its network. Sprint does (Boost, Virgin), as does T-Mobile (SimpleMobile, Family Mobile). AT&T seems to, but there seems to be a catch there as none of the MVNOs are able to undercut AT&T on price.

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