Some truth about Comcast - WikiLeaks style

Owen DeLong owen at delong.com
Sun Dec 19 22:44:21 CST 2010


On Dec 19, 2010, at 6:12 PM, JC Dill wrote:

> On 19/12/10 5:48 PM, Richard A Steenbergen wrote:
>> On Sun, Dec 19, 2010 at 08:20:49PM -0500, Bryan Fields wrote:
>>> The government granting a monopoly is the problem, and more lame
>>> government regulation is not the solution.  Let everyone compete on a
>>> level playing field, not by allowing one company to buy a monopoly
>>> enforced by men with guns.
>> Running a wire to everyone's house is a natural monopoly. It just
>> doesn't make sense, financially or technically, to try and manage 50
>> different companies all trying to install 50 different wires into every
>> house just to have competition at the IP layer. It also wouldn't make
>> sense to have 5 different competing water companies trying to service
>> your house, etc.
> 
> This is the argument the government uses to keep first class mail service as an exclusive monopoly service for the USPS, claiming you wouldn't want 50 different mail carriers marching up and down your walk every day.  Yet we aren't seeing a big problem with package delivery.  Currently you have 3 choices, USPS, UPS, and FedEx.  The market can't support more than 3 or 4 package delivery services (e.g. we had 4 with DHL, which didn't survive the financial melt down).  Why not open up the market for telco wiring and just see what happens?  There might be 5 or perhaps even 10 players who try to enter the market, but there won't be 50 - it simply won't make financial sense for additional players to try to enter the market after a certain number of players are already in.  And there certainly won't be 50 all trying to service the same neighborhood.
> 
You can send letters just as well as packages via the other carriers.

The "USPS monopoly" on first class mail is absurd. In fact, FedEx, UPS,
et. al could offer a $0.44 letter product if they wanted to.

They could not call it mail. They could call it "first class document delivery."

However, the reality is that they probably couldn't sustain their business
at that price point.

The USPS doesn't have an actual monopoly so much as ownership of
the term Mail almost like a trademark. What they do have is an infrastructure
built at taxpayer expense that creates a very high barrier to entry for
competition at their price points.

> And if a competing water service thought they could do better than the incumbent, why not let them put in a competing water project?  If they think they can make money after the cost of the infrastructure, then they may be onto something.  We don't have to worry that too many would join in, the laws of diminishing returns would make it unprofitable for the nth company to build out the infrastructure to enter the market.
> 
The point is that the cost of the infrastructure usually exceeds what you can
recoup if you only have part of the population in a given area as your
customers, thus, creating natural monopolies.

Owen





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