last mile, regulatory incentives, etc (was: att fiber, et al)

Thu Mar 22 20:48:14 UTC 2012

On Mar 22, 2012, at 10:17 AM, Jared Mauch wrote:

> 
> On Mar 22, 2012, at 1:12 PM, chris wrote:
> 
>> Why is it that the big companies are controlling what happens? 
> 
> They have used the past decades or century to establish these assets.
> 
> - Jared

1. Do not mistake a large telco for a communications company or an entity that considers itself in the communications business. They are not and do not. They are very large law firms and lobbying organizations that happen to have significant telecommunications infrastructure. One of the key differentiators of the internet is that it is not dominated as a battleground for lawyers and diplomats, but, rather is worked out between cooperating and competing entities as a (relatively) unregulated business transaction.

2. Because companies are allowed to own infrastructure and sell services over that infrastructure and in many cases without being required to make that (subsidized) infrastructure available to other services providers.

3. Because it is very expensive to build out the infrastructure to a given area and the maximum revenue potential from it is limited to a value unlikely to support 2x or more the infrastructure build-out cost, thus resulting in a sort of natural monopoly because it is cost effective to build out if you have a reasonable chance of capturing ~100% of the revenue, but, much less so if you are faced with the possibility of capturing 50% or less of the revenue.[1]

Owen

[1] Comparing across topologies is not as valid as the carriers would like you to believe. While the end services being offered share significant similarities in a converged digital world, they still retain unique properties that make certain things more optimal for different purposes. Consider the number of places in the US that have more than one cable provider or more than one DSL provider or more than one PON provider. These are few and far between and usually only reflect the very densest population centers.