The FCC is planning new net neutrality rules. And they could enshrine pay-for-play. - The Washington Post

Fri Apr 25 04:01:52 UTC 2014

On Fri, Apr 25, 2014 at 12:44 AM, Patrick W. Gilmore <patrick at ianai.net>wrote:

> On Apr 24, 2014, at 23:38 , Larry Sheldon <LarrySheldon at cox.net> wrote:
> >
> > Regulating monopolies protects monopolies from competition.
> >
> > Monopolies can not persist without regulation.
>
> You are confused.
>

I think Mr. Sheldon is pointing out this:
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The biggest myth of all in this regard is the notion that telephone service
is a natural monopoly. Economists have taught generations of students that
telephone service is a "classic" example of market failure and that
government regulation in the "public interest" was necessary. But as Adam
D. Thierer recently proved, there is nothing at all "natural" about the
telephone monopoly enjoyed by AT&T for so many decades; it was purely a
creation of government intervention.

Once AT&T's initial patents expired in 1893, dozens of competitors sprung
up. "By the end of 1894 over 80 new independent competitors had already
grabbed 5 percent of total market share … after the turn of the century,
over 3,000 competitors existed.[55] <http://mises.org/daily/5266/#note55> In
some states there were over 200 telephone companies operating
simultaneously. By 1907, AT&T's competitors had captured 51 percent of the
telephone market and prices were being driven sharply down by the
competition. Moreover, there was no evidence of economies of scale, and
entry barriers were obviously almost nonexistent, contrary to the standard
account of the theory of natural monopoly as applied to the telephone
industry.
(...)
The theory of natural monopoly is an economic fiction. No such thing as a
"natural" monopoly has ever existed. The history of the so-called public
utility concept is that the late 19th and early 20th century "utilities"
competed vigorously and, like all other industries, they did not like
competition. They first secured government-sanctioned monopolies, and
*then,* with the help of a few influential economists, constructed an *ex*
*post* rationalization for their monopoly power.
--xx--
The Myth of Natural Monopoly
http://mises.org/daily/5266/