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

Fri Apr 25 04:09:36 UTC 2014

On Apr 25, 2014, at 00:01 , Everton Marques <everton.marques at gmail.com> wrote:
> 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:

That's nice.

A bit disingenuous, but nice.

To be clear, I have no idea if AT&T was a natural monopoly in the 1890s or not. But the idea that there can be no "natural monopoly" is ludicrous, unless you distort the definition so far out of shape is doesn't resemble anything except a complex syllogism in a textbook. Here in the real world, sometimes there is very clearly an overwhelming preference for a single company / provider / etc. to own a market segment. Pointing out the laws of physics do not prohibit competition does not mean there will be competition.

But we can agree to disagree. :)

-- 
TTFN,
patrick

> --xx--
> 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/

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