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

Fri Apr 25 16:05:44 UTC 2014

I beg your indulgence..

On Apr 25, 2014, at 0:29, Larry Sheldon <LarrySheldon at cox.net> wrote:

> ...On 4/24/2014 11:01 PM, Everton Marques 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:
> 
> Thank you.
> ...
> [more comment below]
>> --xx--
> ...
> I don't know what got me to thinking about it earlier today but I recalled when I started at the telephone company in Los Angeles there was a pitch made early on that in earlier days a business in Los Angeles had to have several telephones on desks to be able to talk to all of their customers.
> 
> Which was true ONLY because regulation required that each telephone line terminate in an instrument owned by the providing company.
> 

The above statement contains an error that obscures the issue. As someone who also recalls this  state of affairs, I must point out that it was the respective telcos' "regulation" - not government regulation in any sense - that prohibited any equipment but their own from being attached to their lines. In other words, those telcos were behaving anti-competitively with all the power they could muster to do so (surprise!) and also doing whatever they could to obscure that fact. 

Regulation was demanded by consumers - in order to protect them from the ridiculous results of this assertion of privilege on the telcos' part. To Mr Sheldon, this resulted in regulation (by government) creating a monopoly. I believe Mr Gilmore might argue that well-crafted regulation requiring interconnectivity as a public good would have prevented both the "need" for monopoly-creating regulation and also would have protected the public from the inherent tendency toward monopoly as vendors do battle to protect their turf rather than provide the best possible outcome for their customers.

> Absent that one regulation, businesses would have invented multi-line instruments a lot earlier than was the case.

So THIS argument is completely off the mark. In fact, one could say a regulation was needed which would have forbade the telcos' anti-competitive behavior, and then the competitive marketplace could have played out further. Instead, what we got - partly to address some of the other concerns like interconnection - was a set of regulations that favored one (well-connected) vendor, leading to a monopoly.

So in some respects, each Mr Sheldon and Mr Gilmore are both right. No surprise there, either, as I have immense respect for both. I tend to lean towards Mr Gilmore's position, though, in that I personally hold that powerful vendors have a natural positive feedback tendency towards monopoly if they can attain it, and regulation that is wisely and truly customer-centered can prevent much damage; I side with Mr Sheldon only insofar as I observe that one tactic of a determined monopolist is to engage compliant regulators to more firmly ensconce them, and I believe that's a Bad Thing.

Blessings..

..Allen Kitchen, Old Guy