North American Network Operators Group

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Re: What do we mean when we say "competition?" (was: Re: [Latest draft of Internet regulation bill])

  • From: Marshall Eubanks
  • Date: Wed Nov 16 12:09:13 2005


On Nov 16, 2005, at 1:16 AM, Owen DeLong wrote:

--On November 15, 2005 8:14:38 PM -0800 David Schwartz <[email protected]> wrote:

--On November 15, 2005 6:28:21 AM -0800 David Barak
<[email protected]> wrote:

OK... Let me try this again... True competition requires
that it be PRACTICAL for multiple providers to enter the
market, including the creation of new providers to seize
opportunities being ignored by the existing ones.
The worse the existing provider it is, the more practical it is to
compete with them. If they are providing what people want at a reasonable
price, there is no need for competition. If they are not, then the it
becomes practical for multiple providers to enter the market. If you
assume that the cost to develop existing infrastructure is not insanely
less than the cost to develop new infrastructure, the isolation from
competition comes directly from the investment.

1.	The existing infrastructure is usually all that is needed for
	many of the services in question.  Laying parallel copper
	as a CLEC is not only prohibitively expensive, in most
	areas, it's actually illegal.  Usually, municipalities
	have granted franchise rights of access to right of
	way to particular companies on an exclusive basis.  That
	makes it pretty hard for a competitor to enter the market
	if they can't get wholesale access to the existing copper.

2.	The existing copper was actually deployed (at least in most
	of the united States) using public subsidies.  The taxpayers
	actually paid for the network.  The physical infrastructure
	should be the property of the people.  The ownership claim
	of the telephone companies is almost as baseless as the
	Verisign clame that they own the data in whois.

For example, if Bill Gates took a few billion dollars out of his pocket
and launched 80 satellites to provide wireless Internet access, it would
be damn hard to compete with him if he wasn't trying to recover those few
billion dollars. But if you spend a few billion, you get a few billion
worth. Anyone else can spend the same amount and get the same advantage.

3.	Except when you consider that there are only so many orbital
	slots that can be maintained.  (see 1 above as well).  If Bill
	manages to launch N satellites and N leaves N/2 orbital slots
	available for other uses, then, it's pretty hard to launch
	another N satellites at any cost.

I do not think that the ITU allocates orbital slots except for geostationary satellites (not even
24 hour inclined orbits, such as are so useful for satellite transmissions to cars). So, if you
want to launch a Teledesic or Iridium clone, you can, assuming your credit cards are good for a few billion $.

Frequency assignment is, of course, another matter.

If he already has the satellites and is providing the service other
people want at a low price, then other competitors will lose. But so what?
Consumers win. And competition doesn't exist to benefit the competitors.




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