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Date:      Wed, 17 Nov 1999 03:14:23 +0000 (GMT)
From:      Terry Lambert <tlambert@primenet.com>
To:        davids@webmaster.com (David Schwartz)
Cc:        dscheidt@enteract.com, jcm@dogma.freebsd-uk.eu.org, erickw@taurus.oursc.k12.ar.us, freebsd-chat@FreeBSD.ORG
Subject:   Re: Judge: "Gates Was Main Culprit"
Message-ID:  <199911170314.UAA06918@usr08.primenet.com>
In-Reply-To: <000001bf308e$b39f8b10$021d85d1@youwant.to> from "David Schwartz" at Nov 16, 99 04:00:04 pm

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> > Sure.  POTS.  No monopoly telephone company has an incentive to
> > install anything better.  It is only when telephone companies
> > face competition that they make alternatives available.  Bell
> > Atlantic would charge me several hundred dolalrs a month for
> > ISDN, and has no plans to offer any sort of high speed data
> > services in this area.  Other places -- with much the same
> > population density -- which have competititon from other
> > telecos, or from cable companies, have lower ISDN prices, and
> > BA are rolling out xDSL in these areas.
> 
> Yes, I agree. The government can lock us into an inferior standard
> for much longer than the market would normally allow.


The main gating factors in telephone technology deployment at this
time are (A) equipment amortization over long (technology-wise)
periods, generally up to 20 years, and (B) subsidized flat rate
local telephone service, as mandated by the PUC (Public Utilities
Commission) tarrifs, and FCC (Federal Communication Commission)
regulation or telephone availability, combine with local laws
(e.g. so-called "lifeline" laws).

Would I want to pay metered rates for my phone service, as they
do in Europe?  No, actually, I rather that all service be flat
rate based on pipe size, and that the telephone companies have
no way of knowing whether my packetized voice data is being
delivered next door or halfway around the world.

These companies compete in the markets which are most lucrative;
if you diddn't have differential markets (telephone companies,
even local ones, are regulated monopolies because of their
ownership of the wiring infrastructure), you wouldn't have
inequity between markets.

One way of dealing with this would be the same answer used to
unify all phone companies under Western Electric, or similarly
to nationalize the American Interstate Highway system, but it
would probably take another cold war to accomplish it.  You
declare government ownership of the infrastructure for reasons
of national security, and then you either contract maintenance
out to the company that used to own the most of it, or you
put maintenance up to bid.

You can be damn sure that if your cable plant came up for lease
every two years, it would be maintained in such a way as to make
at least 51% of the voting population happy with how it was
being maintained.


> As I said, it's expensive to stay on the trailing edge of
> technology. If you choose to get the advantages of it, you
> have to bear the burdens of it.  Nobody else is going to
> subsidize your choice by keeping compatability that has a
> greater cost than benefit for the majority of consumers.

It's expensive to be behind your competitor, but you are
ignoring the elasticity function that comes with having
captured the lions share of the market.  This only becomes
a problem when you get enough of the marjet that you gain
the ability to wield monopolistic power (the Microsoft
suit is not about monopoly, it's about monopolistic power;
obviously they aren't).


					Terry Lambert
					terry@lambert.org
---
Any opinions in this posting are my own and not those of my present
or previous employers.


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