[e2e] It's all my fault

Ted Faber faber at ISI.EDU
Thu May 17 09:45:17 PDT 2007

On Wed, May 16, 2007 at 07:33:03PM -0700, Vadim Antonov wrote:
> The real role of the government in the history of the Internet was
> stalling, obfuscating, and supporting monopolism.  If not for the
> government-propped monopoly of AT&T, we'd see widely available commercial
> data networks in early 80s, not in 90s - the technology was there.

Governments do not support natural monopolies like the telecom network,
because they have no role in those monopolies.  Significant economies of
scale and high capital barriers to entry will shut other providers of
similar services out of the market completely.  Even without aggressive
action by the providers, this leads directly to monopoly.  That's a
property of the market, not a government imposed attribute.

Furthermore, all recorded cases of natural monopoly have evidenced
aggressive action; providers in natural monopoly situations crush
competitors and resist changes to their market.

Why would they do differently?

If US telecom were really deregulated tomorrow - no requirements to
share infrastructure, no limits on size, no service requirements -
there'd be one phone company in a decade at the most.   It's hard to see
how you can characterize this as monopoly protection.

You couldn't lease a T1 before the government made AT&T lease you one -
an action I'm surprised you don't characterize as the government
stealing AT&T's capital.  It's a lot more difficult to build a
nationwide (to say nothing of worldwide) data network if you have to
spend the capital to run the lines.

Without the government(s) acting in direct conflict with monopoly interests
by forcing access to the infrastructure and financing the development
of the technology there would be no commercial Internet today.  There
might be one in decades, but it would cost more and be more constrained,

Now, I don't think that the government had a coordinated plan to create
a new market, but without the (accidental) confluence of those actions,
the Internet would be unlikely to emerge.

Ted Faber
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