Re: Deregulation increases costs? [cr-95/9/21]


Sender: LECLERC YVES <•••@••.•••>

The debate between several people about deregulation and monopolies is 
interesting, but flawed. Everyone seems to forget that monopolies are not 
*supernatural beings* but human artefacts, which you can use and discard, 
allow or forbid according to need.

Nearly every country in the world has had a telephone monopoly at some
point; a lot still do, for good reasons. These people are not all stupid,
or "communists", or ignorant. In the U.S. as elsewhere, the main advantage
of having a phone monopoly was to ensure creation of a fairly universal,
widespread network charging standard rates. Open competition is very poor
at providing this: it focuses on the large, profitable markets and
neglects the others (history of airline deregulation, cable TV). 

Obviously, there is a price in strict economic efficiency to pay for 
this. But there is also a lot to be gained either in other economic 
sectors that depend on good communications, or in non-economic domains 
(for instance, all emergency services).

Does this mean that the phone monopoly should be maintained forever? Not 
at all. It was needed at a certain phase in the development of telecom 
networks; if that phase is over, get rid of it. But it may not be over in 
every corner of the world, or even of a very large country like yours.

There is nothing that says that another government-regulated monopoly 
won't be needed in the future... and there's nothing that says it should 
be eternal. Just don't forget that monopolies, regulations and 
deregulations aren't tenets of faith, acts of god or natural meteors; they 
are human-made tools, to be used or gotten rid of as the need arises.

In the present case, while I'm no expert in the specific American
situation (I know more about Europe and the U.K.), IMHO the AT&T monopoly
served well for a time, overstayed its usefulness... and was disbanded in
a rather sloppy, abrupt way that caused serious problems for at least a
decade (drop in quality or excessive price rises in many areas, nightmares
for other countries' telecom industries, wild n'wooly computer
connections, etc.). 

Yves Leclerc          Dead-End Democracy? or open-ended government...
Montreal, Quebec

 Posted by --  Andrew Oram  --  •••@••.••• --  Cambridge, Mass., USA
                 Moderator:  CYBER-RIGHTS (CPSR)

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