> Do I get equal access to the existing infrastructure (presumably paid for by the existing monopoly)?
No, the existing company retains ownership of the infrastructure they paid for and the ability to charge anyone whatever the heck they want for using it. Also, they retain all rights granted in private contracts (not involving government at the federal, state, or municipal level).
> Second, who am i? A startup [with new, cheaper tech]? Google? Another telco?
You get to pick, subject to three constraints:
* Your source of capital is rational (they'll replace you or refuse to fund you if you're acting against their monetary interests)
* Your source of capital is limited (or, rather, their trust in you is limited). Enough to cover a town, but not a city.
* Your competitive advantage isn't disruptive (for the sake of arbitrary concreteness, your up-front and continuing costs are 80% of what they are/were for the competition)
> My overarching answer is simply: I don't know, but let's get rid of the artificial constraints on the market and see what results.
That's what I was afraid of. The "game" we're playing is going to pit my knowledge of anticompetitive market practices against your ingenuity. My thesis is that the anticompetitive opportunities offered by the market will be enough to stymie innovation all on their own, unless the government takes an active role in leveling the playing field.
> In most unregulated industries, quality rises and price falls
Yes, but it works better for some industries than for others, and the industries where it has a track record of failing miserably (utilities, basic research, health care) require government intervention if we want a functional society. Adam Smith himself didn't believe that the market was suited to the task of optimizing infrastructure or military/police forces (he didn't think said list was in any way complete, either). Perverse incentives, externalities, anticompetitive opportunities, information asymmetries, and pathological nash equilibria (prisoner's dilemma) all frustrate the ability of markets to optimize society. Medicine is probably the worst rat's nest of such complications, but let's keep the focus on utilities for brevity.
> which industries do you see this not happening: 1. Finance 2. Medicine 3. Utilities 4. ?
You can't use these observations to support your point over mine because they also fit my model of reality (government must be more involved with industries that stymie the free market's optimization abilities). Also, health care in the US is ~2x as expensive as in "socialist" single-payer systems, so I find your choice of who to blame less than convincing. The ACA is the plan proposed by market reformists -- not even the Heritage Foundation thinks deregulation is the way forward on that front.
I was in the middle of writing a long-winded reply, but I'd rather just agree to disagree on philosophy and economics. I'm also not the right person to come up with the winning business plan to your scenario (little knowledge of the ISP market other than as a consumer).
And ultimately I probably agree with you about how to deal with the situation right now, in that we shouldn't lose net neutrality when the ISPs are clearly public/private partnerships, not independently operating entities in a free market.
Where we disagree is whether or not it is possible to create the conditions for a truly competitive market primarily by reducing state involvement. I believe it is.
In my opinion, fears of private monopolies are generally unwarranted, that most "natural" private monopolies are flimsy and temporary. I fear more the monopolies created by the government, such as the monopoly that "licensed" physicians hold over what substances we put in our body, who gets to sell us information about our own DNA, who gets to invest in startups ("accredited" investors) etc.
In the long run, I think our freedom is better protected by fighting against artificial monopolies such as these ..
> I'd rather just agree to disagree on philosophy and economics.
I'm sure you would. I'm armed with a long list of time-honored principles that allow a big player to anti-competitively grind a small player into the ground long before any real competition can take place.
You are armed with your faith in the market.
> Where we disagree is whether or not it is possible to create the conditions for a truly competitive market primarily by reducing state involvement. I believe it is.
You hit the nail on the head: I believe that there are a handful of important markets where the "more freedom!" approach not only doesn't lead to optimization, but leads to counter-optimization.
I take international comparisons of health care costs/efficacy as my evidence.
> In my opinion, fears of private monopolies are generally unwarranted, that most "natural" private monopolies are flimsy and temporary.
If only I could force reality to comply with your opinion, I would be a much happier person.
> I fear more the monopolies created by the government, such as the monopoly that "licensed" physicians hold
I fear a "free" health care market more than I fear a single-player "govrnment monopoly."
I also object to the use of the term "monopoly" in relationship to the government. Market monopolies have direct incentive to screw you for whatever they can, and they get to keep the spoils. The government has checks and balances that frustrate the process, and the people involved get to keep a far smaller fraction of the spoils. Market monopolies are worse.
It's also worth adding that the "dumb pipe" model of utility regulation was the one adopted (rather successfully) by Margaret flipping Thatcher when she privatised the UK utilities.
No, the existing company retains ownership of the infrastructure they paid for and the ability to charge anyone whatever the heck they want for using it. Also, they retain all rights granted in private contracts (not involving government at the federal, state, or municipal level).
> Second, who am i? A startup [with new, cheaper tech]? Google? Another telco?
You get to pick, subject to three constraints:
* Your source of capital is rational (they'll replace you or refuse to fund you if you're acting against their monetary interests)
* Your source of capital is limited (or, rather, their trust in you is limited). Enough to cover a town, but not a city.
* Your competitive advantage isn't disruptive (for the sake of arbitrary concreteness, your up-front and continuing costs are 80% of what they are/were for the competition)
> My overarching answer is simply: I don't know, but let's get rid of the artificial constraints on the market and see what results.
That's what I was afraid of. The "game" we're playing is going to pit my knowledge of anticompetitive market practices against your ingenuity. My thesis is that the anticompetitive opportunities offered by the market will be enough to stymie innovation all on their own, unless the government takes an active role in leveling the playing field.
> In most unregulated industries, quality rises and price falls
Yes, but it works better for some industries than for others, and the industries where it has a track record of failing miserably (utilities, basic research, health care) require government intervention if we want a functional society. Adam Smith himself didn't believe that the market was suited to the task of optimizing infrastructure or military/police forces (he didn't think said list was in any way complete, either). Perverse incentives, externalities, anticompetitive opportunities, information asymmetries, and pathological nash equilibria (prisoner's dilemma) all frustrate the ability of markets to optimize society. Medicine is probably the worst rat's nest of such complications, but let's keep the focus on utilities for brevity.
> which industries do you see this not happening: 1. Finance 2. Medicine 3. Utilities 4. ?
You can't use these observations to support your point over mine because they also fit my model of reality (government must be more involved with industries that stymie the free market's optimization abilities). Also, health care in the US is ~2x as expensive as in "socialist" single-payer systems, so I find your choice of who to blame less than convincing. The ACA is the plan proposed by market reformists -- not even the Heritage Foundation thinks deregulation is the way forward on that front.