So I am movie and I currently have Comcast for my internet. The town I’m moving to (15 miles away) only has CenturyLink as a choice. I hate CL but Comcast apparently is not allowed in that area. I remember these sort of local monopolies were huge during the growth of cable in the 1970s and 1980s.
How is this legal? How do they still permit cities with no choices in telecommunications?
Lobbyists.
At a company where I once worked, where we had a rather large in-house network, one of the computer engineers once remarked to me that, just for a lark, he had networked some computers through a chain of paper clips just to see if it worked – and it did!
Perhaps you can find some useful ideas in this. You might need a whole lot of paper clips.
Personally, I would love to live in an area where Comcast wasn’t allowed.
I live in an area where Comcast either bought up or drove out all of the competition. Now I’m stuck with Comcast’s ever increasing costs, removing a lot of good content from the TV lineup to try to force us to buy more packages, decreased reliability, choked bandwidth, and exceptionally poor customer service.
If I had another choice I would switch to them in a heartbeat.
Around here we have one cable company and one phone company that provide broadband service. They’re legal because the local government has the right to regulate who can hang their wires on utility poles.
Meanwhile, out in a rural part of this same county, no one offered broadband (or even cable) service because the population is so small and the terrain so bad that they estimated it would cost something likle $10K per house to run lines. A wireless provider offered to come in, but it wanted to build a series of 16-story tall towers on the tops of hills, and the people who already had service went to court complaining that their scenic views would be destroyed.
You could be doing a lot worse than CenturyLink
In my small Southeastern NH town, we have Comcast, which provides TV & Internet. They can not provide phone because…
We have Granite State Telephone, which provides phone and internet, but not TV.
GST is a protected monopoly because they are “too small,” and competition from a big company would be unfair. I’m not sure why a large company that has a monopoly formed by offering products that people want/buy is bad (I know that many are monopoly by acquisition, but they originally grew by selling what the consumer wanted.), but a small company with a monopoly based on ‘you must take what we sell,’ is good.
As a result, I have no choice but to have multiple vendors, rather than a single vendor with lower rates.
My family has had Qwest/CenturyLink for several years and never had any major problems. On the few times that I’ve needed to call support, they’ve been very helpful.
By the way, my condolences on being a movie. I hope you get better soon.
Where are all the people who claim to be free marketers?
You might want to see if it’s just Comcast that isn’t allowed there or if it’s ‘any carrier that competes with century link’. There’s a subtle legal difference ‘between company xyz can’t do business here’ and ‘only company abc can do business here’.
The free market does very poorly at regulating industries that require significant upfront costs to get started in (i.e. anything that involves building out a large infrastructure).
Numerous cable companies started out here, and they all either failed or got swallowed up by Virgin Media which was the last man standing. It makes for a patchy network, with rather poor records.
I know that in Missouri, the local telephone companies protected their monopolies for decades by the simple trick of threatening to drop service to rural customers if service in urban areas were opened to competitors.
And in fairness to their threats, I haven’t seen the big companies beating the bushes to string cable in farm country.
I’ve never understood while cable companies are regulated as utilities. It sure seems like they are one. Why does one private company get to own an entire cable grid with no competitors while one private company is not allowed to own an entire water-delivery, electrical, or natural gas system with no competitors?
Seriously. Why? Why do consumers just sit there and allow that to happen to them? You wouldn’t let a private water company monopoly butt-fuck you with every rising prices…
A key metric in any service where customers are connected together by a network is the average distance between customers. The network can be wires, fiberoptic cable, water pipes, gas pipelines, whatever. The further apart the customers are, the more expensive the service is to provide, because the links connecting the customers to the network are longer, and cost more to install and maintain per customer.
Telecom companies that service rural areas are often in the position of having costs per customer three or more times as high as identical service in a dense urban area. But generally speaking, they can’t charge customers much more than their urban counterparts pay, customers won’t stand for it. The result is often poor service, the companies simply don’t make enough money to have the resources and manpower to provide a level of service quality equivalent to what urban customers can get. And competitors aren’t eager to enter a market where the existing provider is barely breaking even already.
If you live in a rural area with crappy service, keep in mind there is only so much the company can do for you without going bankrupt. And don’t even think about complaining your kid/cousin/buddy gets way better service when he lives in the middle of a major city, the two service environments simply aren’t comparable.
One thing I can suggest:** See if FiOS is available.** Because they’re Verizon, which is still sort of ‘grandfathered in’ as a phone company, they’re often granted access to areas already served by one monopolized cable company (they were in my town anyway). Plus all their services, TV, internet & phone, are superior to anyone else.
I’m not sure what you’re asking. Around here, my electric company is a privately-owned monopoly utility. As is the water company and the gas company. The only publicly owned utility we have here is the sewer system.
And, again, how many wires do you want hanging on a utility pole? How many gas companies do you want to give emminent domain so they can dig up your yard to lay a line to someone else’s home?
He (or she) said “regulated as utilities”, not “publicly owned”. And the reason that they need to be regulated as utilities is indeed (in part) because it is not practical or economic to have too many lines hanging from your utility poles, etc. This sort of business is a natural monopoly, i.e. it is highly inefficient to have a lot of such companies competing to provide the same service in the same area. If you do not have such competition, however, the famous “invisible hand” of capitalism cannot work to ensure efficient operation, good customer service, and to prevent price gouging. All that depends on there being competition. The only real solution, in such industries, is to allow local monopolies, but to rely on government regulation (rather than competition) to keep the companies honest and on their toes.
This is indeed how the cable industry (mostly) works in the United States, but it has not worked well (leaving American broadband prices high, and speeds and customer service levels low, compared to most of the rest of the first world) because the amount of monopoly allowed is too high, and the regulation is too lax.
Tighter regulation might be enough, but you could also introduce more competition into the system if a regulatory regime were established whereby the actual cables connecting to people’s homes were owned by a separate company from those providing TV channels and internet services. The company providing the actual cables would be a tightly regulated monopoly, while the ISP and content providers wold compete freely, thus gaining teh benefit (for consumers) of a free market.
The reason why something like this does not happen in America is, as has been noted, “lobbyists”. That is to say, the corporations who are doing well out of their quasi-monopolies by providing lousy service at high cost, have the politicians (or plenty enough of them) in their pockets.
The factual answer to this question: Claiming that all monopolies are due entirely to governmental regulation (“regulatory capture” is the usual mantra, whether or not it actually applies in any given scenario) and that in a pure true free market, they would never occur. After all, true Mises-Rothbard lassiez faire capitalism cannot fail, it can only be failed by [del]left-revisionists[/del] people who deviate from the true scientific economic theory.
To see how this is refuted in reality, see njtt’s post about natural monopolies and consider how much it would cost to have three different cable companies all laying their own cable on their own utility right-of-ways (or whatever the legal right to dig a trench in the ground to lay a cable is called).