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quokka | 12 years ago
He isn't saying that the "free market" will fix things by itself. He observes that there isn't a free market in providing internet access because the incumbents control things like telephone poles (to hang optical cable on) and municipalities are so addicted to the kickbacks they get from cable franchisees that they won't let anyone else in. The magic of the invisible hand only works if there is actual competition. Those supply and demand curve charts only describe reality if there aren't monopolists.
His claim is that if the FCC mandated right of way to anyone wanting to hook homes up then a company like Google would already be serving many more homes as incumbents wouldn't be able to block them as AT&T is doing in Austin.
This is true, but I'm not convinced that it is the right way to get proper competition here. Is the solution really to have 5 companies each run optical fiber down a street? Better would be for one company to run super-fast tubes, and then sell the bandwidth in bulk to ISPs. Maybe that is the business model that would emerge, but maybe not.
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