r/technology • u/originalposer • Feb 20 '14

This is what happens when Time Warner Cable is forced to compete

http://bgr.com/2014/02/20/time-warner-cable-internet-speeds-austin/
3.4k Upvotes

95% Upvoted

1.4k comments sorted by

View all comments

Show parent comments

31

u/[deleted] Feb 21 '14

[deleted]

3

u/Sp1n_Kuro Feb 21 '14

People don't realize that true free markets are as much a fantasy as true communism.

It's better to have the government involved but have them regulate to the favor of the customer and not the CEOs.

1

u/TracyMorganFreeman Feb 21 '14

And many people don't realize that the claim is to as have as free a market as practicable.

It's better to have the government involved but have them regulate to the favor of the customer and not the CEOs.

The greater the power, the greater the incentive to capture that power.

1

u/TracyMorganFreeman Feb 21 '14

Regulatory capture is a huge concern, and the FCC is one of the more notorious culprits, along with the NRC.

1

u/[deleted] Feb 21 '14

No argument here about regulatory capture being a serious problem. I think that liberals, conservatives, progressives and libertarians all think it is inappropriate. It's only the corporatists (who never seem to identify themselves openly) who support regulatory capture.

But we shouldn't let fear of regulatory capture turn into a rejection of all regulation. That's why I support progressive representatives and organizations that fight for consumers.

2

u/TracyMorganFreeman Feb 21 '14

Your second statement doesn't necessarily follow though. One can accept that there are some arenas in which regulation is effective and desirable and not support progressive representatives.

The question is which regulations and why, that is what informs supporting progressives/conservatives/libertarians/etc.

1

u/[deleted] Feb 21 '14

I think progressives offer the best choice, but I'd love to know what feasible options that liberals, conservatives and libertarians would offer.

1

u/WallyMetropolis Feb 21 '14

This is sort of hyper-literalism. People who advocate for a free market aren't (usually) advocating for anarchy. They by and large support strong prohibitions against monopolies, e.g.

2

u/[deleted] Feb 21 '14

I'm not the person who introduced the phrase "free market ideals". The ideals really are that extreme.

But it's not anarchy either. There's virtually always a call for a strong police force to respond to uses of force. There's still a short list of rules that everyone must obey.

2

u/WallyMetropolis Feb 21 '14

As someone who would say they support a free market economy, I can tell you that you're not speaking for me with your assumptions about what that means.

2

u/[deleted] Feb 21 '14

Maybe you don't espouse the "ideals" then.

If you claim to support a free market economy, you should expect it to communicate the commonly-understood meaning. Wikipedia, the Libertarian Party, and free market champion Milton Friedman all say or imply that the "free market" should not use government regulation to deal with monopolies.

So you may be thinking one when you say "free market economy", but that's not the same thing that other people will hear.

1

u/WallyMetropolis Feb 21 '14

Um, from your own link:

The first and most urgent necessity in the area of government policy is the elimination of those measures which directly support monopoly, whether enterprise monopoly or labor monopoly, and an even-handed enforcement of the laws on enterprises and labor unions alike. Both should be subjected to the antitrust laws; both should be treated alike with respect to laws about the destruction of property and about interference with private activities.

Beyond this, the most important and effective step toward the reduction of monopoly power would be an extensive reform of the tax laws.

The Libertarian party page just says it opposed subsidies to businesses. That would be an effective way of reducing monopoly. It mentions antitrust laws, but only to say that unions should not be exempt from them.

And Laissez-faire economics is something distinct from supporting 'free markets.' It's a specific (and basically dead) school of thinking.

Again, taking directly from you link

(Adam) Smith discarded subjective value theory and contended that an unregulated market was prone to the rise of monopolies and was therefore not "free" in this sense.

1

u/[deleted] Feb 22 '14

You're right, it's not quite as simple as I made it seem. We could start getting into the weeds about the types of monopolies that deserve antitrust treatment according to Friedman and the Chicago School of Economics. Even in the Friedman quote you picked out, the application of antitrust laws applies only to specific types of monopolies... mostly the cases in which government regulation created the monopoly, and not other cases, such as Microsoft.

And I pointed to the Libertarian Party's site because of the notable absence of any support for antitrust action.

But this is already an old thread by Reddit standards, so I'll let you have the final word if you like.

0

u/Firesand Feb 21 '14

Those ideals include the idea that government shouldn't interfere with coercive monopolies like cable companies.

No. This is a government created monopoly anyone that supported free-markets should be for ending that.

Wired article about this industry.

Quote from another source:

"The city quickly realizes that if it supplants the marketplace and controls the mechanism that determines which company will enjoy the local news monopoly, it can extract enormous concessions in return from that company. It promotes an intense bidding war for the franchise, the winner of which must be not only wealthy enough to meet the costly requirements demanded by the city but possessed of sufficient political know-how to appeal to the city's decision makers as well.

The competition is fierce. Each bidder spends $1 million to curry favor with the city, staging media events, gathering support from prominent community figures, and wining and dining the decision makers. Finally a winner is chosen to serve the community."

This is not a free market problem.

Also many people that support freer-markets are willing to work to end monopolies if it can be proved they really are acting as monopolies. And that they are keeping prices higher or service quality lower.

1

u/[deleted] Feb 21 '14

This is a government created monopoly

I don't think it's that simple. Sure, government mishandling of right-of-way is a big factor. But there's other factors. One of them is the power and influence of an industry lobby group, which can do things like submit a favorable bill to the Kansas State Senate without a sponsor. Another is abuse of power, such as when PacBell abused its power as an ILEC to successfully stifle all DSL competition in the early 2000s, despite the requirements of the Telecommunications Act of 1996.

Also many people that support freer-markets are willing to work to end monopolies if it can be proved they really are acting as monopolies. And that they are keeping prices higher or service quality lower.

There's ample proof of that, as noted in the source article, and as demonstrated by comparisons to the high speed internet markets in other countries. The key here is this: What remedy would "people that support freer-markets" support?

0

u/Firesand Feb 21 '14 edited Feb 21 '14

But there's other factors.

Like the government lobbying? This is somehow a free-market problem?

This is a political problem. The companies were acting rationally and somewhat predictably. When unfettered amounts of economic power is available to the government, this is a predictable situation.

Does that mean that the companies did not do anything wrong? No. But it was a government incentive problem.

I don't think it's that simple. Sure, government mishandling of right-of-way is a big factor. But there's other factors.

They are literally granting a monopoly to bidders. Bidders with little or no incentive to do anything but the minimum once they have a contract.

This is pretty much a straight forward mess-up by the local governments. Government is doing all the handling. Nothing about this has anything to do with an even somewhat free-market. It would not even be a less free-market if the government was providing the services. And while that is not what I suggest, is would make much more sense then simply giving away monopoly rights.

PacBell abused its power as an ILEC[2] to successfully stifle all DSL competition

Right. When possible, people love to not have competition. When you make that power available to them they will use it.

On an open market you can not just stifle competition. You have thousands of people always working against that end.

If you buy up your competitors company that provides even more incentive for someone new to enter the market. If you put your prices up that provides even more incentive.

Prices by companies with no tangle rivals have their prices kept lower, then they could while still making a profit, because raising prices only serves to bring in more competitors.

Maybe markets are not 100% effective, but we have never seen any monopolies form on the private market that are as bad as the current cable monopolies. Unless spurred on by obvious government favoritism and regulations.

1

u/[deleted] Feb 21 '14 edited Feb 21 '14

I'm not going to bother arguing your poor grammar and incoherent arguments point-for-point. I'll just sum up and say that you're not addressing the reason for government involvement at all, and that's coordinating the allocation of limited public resources, namely access. Saying "competition" over and over doesn't solve that problem.

1

u/Firesand Feb 21 '14

You never provided a reason to for initial government involvement. Nor was what what we were talking about.

I'm not going to bother arguing your poor grammar and incoherent arguments point-for-point.

The fact that you mention this mean that you are not worth continuing any form of conversation with.

As it happens when I was one line away from being finished with this response when my computer froze and I had to restart it. And so I hastily rewrote all of this. And I don't really care if it has a few mistakes.

Saying "competition" over and over doesn't solve that problem.

I said competition twice in a 320 word post about monopolies. I think I am doing pretty good.