re: Let’s get this clear once and for all: the internet is NOT a utility

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Talk about failing on a post quick

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How many times will this have to be explained to you? 50% of Americans have only 1 option for definition high speed broadband.

For a market to be considered perfectly competitive it has to satisfy a number of principles:

- A large number of buyers and sellers

- Perfect information - the market does not have notable issues of information asymmetry.

- Homogeneous products - the products are perfect substitutes for each other

- low barriers to entry or exit

- Every participant is a price taker – No participant with market power to set prices

- Anti-competitive regulation - It is assumed that a market of perfect competition shall provide the regulations and protections implicit in the control of and elimination of anti-competitive activity in the market place.


Now, very few markets perfectly exhibit those traits, but a lot of them come very close. That is not the case for ISP's in the vast majority of markets in this country.

In the vast majority of markets there are not any perfect substitutes to your regional ISP/cable company. For many, if you want definition high speed broadband there is only one game in town. On top of that, the industry enjoys enormous amounts of regulatory capture at the state, local, and as of this year, the federal level. The barriers to entry are incredibly high. Often the necessary infrastructure costs to be a true competitor will run you into the 100's of millions of dollars on top of expensive ongoing operating expenses. That to break even requires a large marketshare, which often is not economically viable in smaller communities. The infrastructure being built requires use of shared resources and creates issues of redundancy, a highly inefficient use of scarce resources. The imperfect substitutes that exist, like cell phones(just hope Verizon doesn't try and block you from tethering again), satellite internet, or DSL are often not available to all households and when they are are not adequate substitutes. Where they cost was more for speed and data, often having hard caps that will get hit after only a short period of heavy use. So they do not provide any sort of mechanism that truly would turn the market leader into a price taker or shift their behavior. It is also a market space that often is propped up by taxpayers, through direct investment and subsidization, which alone categorically differentiates it from other goods and services.

All coming in the larger context of the increasingly vital function the internet serves its citizenry. From leisure activity, to job seeking and performance, to education, often from elementary school up through college. The internet is a vital human resource that has only grown in its necessity for American life. It is therefore more than reasonable that like electricity, water, sanitation, and gas, that the resource be treated accordingly.

Back to the market dynamics discussion, when you look at that total industry context, the economic term that best defines this sort of market in most places is best categorized as a:

natural monopoly. is a monopoly in an industry in which high infrastructural costs and other barriers to entry relative to the size of the market give the largest supplier in an industry, often the first supplier in a market, an overwhelming advantage over potential competitors.

Which is exactly what we see in the vast majority of markets for current high speed land access internet. Some larger cities have been able to maintain one or two additional direct substitutes, but often the market is still not perfectly competitive and falls more in line with oligopoly traits. For a majority of the citizenry though they live with a defacto natural monopoly arrangement for an increasingly inelastic good.

It continues to be the height of intellectual dishonesty to, in the face of that context, continue pretending like the ISP space is no different from the market for 10 dollar widgets. When it is by any rational observation a much different market space. That requires a different economic calculus when thinking how to or not regulate it.

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Go on.

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Olddawg26

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I tend to agree - based on trends back to 1982 (1G), we get a new generation every 9 to 10 years (or so). So, 2020 to 2022, we should have 5g - with boosters/repeaters, that's going to satisfy virtually all internet demand short of highly dense streams, which will be fiber almost certainly. Now, 8k video may challenge that, but honestly, picture density will just be a prestige thing - there is minimal improvement from HD to 4K outside of color depth and a handful of situation. 4k to 8k is going to largely be highly, highly incremental. And it only double the demand over 4k - with wireless expanding 10-fold with most generations, that should just about do it.

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For the rest of the country, Internet is certainly a utility.

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YEAH BUT HIS NET WORTH IS REALLY HIGH!!1

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