SCOTUS Rules Incumbent Telcos Must Share Network Access At Cost 134
schwit1 writes with news, as reported by Bloomberg, which will likely have bearing on (like it or not) regulation of peering among Internet carriers: "Established local telephone companies including AT&T Inc. must share disputed parts of their networks with competitors at cost, the US Supreme Court ruled. The unanimous ruling backs the position taken by the Federal Communications Commission in a fight stemming from the 1996 law that injected competition into the local telephone business. The law requires so-called incumbent local carriers, whose ranks also include Verizon Communications Inc. and CenturyLink Inc., to share their facilities with rivals."
Cable too please! (Score:5, Insightful)
Enable competition and break the local monopolies of the cable companies. Expand this to include cable providers!
Re:Cable too please! (Score:5, Insightful)
You can't have a free market in a Natural Monopoly (roads, water, power), although you can get pretty close via deregulation.
I think you've got that backwards. If you have a natural monopoly, then without regulation it will remain a natural monopoly. That's the essential definition of the term. Government has to add regulations in order to encourage competition and eliminate the monopoly. The moment the situation is de-regulated, it reverts back to a monopoly.
Re:Good overall, however I question "cost-based" (Score:2, Insightful)
Yes, they do look silly.
A business has more interest than just the hardware and infrastructure. They is also support, customer service, national availability, etc... There are many ways in which Verizon could remain the better option for a company to pick, they just don't get to be the only option.
If your analysis was correct, Verizon wouldn't be able to compete and would be losing massive amounts of money and be fighting for survival. Seeing as the are instead making huge profits, something pretty much has to be wrong with your arguments.
Re:Good overall, however I question "cost-based" (Score:5, Insightful)
She was forced to compete against other companies reselling Verizon's own hardware/infrastructure cheaper than Verizon could because Verizon had more overhead as a larger company.
The problem with this argument is that overhead tends to shrink as companies grow in size as a percentage of net income. This is why Walmart has cheaper prices than Joe's General Store. Walmart's overhead, as a percentage, is far lower than Joe's.
To say that Verizon has more overhead than third parties is completely misleading. Third party overhead, as a percentage, was far more expensive on a per-service basis. True, Verizon may have had higher percentage overhead on advertising, but that is also part of their ability to out-compete a third party, even if a third party is at a lower cost. Verizon also has a much more well staffed service center. But this is a completely different "service" they can offer, but a third party could not. If a third party tried to compete with a support service center, their percentage of overhead would have been outrageously higher than Verizon.
Verizon nor AT&T are not "screwed" by selling their lines at cost any more than Walmart is screwed by Joe for selling the exact same products. Joe's overhead, as a percentage, and confined to "services" he offers is costlier. And second, Walmart can offer more "services" (more lanes, more selection, more locations, etc) than Joe ever could, and should Joe try to compete in those services, his costs will be a higher percentage than Walmart.
This makes complete economic sense, where-as your post does not. Because, if you were right, it would make no sense for Verizon or AT&T to want to purchase other providers or grow in any way. If it is more economically burdening to grow, then they would fight tooth and nail not to grow. Walmart and Costco wouldn't exist, nor would national brands. In fact, even the general store probably wouldn't exist in such a system.
But that's simply not how the economics work. While your libertarian leaning ideals may be well placed, your economic reasoning for them falls apart. Because, in fact, as a percentage, Verizon can sell its own services cheaper than a third party (at cost), because nowhere in the equation are they getting a free ride.
Re:Good overall, however I question "cost-based" (Score:5, Insightful)