From: Mike Godwin <mnemonic@eff.org>
Date: Thu, 11 Nov 93 09:34:11 PST
To: pmetzger@lehman.com
Subject: Re: Should we oppose the Data Superhighway/NII?
In-Reply-To: <9311111622.AA28106@snark.lehman.com>
Message-ID: <199311111733.AA04581@eff.org>
MIME-Version: 1.0
Content-Type: text/plain


 
Perry writes:

> However, its not like strip mining. So long as regulations are in
> place, the market is not functioning in a maximally efficient manner,
> and further distortions are occuring.
 
It's like strip mining in this sense: stopping the intervention doesn't
restore the healthy previous condition automatically. Merely ending
regulation doesn't make the distortions go away.

> I understand the impulse to use metaphors like strip-mining, but
> metaphors are a way of explaining theory, not a way to reason.

Just so. If you really believe that merely stopping regulation, *without
anything else*, would restore competition to a market that's been
dominated by a government-supported monopoly or duopoly, then we simply
must agree to disagree.

> Concretely observed, there is no obstacle to the sort of national
> network we want other than the government.

Untrue. The cable providers often are putting up obstacles of their own, as
are telco providers. The impossibility of Tim May's X-rated cable channel
illustrates this point. The market can't function--Tim and those like him
who want a certain type and variety of programming--unless there is access
to the information infrastructure. Telling every would-be X-rated cable
viewer to build his own cable system is not a solution.

According to standard free-market theory, the existence of demand
(Tim and friends) for an affordable product ought to stimulate a supplier
for that product. But that will never happen if all we do is say to the
cable and telco providers "Well, we've given you these markets and allows
you to profit enormously and to have absolute ability to use nonmarket
mechanisms to squash any hint of serious competition, and now we're going
to just dust off our hands and walk away."


--Mike