I am a long time telecom employee. I get paid a pretty good salary by Verizon to not work there, and I never did - I retired from NY Telephone in 1995, just before it officially ceased to exist.
As a telecom technical trainer and generally curious person, the history of telecom has always interested me, and as such I can site numerous examples of just the sort of thing that EconDoc states below.
There are some great pictures of NY City that people use to show what things were like in the horse and buggy days, and I like to use them because they show one of the dangers of not having that "natural monopoly." Hidden carefully, in plain sight, in those pictures, are wires running up and down both sides of the streets, from poles that look more like tall ship masts (and were constructed in the same manner BTW) with drop wires running from them to buildings on each side of the street, making the whole thing look like a monstrous spider web constructed by a very intoxicated spider.
It wasn't uncommon for one company to rent space on another's poles, including splicing another pole on top of the first, and it was equally common for employees of one company to sabotage the others plant, even up to cutting down poles that were blocking "right of way" and occsionally line gangs had street fights that resembled the best of the "Five Corners" battles in NY City.
The city of Auburn NY is still, or was when NY Telephone existed, divided right down the middle by two phone comapnies, and it is a toll call from one side to the other. Back before the partition of the city, it might be impossible to call from your house to your neighbor's house, or you might have to pay an exorbitant toll. My grandfather, supervising water and sewers for that city back in the 20s, had to have three telephones in his house in order to be able to contact all of the people that worked for him.
EconDoc wrote:The problem with phone and cable service (and electric, gas, water and sewage, etc.) is that they are natural monopolies. There are some businesses that are just not well-suited to competition. In the case of utilities it is the need to construct infrastructure that is the problem. We don't want three different sets of phone lines run down the same street by three different companies. That is too expensive. The best way to deal with a natural monopoly is through regulation.
However, my concern about "net neutrality" is that it will somehow be co-opted into something approaching the fairness doctrine. Example, what if, when you Googled "NRA", you got the Brady Center instead, with the NRA's website buried three pages later? That is the sort of garbage that I fear from all of this.
And this sort of thing happened back in the infancy of the phone companies, leading Strowger to invent his dial telephone system, which Bell immediately stole, or at least parts of it. Strowger was a Kansas City undertaker who thought that the live operators of the day were taking bribes to block calls to him and route them to his competitors, and he was probably right.
And regulation, done right, can work, but getting it done right is where the tough part is. When I was a boot phone man, there were 76 different telephone companies in NY state, each one with its own clearly defined territory, and they didn't raid each other, although sometimes people with need to do business in both territories, such as a veterinarian whose phone I worked on, who had two almost identical telephones "side by each" on his desk, one for people who lived south of him and one for people to the north.
One of the regulatory rules of the franchises was that any phone company that went out of business for whatever reason could not be allowed to just die, but had to be taken over by a nearby company if a suitable buyer could not be found, and the nearby company elected by the bureaucracy was usually the one with the deepest pockets. Suitable buyers were very rare, because one of the regulatory rules was that anyone who bought such a company had to immediately upgrade its service to the state of the art. Thus, when Schoharie Valley Telephone was closing its doors because mom and pop couldn't get the kids to take over the family business, New York Telephone became the natural choice to absorb SVT into its "monopoly" allowing me the opportunity to work on old hand cranked telephones for a while, and I can honestly state that I have worked on every sort of telephone system from hand caranked to fiber optic during my career.
So regulation seems natural to me, but it scares me at the same time. I was there for the breakup of the Bell System, which was not the only phone company at the time, even if everyone thought so. And I was a low level manager and engineer through a lot of the years afterward before retiring in 1995, semi-forced, but with added perks that made staying on voluntarily and maybe being assigned to work in NY City very inattractive. And I have seen the benefits and pitfalls of regulation up close and personal as it were.
The best way to imagine it would be to cite the railroads, imagine having two or three competing railroads, with different gauge tracks and different signalling systems, etc, all competing for the same physical space. And that actually happened here and there. And what happened when one railroad went out of business, or your server? And what if your provider was bought by another who decided that they would only carry communicatons in EBCDIC (as if anyone could tell the difference these days) or in packets of 125 bits?
OK not quite realistic, and somewhat self destructive, but regulation would prevent that, while at the same time stultifying innovation, such as using left over space in fixed size packets to carry other information, like tweets.
[/rant off] Sorry, I get going.
