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Comment by minimax | Hacker News Reader

If you want to make Internet service a regulated monopoly or a municipality provided service, there will be no incentive to upgrade to new technology when it becomes available. That is the virtue of competition. Competitors can differentiate their offerings based on price and features. Competitors will install faster networks in order to win market share. Competitors will find ways to reduce costs so they can offer service at lower prices to gain market share. You don't have any of that if the municipality owns the network.

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You've made many predictions about what "competitors" will do. Why the hell haven't they done them already? Data service in this country is terrible, for most business and nearly all residential customers.

Yeah it is a common mistake made by free market folks:

Competition will drive down prices, increase speed and result in the best possible customer service!

Except that in markets with expensive outlays to get started that rarely happens because the expenses put a natural limiter on the amount of people that can actually mount competition making that number low enough that the competitors can essentially carve up the market, price fix and then all suck approximately equally, indefinitely. Just like ISPs and cell phone carriers do now (and will continue to do so until the government steps in and forces them to fix their shit).

If one must generalize, I think we should say that competition tends to benefit the consumer, and fortunately competition often arises spontaneously, but there are many factors that can disrupt this virtuous process.

> competition tends to benefit the consumer

In regulated markets. After all, things like anti-cartel laws are regulations, and we absolutely do need those.

There are better examples one could use. After all encouraging competition isn't really the point of cartels.

I think the point was that cartels will form in a regulatory vacuum and therefore the intrinsic virtues of market forces are oft overstated.

How much "competition" is offered by the effective duopoly that exists in most places for broadband?

Duopoly? A large number of major cities and their suburbs only have 1 true highspeed option (cable) and slow wireless or DSL. FIOS deployment is sadly limited.

You're saying that there's no competition in municipalities? They're called elections. We hold them more than once a year.

Not to mention that municipalities compete with one another; it is actually easier in most places in the United States to move to a neighboring municipality than it is to switch to a better ISP. For example I would have to move over a hundred miles to get better internet access than the large, regional ISP that serves my area, and meanwhile I could move about five miles and "technically" live in a different city in the same metro area.

Finally, I am not advocating municipal control instead of private ISPs, I am arguing municipal offerings in addition to private ISPs. It is tautologically impossible for the introduction of new entrants into the market to itself constitute a reduction in competition.

Too bad in germany the big privately-owned ISP's (tier1 DTAG being among them) have very little interest in upgrading to new technologies, making city-owned ISPs pretty much your only option if you ever want to get FTTH or VDSL (the village even offered to pay some money to DTAG to implement it - no thanks - the next closest city's utilities company had to roll their own network to get it done).

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