[opendtv] Re: 20050509 Mark's Monday Memo

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Tue, 31 May 2005 11:45:28 -0400

Craig Birkmaier wrote:

> Well first, AT&T had NO COMPETITION, except for
> telegraph and the limited amount of spectrum that
> is allocated for private two-way radio. And in the
> early years, this was a VERY capital intensive
> business. One could argue that a monopoly was
> needed just to encourage the investment in
> infrastructure, as was the case when the government
> decided to subsidize the development of rural
> infrastructure by shifting revenues from the more
> profitable urban consumers.

Okay, so you argue that back then, a monopoly was
essential to create the infrastructure of this
"utility," but that now this is no longer the case.

Which is what I'm also arguing. For terrestrial OTA
television, you don't need a monopoly to provide the
infrastucture. Not saying it CAN'T be done that way,
just saying that there are better alternatives.

> we are moving to a telecom infrastructure where
> phones do not have wires, as this is the usage
> pattern that most consumers want.

Well, that's completely misleading. The telephone
*instrument* might be wireless, but the system that
makes it work is quite "wired." But that's neither
here nor there.

> 2. Creation of a real market for use of the
> infrastructure - The utility should have little
> if ANY say in the pricing structure. This is for
> the marketplace and regulators to decide.

Regulators? So this is a step in the wrong
direction. Having to depend on regulators is
something you do when there are no better
alternatives, not something you do when plain old
competition can do a better job.

> Broadcasters will ONLY focus on THEIR market.
> There is no incentive for cost shifting to
> provide service to smaller markets.  And there
> is no incentive to allocate spectrum for
> potentially competitive applications.

I guess you really don't believe in free enterprise
working, then. Broadcasters, and the conglomerates
that own stations, can certainly do a better job of
providing TV for the smaller markets than cable TV
companies can, simply because their infrastructure
costs are far lower per household served. However,
the govt can always play a role here, with tax


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