[opendtv] Re: Electric power as a natural monopoly

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 7 Feb 2014 22:07:22 -0500

> On Feb 7, 2014, at 8:07 PM, "Manfredi, Albert E" 
> <albert.e.manfredi@xxxxxxxxxx> wrote:
> Really? Are you saying that there are multiple different companies that have 
> erected their own high tension lines between two adjacent cities, any of 
> which can carry the full load?

Not at all. The transmission lines are a shared resource. From Wiki:

In the United States in the 1920s, utilities joined together establishing a 
wider utility grid as joint-operations saw the benefits of sharing peak load 
coverage and backup power. Also, electric utilities were easily financed by 
Wall Street private investors who backed many of their ventures. In 1934, with 
the passage of the Public Utility Holding Company Act (USA), electric utilities 
were recognized as public goods of importance along with gas, water, and 
telephone companies and thereby were given outlined restrictions and regulatory 
oversight of their operations. This ushered in the Golden Age of Regulation for 
more than 60 years. However, with the successful deregulation of airlines and 
telecommunication industries in late 1970s, the Energy Policy Act (EPAct) of 
1992 advocated deregulation of electric utilities by creating wholesale 
electric markets. It required transmission line owners to allow electric 
generation companies open access to their network. The act led to a major 
restructuring of how the electric industry operated in an effort to create 
competition in power generation. No longer were electric utilities built as 
vertical monopolies, where generation, transmission and distribution were 
handled by a single company. Now, the three stages could be split among various 
companies, in an effort to provide fair accessibility to high voltage 

> The truth is, the congloms will have to adjust to the changing landscape, and 
> they have been. Yes, even ESPN, as the article I posted recently reported. 
> And just like I said, whatever tier structure might have been imposed by the 
> local monopoly MVPDs is not likely to survive that transition.

They prefer to maintain the landscape they like. There's a reason they are 
called "Walled Gardens."  Building yet another walled garden is easy. Moving to 
a real marketplace is terrifying... And unnecessary when you have monopoly 
power with full support of the regulators.

> Among other reasons why, because the **individual content owners** won't need 
> to be hampered by the demands of the local distribution monopolies.


So who is going to deliver the bits? 

You have it "scratch my backwards." The distribution oligopoly operates at the 
mercy of the content oligopoly. They get exclusive content that causes people 
to subscribe. The content congloms get big checks without having to deal with 
those pesky customers.


Other related posts: