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This page contains a single entry from the blog posted on June 12, 2007 3:45 AM. The previous post in this blog was Two thumbs down for the Cleaning Crew. The next post in this blog is Those Vancouver drivers. Many more can be found on the main index page or by looking through the archives.

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Tuesday, June 12, 2007

Open source this isn't

Portland's sister city in fiscal irresponsibility -- San Diego -- is toying with a municipal wi-fi system. But the city's bureaucrats are skulking around and cutting a deal with EarthLink largely in secret, which has some people a little upset.

Comments (7)

Backroom deals are always branded " It's for the public's good" As Cool hand Luke might say " Boss, I wish you wouldn't be so good to me".

What struck me in the article is that they referenced a couple other cities (SF was one) where lower income people pay less for their wi-fi. Whaaa? Why should they pay less for the same service? Last time I checked, electricity rates, water rates, sewer rates, natural gas prices, etc, did not vary depending upon your income...

The cost for delivery of DSL, for example, is 7 to 9 bucks per month. As per some study in Colorado.

In an ideologically pure Communist (state-owned) situation the price would be 7 to 9 bucks.

This is an around-about way of saying that any differential pricing scheme is little more than the exertion of monopoly power to stratify the market to the incomes of folks so as to maximize revenue (profit, whatever).

Which is yet another round-about way of saying that it is by definition an abuse of monopoly power . . . but actionable (and only potentially actionable) against private monopolists. And no monopoly can exist without government approval, overt . . . or tacit by refusing to preserve a level playing field among private competitors.

Tack on a reasonable rate of return (a theoretical notion, I know) and a DSL bill would be around 12 bucks.

Tack on a 10 to 30 buck Wi-Fi hub by willing private folks (who's own access is already bandwidth-limited, again to stratify the market to maximize revenue) and the cloud will have too few holes to be of public concern in any high density area.

Do Cubans have free DSL or cable?

How about the Chinese?

Paradise lost?

Your argument is no stronger than saying that a Military Industrial Complex is a good on balance so long as it contains some smidgen of a component requiring transference of some of the technology to civilian use.

Or are you merely saying that the arbitrary use and abuse of the franchise power to grant monopoly power (allowing money from the regulated activity to subsidize unregulated but equally monopolistic activity) is the essence of the creative energies of the entrepreneurial spirit? The revenue maximizing stratification of the market is nearly identical in both the regulated and the unregulated activities. And so too is the PR tripe that sells the belief that the higher price is caused by the lower prices offered to the poor. Buy it if you like.

I still have faith in consumer sovereignty and in preservation of fairness in the private marketplace. There might be some gains from the franchise model (mimicked routinely through tolerance of monopoly in segments like food retail and banking etc.) but they surely come with a cost (I say too high a cost) in poisoning of the political process and in extractions of monopolistic rent.

City sponsored ventures to solve the wi-fi cloud problem is one of its own creation, stemming from abuse of the rationale for granting any competition-reducing franchise at the outset.

(China? My DSL agreement contains a superficially valid loophole to my right to privacy such that Qwest can seize all my stuff -- hard drives etc -- and turn it over to the government authorities, or anyone for the matter. If I were in a position to review and object to the franchise I would refuse unless such a waiver of a bill of rights protected interest were eliminated.)

Consumer sovereignty?

You can choose from dial-up, DSL, cable modem, free Wi-Fi (doesn't work), using the neighbor's Wi-Fi (does), satellite dish, or (soon) WiMax.

But you still think The Man is preventing you from making your own decisions or granting monopoly franchises?

Capitalism won. Get over it.

Some defender of capitalism you are. I suppose you could blur the lines too between a franchise for all "soda pop" versus consideration of competition between Coke and Pepsi because consumers could always get bottled water instead to quench their thirst.

You are actually well suited too to work in the patent office. The nonobviouseness of holding an auction online is so pronounced as to prohibit others from doing likewise (or engage in extended litigation on the matter). It is a portable blunder that broadly applies nearly all across the entire online franchising spectrum (think of it's application to "online" banking, or "online" [whatever]). It requires analytical skills that would consider the placement of a roof over an open-air food/trinket vending stall as nonovious to even a cave-dweller.

The public benefit from the ideology of capitalism (private ownership and control) is that improved productivity, etc., ultimately becomes widely adopted for the improved well-being of all. ADSL is just a set of routines (instructions) that can be coupled with some tiny-hardware just like so many other things that are standardized by the International Organization for Standardization (ISO). Granting Qwest a territorial franchise for exclusive use of DSL has all the features of capitalism as one might find in any classic command economy. (Ergo -- Gorbachev won, not Reagan; or maybe they both won at the same time.) Private competition outside of government control is just too uncertain and disruptive (think Schumpeter) to be tolerated, I suppose. It has risk and risk is not something that the risk averse modern capitalists need to endure. Mmmm Tasty.

Perhaps you should work for the Economic (Exclusive Franchise) Development Department (and moonlight as a consultant to pension trustees or insurance company investors, for the betterment of the public interest).


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