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Hemphill's January column - Government dole

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[quote]QUOTE: Originally posted by Dick_Lewis futuremodal: I specifically referred to telecommunication technology improvements as a factor in the break-up of AT&T and certainly didn't mean to imply there hadn't been much since then. Rather, my reference to atrophy was in connection to the so-called "last mile" problem so widely documented in the general business and trade press over the past eight years. There is now a veritable explosion of investment announcements by the "Baby Bells" concerning fibre optic investments, etc., all turned loose by an end to "open access." With regard to differential railroad pricing, that's called sound management practice, and the Staggers Act has relief mechanisms should inappropriate pricing occur. [/quote] We haven't seen a "vertitable explosion" of investment by the Baby Bells now that there has been a parial re-regulation of the telcoms into regional monopolies. What incentives do monopolies have for any such investment? None. What's going to happen is that internet users will become frustrated with the lack of broadband access and switch to wireless for last mile connectivity, or wait for the technology that allows broadband via the power company's wires. All the left wing courts' did in barring ISP's access to last mile phone line connections was cause millions of internet users to either lose their prefered service or pay much higher (read: monopoly) rates for fast internet connections. The customer gets screwed again. Did the Staggers Act really result in an increase in railroading's share of intercity freight? If the Staggers Act was really deregulation, shouldn't rail's share of intercity freight be around 40% or 50% by now? But it ain't, is it? All we see are more and more trucks on the highways as former rail shippers lose their branchline connections or get fed up with bad service. Meanwhile, long stretches of the nation's rail grid go underutilized while other sections are bogged down in congestion. That's what happens in a monopolistic economy. Every economics theory predicts such macro-inefficient responses.
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