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My understanding of the situation is that regulation has recently been trying to aid competition by requiring the baby bells to open their networks to competitors. Without that, would-be competitors would need to spend billions to build additional networks to every home.

Technically, this is correct. In reality the regulations serve to protect the monopoly. Let me try a metaphor.

You have two young children, both boys, 4 and 8 years old. There is only one TV in the house. The eight year old is watching the TV and hogging the remote control. The four year old wants to watch a particular show but the eight year old has interest. The four year old generally bugs, bothers, tweaks, annoys and cajoles his older brother for access to the remote control. Eventually the eight year old gets fed up and smacks his little brother. The little brother wails, tears streaming from his eyes.

The younger child runs directly to you and demand intervention. It simply isn't fair that the older brother can hog the remote control just because he is bigger and already it in his grips. After a stern lecture the older brother promise never to smack the little one again and to always share the remote control fairly.

You leave the room and the big brother turns to the little one and says: "I'm going to get you for this!".

The last mile access monopoly owns the phone line and the cable line. Regulations say that the should play fair. At senate hearings everybody promises to be competitive.

Why would I spend one dollar and any time to help a company set up a network just so that network can compete with my network. I would not and the incumbants did not. When given access to a central office at all, the CLECS were give access to the offices which require the most equipment investment and service the least attractive demographics. Then they shrug their shoulders and talk wisely about flaws in the CLEC business model.

Again, nobody has the incentives to innovate. Satellite, MMDS and some sort of free space optics may solve this problem. Time will tell.

Short question. Long answer.


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