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Comment by tzs | Hacker News Reader

The most interesting part in that is that in the UK, both Verizon and AT&T were strong and public proponents of local loop unbundling. When asked about it for the US, they say it is terrible and will hurt consumers.

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Because in the US, they own the loops, in the UK they'd get access to them.

I think a factor in making this easier in Europe is that all phone lines were put in by entirely government owned and operated enterprises, and it can't be argued that the public doesn't own them. In the US, if I'm not mistaken, most of the phone companies were and are at least somewhat private entities that invested private money in putting in the lines. Although often protected by exclusivity etc. this makes the "public owns it" argument much more murky.

a factor in making this easier in Europe is that all phone lines were put in by entirely government owned and operated enterprises, and it can't be argued that the public doesn't own them

Depends. When Ireland privatized it's state owned teleco, it included all the wires going all over the country.

Yes, but because the original investment was from the public purse, there's still a strong argument that, even if not legally, the public might have a right to some sense of entitlement.

All the citizens of Ireland voted to privatize the people owned telco and all its infrastructure?

No, the government did it. Member of the public were encouraged to buy shares and invest in share trading. IIRC many lost money.

At least here in Finland the lines were put in by a government owned company. Which was then privatized and later sold to Sweden. That private company now truly owns the lines, and the government is scratching it's head because it has passed a law that broadband connection is a "universal right", and it realized that it needs the lines for crises time communications.

> In the US, if I'm not mistaken, most of the phone companies were and are at least somewhat private entities that invested private money in putting in the lines

Most of the phone companies were Ma Bell, which had a government-sanctioned natural monopoly from 1936 to its breakup in 1984.

> Most of the phone companies were Ma Bell, which had a government-sanctioned natural monopoly from 1936 to its breakup in 1984.

If it was natural, why was a government sanction necessary?

In order to try and regulate it, the federal sanction put Bell under purview of the FCC, so the FCC could handle Bell directly instead of having to go through the Justice Department every time.

While it ultimately failed, there was a method to the madness.

Why government regulation? To prevent price gouging, favoritism to particular customers, killing off rivals. Prior to the Carterphone Decision you could not attach any third party equipment to the phone lines, including phones and modems. There was a huge battle for MCI to attach their long distance phone lines to the AT&T system. Common carrier status was invented to allow people to use their phones as they wish. When I was a child coast to coast phone calss were several dollars a minute. Now unlimited long distance is the price of a single call of the past.

(I realize that I answered the question "Why is regulation necessary?", but it goes along with the sanction.)

The concept of common carrier status had been around for a very long time when it was first used to apply to telecommunication services. These days, phone companies and many kinds of physical transport services are common carriers, while ISPs have only the benefits of common carrier status, and none of the limitations.

> If it was natural, why was a government sanction necessary?

Govt likes monopolies and companies like to have govt keep out competition, which is what the govt did for AT&T.

Interestingly enough, AT&T had been a govt monopoly well before 1936 and then lost that and regained it again in 1936.

AT&T loved being a monopoly.

> Govt likes monopolies and companies like to have govt keep out competition, which is what the govt did for AT&T.

A natural monopoly means that competitors are kept out naturally. No government intervention would be needed.

That's because everyone justifiably hates BT, rather than it made sense.

Well it produced the same result in Sweden. And I am sure that “everyone” hates the incumbents in the US too, so the result would possibly be similar.

Likewise in France (see FreeTelecom, pretty much the poster child for line sharing and local loop unbundling)

That's mostly because in the US they're incumbents, whereas in the UK they're challengers.

Because line sharing and (then) local loop unbundling makes new entries into the market significantly easier (as there isn't the cost to build a whole physical network upfront, and the network can be implemented over time instead) it drives competition in the sky and fees into the ground. It lets challengers challenge, but it's awful for incumbents as they can't just fleece their customers unchallenged.

(As someone who had Internet access in the UK (dialup) for quite a while before moving back to the US, I can tell you that I was surprised at how well it worked and how CHEAP it was. I had Demon and I was amazed at how clueful they were; especially compared to US ISPs.)

But more to the point: the US telecoms are deathly afraid of competition. The same thing goes for the CableCo's. Wireless is killing their wireline business and broadband isn't making up the difference. That's why they are looking at network-neutrality killing services/deals they can monetize. That's not necessarily a bad thing, but when one company essentially OWNS the access loop, it's a recipe for high-prices and bad service to customers.

If our FCC wasn't chock full of industry players looking to land a cushy lobbying spot after their term is up, we'd see a lot more competition (and better options for everyone).

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