On Tue, 14 Nov 2006 23:34:33 -0700, Todd Allcock
<ElecConnec@AmericaOnLine.com> wrote in
<455b1e51$0$21132$88260bb3@free.teranews.com>:

>At 15 Nov 2006 05:34:29 +0000 John Navas wrote:

>> If it made sense (demand and economics), then the market would provide
>> it.
>
>Not always- Steven's example of Rural Electric was spot on. Government's
>job is to do what the people can't do for themselves.

I disagree. Government should only provide public things that can't be
left to the market, like defense, police, fire, and public
infrastructure. Forcing one group (non-rural dwellers) to subsidize
another group (rural dwellers) results in harmful economic dislocation.

There's no good reason for rural dwellers not to pay the full real cost
of goods and services they consume. When they do so, it creates
economic incentives which drive innovations that result in increased
efficiency.

>> When that hasn't happened, then either demand or economics aren't
>> there.
>
>Arguably, the army isn't cost-effective, nor the police force.

Those are public good that can't be left to the market.

>Sometimes
>society has to pay for safety and convenience.

Public good, yes; convenience, no. Again, the problem is that
government interference results in inefficiency and economic dislocation
through disincentives that inhibit innovations in goods and services.

Why should I pay to run power lines to your vacation cabin in the
mountains, which pollutes and despoils the wilderness? Why shouldn't
you be expected to pay for your own solar power and/or fuel cell system,
along with your own sewage system?

In the case of rural electrification, government interference might well
have greatly slowed innovations in micro off-grid power systems. Long
distance electrical transmission is expensive, inefficient, and ugly.

>> With regard to economics, I'm willing to be that most people would
>> object to paying (say) even $5/month more to have better service in some
>> remote rural areas. (I know I would.)
>
>Agreed. I don't personally want to pay for E911 either, but nobody asked
>me! I think blanket nationwide coverage would be a better way to
>spendour telecommunications taxes and fees than on E911 and number
>portability.

I disagree. E911 is simply a way for society to ensure that you pay
your fair share of emergency services (a public good) as a kind of
insurance.

Increased coverage in rural areas isn't (yet at least) a public good,
it's (still) a convenience -- while public safety could be an argument
for increased rural coverage, it's not clear that cellular is the most
appropriate way to provide that. For example, PLB technology may well
make more sense, and government interference might well result in less
innovation in this area.

If there really is demand and economics for wireless safety in rural
areas, then the market will respond. Government should be limited to
public good; e.g., operating the PLB satellite system, although even
that dislocates the market, inhibiting alternatives, both terrestrial
(e.g., OnStar) and non-terrestrial (e.g., Globalstar, Inmarsat, Iridium,
Thuraya). Commercial services are precisely the things that may well
accelerate increased digital coverage in rural areas once the AMPS
mandate "sunsets".

In short, lack of more complete digital coverage in rural areas is a
likely _result_ of government interference, and thus a case for _less_
government interference, not _more_ of it. Likewise government mandates
for universal wired service.

>> It's inefficient and counterproductive to have one service subsidize
>> another. USF primarily supports libraries and schools, and even there
>> it doesn't make sense, since it interferes with free market
>> alternatives.
>
>What alternatives? As recently as just a couple of years ago, banks were
>asking the Fed for permission to operate ISPs in rural areas just so
>small towns could have an ISP to do online banking! (Post-depression-era
>regulations prohibit banks from operating business not directly related
>to banking.) We're talking about a rural need for dial-up ISPs! Not
>even broadband. There's a digital divide that the free market doesn't
>find economical to bridge.

You're too impatient. It takes time for innovation and market response.
It's precisely those short-run opportunities that drive long-run
innovations. Or put another way, short-run pain for long-run gain. If
instead you legislate away the short-run pain, then you destroy the
incentives for long-run gain, which tends to result in long-run pain.
When there is demand and economics, the market will respond, as long as
we give it time and opportunity to do so.

>> The big obstacle to wider availability of digital in rural areas has
>> been the AMPS mandate (government interference in the market).
>
>Nonsense. Your "free-market" should've fixed it by itself- if digital
>was so superior and cheaper why haven't rural providers already upgraded
>all of these AMPS sites to take advantage of these benefits? They
>Could've left just a couple of AMPS channels for minimal compliance just
>like the metro operators. The real reason is, just like AM radio was
>never fully replaced by FM, AMPS works, and works well for what it is.

It's illogical to interfere in the market and then try to blame the
market for not working. You may think the AMPS mandate isn't a factor,
but there's no way to know for sure when it's still in place, and plenty
of both logic and evidence that it is a factor.

For example, a big part of the problem with the AMPS mandate is that it
artificially reduced demand for digital service, both in cellular voice
and in commercial services (e.g., OnStar). Had there been more natural
demand for digital, then deployment might well have occurred much
faster.

There was simply no practical and economical way for carriers to do what
you suggest, much like your suggestion that there's no cost to leave
AMPS in place after "sunset".

>What hinders the migration to digital in rural areas is our stupid
>multiple digital standards. Rural carriers have to replace/supplement
>analog with multiple incompatible digital implementations to get roaming
>revenue from all of the major carriers.

Again, I disagree. Left to itself the market is quite capable of
dealing with technical issues like that, multi-format DVD recorders
being a classic case in point. It's not that difficult for rural
carriers to support multiple standards, as many of them do.

It made sense for government to mandate number portability because that
removed an artificial barrier to competition. On the other hand, it
doesn't make sense for government to mandate a technical standard
because that tends to greatly inhibit innovation. If, for example,
government had inhibited development of CDMA in favor of TDMA, then we
would have lost the benefits of related innovations, including W-CDMA.

>> Once
>> that mandate sunsets (long overdue), we'll be much more likely to get
>> improved digital coverage in rural areas. In other words, the solution
>> is less government interference, not more government interference.
>
>The real solution is too late to implement, but the government should've
>made the wireless companies choose a single national digital standard,
>like they forced television broadcasters and manufacturers to create NTSC
>fifty years ago. If the modern-era FCC had been running things 50 years
>ago, we'd likely have needed two different sets to watch NBC and CBS!

With all due respect, that's a terrible proposition. The market left
alone would have undoubtedly sorted things out, just as it has in other
areas. Instead we got stuck with the crappy NTSC system for decades,
and are only now able to get beyond its severe limitations.

The market does work, much better than government interference, even
though it doesn't always do what you want or think it should do, and
even though it's not as fast as you want it to be. We just have to
resist the powerful temptation to meddle.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>