Should we oppose the Data Superhighway/NII?

[Jason Zions]

   Okay, now let's look at Tim May's hypothetical case. Tim wants X-rated
   cable. But the first nine cable companies don't want to provide it. And
   the Metzger-Godwin Cable operation, which would provide it, can't get
   financing. There's a market for it, but there's also a barrier to entry.

If there's a market for it, investors will poney up the money; that's just
the way it works, Mike.

   I leave to your imagination what happens in the event that we *do* 
   start the P-G Cable company, but content providers won't sell other
   programming to us so Tim is forced to choose between only X-rated
   cable--us--and cable services that provide other kinds of programming.
   (Tim may have no problem with this, but lots of other people in our market
   will want to watch CNN as well as X-rated videos.)

Cable, like many other utilities, doesn't restrict you to a single provider.
I can imagine having phone lines from two local loop providers to maximize
redundancy; similar for an information utility, where the information
provided will likely differ from one provider to another. In the cable
business, two companies will not want to compete on price; they'll try to
compete on content instead, each having exclusive material. The ideal
situation from the cable companies' perspective is for customers to *want*
to subscribe to more than one. The infrastructure will grow to allow it.

   Wouldn't it be better to live in a world in which the cable
   infrastructure, like the telephone infrastructure, could be serviced by
   competing providers, and at the individual level? We already have this
   with long-distance--if I want, I can have Sprint, MCI, *and* AT&T accounts
   and use them all from the same phone. Ultimately we'll have it in the
   local loop.

If you have competition in the local loop on shared infrastructure - who
owns that infrastructure, who maintains it, who allocates costs? Probably
some neutral 3rd party, possibly regulated. Square one.

   > > They used the same wires, Perry.
   > 
   > Nope, they didn't. If necessary, we can dig up references.

   Oh, you're saying that one couldn't make a phone call from one local phone
   company to another?

Exactly correct; you had to know which company provided service to your
party and use their equipment. Much like dialing 1-800 numbers from
overseas; you have to contact the US operator for the company that provides
800 service and ask them to hook you up. Perhaps 800 number portability will
solve that, though; are you suggesting something like the infrastructure
that supports 800-number portability will appear at the local-loop level as
well? Not any time soon; they can barely get the 800 number stuff to work
right, and local loop is three orders of magnitude larger.

Jason Zions