Francisco Azuero's List: Regulation

• There are many cases in which the agency, of whatever nature, by which a service  is performed, is certain, from the nature of the case, to be virtually single;  in which a practical monopoly, with all the power it confers of taxing the  community, cannot be prevented from existing. I have already more than once  adverted to the case of the gas and water companies, among which, though perfect  freedom is allowed to competition, none really takes place, and practically they  are found to be even more irresponsible, and unapproachable by individual  complaints, than the government. There are the expenses without the advantages  of plurality of agency; and the charge made for services which cannot be  dispensed with, is, in substance, quite as much compulsory taxation as if  imposed by law; there are few householders who make any distinction between  their "water-rate" and other local taxes.
• There are many cases in which the agency, of whatever nature, by which a service  is performed, is certain, from the nature of the case, to be virtually single;  in which a practical monopoly, with all the power it confers of taxing the  community, cannot be prevented from existing.
• the state should either reserve to itself a reversionary property in such public  works, or should retain, and freely exercise, the right of fixing a maximum of  fares and charges, and, from time to time, varying that maximum.

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• can reverse the Bush administration’s predictably antiregulatory decision to  define broadband Internet access as an information service, like Google or  Amazon, over which it has little regulatory power. Instead, it can define  broadband as a communications service, like a phone company, over which the  commission has indisputable authority.

• Rather than seeing an explosion of new competition, the broadband access  business has consolidated to the point that many areas of the country have only  one provider. Broadband Internet has unbundled into a business with many  unrelated information service providers vying for space on the pipelines of a  few providers.

• The FCC’s decision rests on the idea of “common carriage”, a principle that  is, in fact, far older than the telephone.

   

  Excerpts from Justinian’s “Digest” of Roman law suggest that 6th-century sea  captains, innkeepers and liverymen could not refuse board to any cargo, man or  horse. William Blackstone, in his 18th-century “Commentaries on the Laws of  England”, was more explicit: to open a house for travellers implied “an  engagement to entertain all persons who travel that way”. English common law  came to see innkeepers, boatmen, warehouse owners and granary operators as  “common carriers”: transport trades compelled to serve all comers, and to charge  reasonable rates.
• First, many transporters enjoy a natural or state-granted monopoly and need to  be restrained from exercising it with too much abandon. A medieval innkeeper,  for example, often offered the only lodging in town; a boatman could cross only  with the king’s writ. Second, the state sometimes offers favours of its own to  transporters—public lands and roads, say, or the seizure of private property to  make way for new infrastructure—and expects a certain level of public service in  return. Third, transport is essential to commerce. It represents an input cost  to almost all businesses, and to restrict access or overcharge is to burden the  entire economy.
• Telegraph lines presented a similar economic challenge—high start-up capital and  low marginal operating costs.
• over the past decade almost all developed countries have extended some kind of  common-carrier arrangement to broadband access
• France and Britain, for example, required their former monopoly telephone  companies to make their physical infrastructure available to rival ISPs, which  rent it at regulated rates and compete on price and speed.
• The single largest reason given for failing to purchase broadband access in  America is price, and many non-adopters are stymied by hardware fees, a lack of  billing transparency and the extra cost of bundled services that providers often  add to internet access.
• The FCC’s current plan—to ask last-mile providers to subsidise rural service,  and to ensure equal treatment of packets of information—is a mild intervention  by global standards. America’s modern-day common carriers should count  themselves lucky.

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