Just because a provider is the only one with the infrastructure to service one area still doesn't make them a monopoly.  They may have control over servicing that area, but they don't control the entire market.  Anyone who puts up a tower is immediate competition.  Since 3G internet is relatively new (and not all that anyway, I'm all about WiMax and LTE) the old argument is still out there in force because for a long time it was true...there was barely any competition in a lot of areas since upgrading cables can be an expensive proposition.

Some monopoly arrangements are simply convenience.  It would be inconvenient to have a bunch of cable companies digging everywhere, just like it'd be inconvenient to have more than one post office.  Now that wireless internet is becoming prevalent, a lot more underserviced people will have options.  I'm one of them.  I just switched from dialup to 3G, and I'm honestly not convinced I want to stick with it.  It is better 90% of the time, but the modems I've had the 'pleasure' of using just plain suck, and the plans are far more restrictive than the cable company caps people are bitching about.

For the record, I boycott these kinds of things.    

I'll do some bizzar expensive foreign satilight internet that can only get me a 1.5 Mb connection before I let somebody charge me for the amount of data being downloaded.   (like paying for 1.5 Mb a second is fine, but '90 Mb total a minute' is retarded and misleading)  

I'm all for having a steeper price on bandwidth based on my MTU, but charging per Gb downloaded is retarded and doesn't make any sense.  Its not like the bandwidth is lost when I download a Gb movie, it is available again the moment I stop using it.   And unlike things like water, upgrading servers and such can directly change the amount of bandwidth available, i.e. they can make more just by thowing more cash at it.   So it makes no sense to charge based on an unrelated number.

It is like Mark-to-mark sales (spending money based on expected returns from investments that haven't actually payed off yet)

How about no.

They're bleeding cash in the cable business so fast they may not be in the game at all a year from now.  Cable is being replaced by fios, and that dinosaur is on it's last legs.

Nesrie, government backed monopolies are not monopolies created in a free market, you're supposed to actually refute a point, not reinforce it with more examples.  All but the olive press example are government backed monopolies.  Lincoln created the railroad monopoly to get it built for free, the telephone monopoly was created by the patent, the Tang dynasty formed a commission to regulate the salt trade.  Most unfortunately for you, the one example not government backed was a temporary monopoly and proof that free markets work.  A brilliant man used his knowledge to corner the market on olive presses for one season, and only one season.

The reason they do it like this is because most users burst, they don't sustain, bandwidth.  The average user hits a website and wants to get that website very quickly.  This means they want a very high throughput but once they have the website they won't do much at all on the connection again for another 5 minutes while they read that site.  Then when they click a link they want to burst again.

Assuming all users did that, then there wouldn't be too much trouble since you only need to have as much bandwidth available as is concurrently being bursted at any given time.  Since the majority of time is spent idling per user, you can handle far more users than if you guarentee bandwidth to each of them (for a lower price to the consumer).

However, as we all know, many people these days don't just burst, they max out their connection as much as 24/7 (torrent addicts) and even the average users are now getting into online TV, YouTube, etc. where you will use a steady (and high) amount of bandwidth for a long period of time.  This means that where the broadband providers used to be able to "provide" 6MBit to 1,000,000 people at a time, when all those people are watching Hulu at the same time all of a sudden everyone is down to 56k modem speeds.

So their solution is to drive off all the high bandwidth users so they can keep offering high burst bandwidth to the users that don't use it that much overall.  From a business standpoint this is good for them, because their margins will go back up.

This of course leaves room in the market for someone to cater to the high-bandwidth users.  One option would be to charge them whatever it costs assuming they do use the bandwidth 24/7.  This means a 6MBit connection will likely run several hundred dollars a month, but you are guarenteed to always have 6MBit to yourself whenever you want it.  In some cities you can already lease a line like this, though often setup costs are prohibitavely expensive.

In the end though, my guess is that if the cable companies started charging a variable rate based on bandwidth actually used and the overal network utilization, people would be even more pissed off (even though this system makes the most economic sense for everyone).  In such a system if you used 1MiBps for an hour at peak time you would be charged a lot of money.  However, if you did it at off-peak, or you only used 500KiBps then your fees would be much lower.  People don't like this though because they feel the company is being sneaky and trying to hide fees, even though this makes everyone pay for what they use.

Seems like an april fools joke to me.... But paying for traffic is quite common around the world, but $1/GB is ridiculous. Specially if there's no "free download limit"...

If a company tried that in sweden they'd be out of business in less than a week. It's a buyers market, it's better to be without internet (or even to go DIALUP) than pay through your nose for that kind of service.

So olive presses, telephone, US steel, railroads, oil, diamonds, software, grain, monopolies were all caused by governments... and you never said anything about a time period limitations, monopolies happen. They just do.

Unfortunately for you, you take this a lot more personaly than I do and get your jollies from odd places. Go ahead, show me a 100% free market.

Monopolies *can* occur in a truely free market but only if the company with the monopoly offers the highest quality and lowest cost services possible.  If that is the case then it's not a problem.  If that is not the case and the market is truely free then competition will appear.

In a non-free market (worst case, socialist state) monopolies are common and bad.  The government has a tendancy to try and fix problems created by regulation with more regulation.  This inevitably leads to more regulation, etc. until you are living in a purely socialist state (everything is 100% controlled by the government).

There are none in the world, I've looked extensively.

Well, cant help but think that with the economy the way it is now, if this pisses off enough people and they leave Time Warner, they may be forced to change their policy. Just thank god right now I dont have to deal with this idiocy

Never existed.  People don't like letting things happen.  It's against their nature.

Read your paragraph right there and consider why I would mention time in response to it.  You are inferring that a free market devolves into monopolies naturally.  Reality is the opposite, all monopolies and near monopolies created through brilliance and enginuity, have fallen.  Standard Oil created a monopoly by giving us low cost kerosene.  They were as underhanded as could be in their business practices, but they gave great benefit to society, and declined on their own without any help from the government.

As soon as they stop pretending they still have competition and take advantage of their status, the monopoly is gone.  Competition floods a rich market and kills the idiots off.  They are a self correcting anomaly, even coercive monopolies like Standard Oil rarely last long.

Edit: Fuck I'm typing slow today...

So first you say that there were not monopolies created in history by free markets. And now you say there were but they all have fallen. Who ever said that a monopoly has to exist indefinitely to be a monopoly in the first place? Given enough time, everything is finite. You are all over the place with this. Monopolies that give a benefit to society. Then monopolies that are only created by regulation. Then monopolies that declined on their own. So which is it? If they are a self correcting anomaly of the free market, then what was your point to begin with exactly? That they exist now and will end someday so let them finish their natural course and be beat out by someone who offers something better? That is not what you said at all to begin with.

And I never said heavy regulation was an answer. However, you can have a monopoly in a limited area. It's not a global monopoly or a national one but it is a monopoly when there is no equitable substitute from one service/good for another.

You can, but if other people CAN offer service there and just haven't, it isn't a monopoly in any meaningful way.  In the basic definition of the term, yes, but as far as I'm concerned not really.  To me, a monopoly has to be enforced one way or another and not just there due to an underserved market.

You are confusing natural monopolies with the complete lack of a monopoly. There are real regulations and barriers to entry into the utility market. They are still monopolies but natural monopolies which makes them a little different than the kind of monopoly you might encounter in a game of Monopoly.

The game of Monopoly is about as interesting as a pile of dead rats.

I'm not confusing anything.  Other companies may not be able to offer the same service in the same manner, but they can still offer the same service.

Actually, not in all areas aer there alternatives. That's the point. And natural monopolies exist. It's not something i just made up. Just because you experience something in your corner of the world doesn't mean it's the same everywhere else.

First problem, you're broad brushing limited monopolies and everything else covered under the legal definition of monopoly.  A monopoly is absolute control, not control on street a but not b, and only for speeds above 2megs with double digit latency.

Second problem, natural monopolies are not monopolies.  You do not have absolute control over a good or service simply because there are no competitors.  To be a monopoly, you have to prevent competition.  Control is active, not passive.  Wishful thinking that an entry bar and no takers makes a monopoly of the only competitor does not make it so.  This is why there are separate definitions for monopoly and natural monopoly.  The list of natural monopolies in this country is too long to imagine, they don't even have to monopolize the market before they are considered a natural monopoly.  Sears was a natural monopoly, Ford was a natural monopoly, Wal-mart was a natural monopoly, IBM was a natural monopoly, I could type for hours and not even have to look them up just for national scale or larger.  If you get down to individual towns, there are millions of natural monopolies that exist right now.  None of them are monopolies in function, and only some of them are monopolies in form.  The act of outcompeting the competition itself classifies them as a natural monopoly before they become the only competitor left, if they even get that far.

At which point they become a technical monopoly.  They fit the definition as the only competitor, but don't actually control the good or service because they are still beating all potential competitors that wont enter the market as a result of the superior good or service they can't match.  Natural monopolies still have to compete.

Also, note that you said regulations and barriers to entry in the same sentence.  Time-Warner can't even be a natural monopoly in any case as the government regulations created it.  Without just the federal regs, you'd have had competiting grids chewing them a new asshole over the last decade, instead of just the last few years.  With the federal regs, it was cheaper to compete with them on their own grid.

As in, Microsoft Windows?

Does it offer the highest quality with the lowest cost possible? I don't think so, but it is a virtual monopoly in any case.

With the user base of MSW, it could be a LOT cheaper while still being very profitable.

How about your local cable/internet provider? In each area it is a virtual monopoly, because there are no other choices available (or so few as to be meaningless).

Or the local power company?

But then, you said 'in a truly free market', didn't you? I guess that makes all the difference.

But, you contradict yourself. You first say "in a truly free market" it would not be a problem; then you go on to say that "If that is not the case and the market is truely free..." (but didn't you just say that 'in a free market? - indicating that the market was truly free?) ..."then competition will appear." But, in a truly free market, there will always be competition.

But there is no real competition to Windows, or the local power company, or the localized cable/internet provider, or the local garbage company, or the local water company, or the snail-mail company. They are monopolies, pure and simple.

Face it. The 'free market' is only as free as the government wishes it to be. And these days, our government is not given to 'freedom'.

At no point did we ever agree as to what a defintion of a monopoly is. Natural monopolies are monopolies, they are a different kind of monopoly. You want to just exclude natural monopolies because it's the only way your point makes any sense at all. I am including them. Natural monopolies are defined for a reason. They exist and they are in the "monopoly" family. And a natural monopoly might start off as good for society but that doesn't mean that will always be the case. You also didn't answer my question about you flip-flopping over what you are calling a monopoly, although according to your earlier arguments, they don't even exist without government regulation, and since you seem to dislike government regulation, i don't see how you consider them for the "good of soceity".

Although I thought it was obvious, I will point out that the game Monopoly was used as an example. I really don't care whether someone likes the game or not. Most people are familiar with it. If your defintition of a monopoly is as simplistic as the game Monopoly, then you are leaving out the complex definitions and examples. If you do that, then your point makes sense... but you excluding more complex economic concepts to make your point stick just proves that thet point was weak to begin with.

Lastly, in order for a monopoly to exist, there doesn't have to be the only one in business, the only one offering a product or service. Again, monopolies are more complex than the game, than the way you are using the term. Pure monopolies, natural monopolies, etc. It's not just one flavor. You are using the very basic definition for monopoly and then trying to tell me why the more complex economic defitions don't exist. Well, they do, and the cable companies fall into them.

Very interesting viewpoint on this by Bill Harris of Dubious Quality. Worth a read:

http://dubiousquality.blogspot.com/2009/04/clash-of-titans.html

This conversation makes me yearn for the days when people had better things to do than hang out in forums.......owait <sheepish grin>

Microsoft's Windows OS is a good example, no matter how much they try and push their OS on people, they can't stamp out the competition (Linux, MacOS, etc.). Because MS has not created the perfect product for the perfect price those competators will stick around.  As soon as MS figures out how to make the perfect product and they sell it at the perfect price then MacOS and Linus will fade away (unlikely to occur).

I think you underestimate the cost of running a company like Microsoft.  While I'm not a fan of the price of their OS, I am free to switch to another OS at any time if the price bothers me enough.

These companies control their markets because of government regulations causing high barrier to entry into the market.  I'm not allowed to just setup a tower and start transmitting wireless access to my neighbors.  I'm not allowed to build a small nuclear power plant in my back yard (hell, this will likely land me in prison for trying to create a nuclear device).  I'm not allowed to run power lines over the streets without permits and paying fees.  I'm not allowed to dig a ditch to provide power/water to my neighbors from my well.  All of this is because the government owns the roads, the airwaves, etc. meaning I am not allowed to actually bootstrap a competing power/water/network to my neighbors.

Yes, it does.  There hasn't been anything close to a free market since before the great depression.  The US is far from a free market today, and in fact there are more free places in the world (though still not entirely free).

It appears you misunderstood my statement here, perhaps I could have worded it more clearly.  In "If that is not the case..." 'that' referrs to a company offering a perfect product for a perfect price.  When I said, "...and the market is truely free." I was clarifying that was still an assertion, I probably could have left it out as it was redundant, since I already stated at the begining that I was talking about a free market.  There will not necessarily be competition in a truely free market.  If one company can provide a perfect good at a perfect price then there is no reason for competition to appear.  In most cases, people get greedy which causes competition to appear but it's not necessarily the case.

And this is exactly the problem.  The US (and the rest of the world) hasn't been even close to a free market for a long time.  And governments, by nature, are not free.

I don't understand the purpose of arguing about what defines a monopoly and when and how they are created. As far as a regular user is concerned, if s/he has no alternative means to get high speed internet access in their area, the effect on them is that of a "monopoly".

Whether it's legal, illegal, virtual, real, or whatever classification of "monopoly" becomes irrelevant to the user of the service. Their only choice is to swallow whatever pricing changes their provider throws at them, or to go back to dial-up.

And even dial-up can be a monopoly in some areas. When my parents first got a computer, there was exactly ONE company offering dial-up with a local number. Sure, they *could* have gotten AOL, but the cost of continuous long distance charges made that as impractical as satellite.

Nesrie, you flat don't know what you're talking about.  The board game better describes a monopoly than your misguided views do.

I'll switch gears to something more simple, big business is apparently beyond you.  Monopolize, to assume complete control or possession of, a monopoly.  Assume your family has an apple tree.  If only one member of the family likes apples, does that person monopolize the tree by being the only one that bothers to eat the apples?  That would be considered a technical monopoly because technically, only one person is eating the apples.  It is a natural monopoly because no one else gives a shit about apples, thus the natural result is only the one person eating the apples.  It is not a monopoly because there is no control or possession taken.  The rest of the family is simply ignoring the apples that are available to them.

Time-Warner does not have a monopoly because Time-Warner does not possess or control the market.  Your limited imagination has simply failed to avail you of your options.  You could even band together with your neighbors and do it the old fashioned way, build your own damned cable network.  Your town/city already owns all the right of ways where you'd need to place the cables, the cost would be negligible considering what you're paying for crap service now.  You could float a bond to set it up, pay the bond off with the proceeds from subcriptions, and put Time-Warner out of business with your faster, cheaper service.  Although once your local politicians get their grubby hands on it, they'll inevitably fuck the hell out of it in the long run...

Moosetek, Microsoft can't even stick to just competing with their competitors.  I'm still using XP, I'll still be using XP when Windows7 comes out, at which point I'll consider the point of upgrading and perhaps reach a different conclusion than I did with Vista.  Are you using Vista?

Most of your other examples are either wrong or government sanctioned.  Even the water company wouldn't be a monopoly.  When my grandparents built their house in Anchorage, they dug a well.  When the city annexed the surrounding neighborhoods and extended the central water and power grid, they required that all the wells be filled and capped.  Without city ordinances banning them, they'd have been on well water.  A lot of people would be on well water, city water generally sucks.  Not that we could do anything about it since federal regs mandate that city water tastes like shit, but if you had two competing water companies and two sets of mains, service would be better and cheaper, and things like a line break wouldn't stop you from getting water.  You could have a simple crank that controlled which valve opened into your residential pipes and use a standard meter system to rent the other service while yours was down without even having to make a phone call.  Reality is the result of a misguided view that natural monopolies exist in perpetuity, thus should be created and regulated for the good of the people, not the only possible outcome.

Annatar, there is no place in the United States of America where there is only one option.  Satellite internet is available everywhere at this point, even Alaska, which was too far north for the first birds they put up.  A monopoly exploits, you can't exploit willing customers of a replaceable luxury service they don't have to get.  Exploitation is impossible for Time-Warner to accomplish even if you ignore the more creative methods of escaping their grasp.  Being in the position of having to actually choose an alternative to regular broadband, I have no delusions on the subject.

It would be a pointless argument if it weren't for the fact that the government may take my tax dollars and decide to spend them on either driving Time Warner bankrupt (followed by bailing them out) or subsidizing someone else downloading porn 24/7.