[ NNSquad ] New customers are a bad thing? [Re: nnsquad Digest, Vol 5, Issue 306]

[Russell Smiley <im.russell.smiley@gmail.com>]

On 11-07-13 07:40 AM, Jerry Leichter wrote:

> 3.  The European approach - also practiced here with electricity - of
> forcing sharing of privately-constructed infrastructure.
> Unfortunately, this only makes the funding issues worse:  If it isn't
> worth investing in this stuff when you have a monopoly over its use,
> it certainly isn't when you have to share it (at regulated prices).
> Legally-required sharing of infrastructure is a fine idea once you
> get the infrastructure built, but as these discussions make clear
> (and as should be obvious), such an approach can only share what
> exists, it's really bad at making new stuff come into existence.

I don't quite follow this pessimistic line of thinking. Incumbents seem 
to use it a bit to try and discourage the "open access" idea, but it 
really doesn't make much sense to me at present.

If incumbents are forced to share access to infrastructure they now have 
a new set of customers via wholesale (correct me if I'm wrong, but I 
think the label "source of revenue for incumbent" would be accurate) who 
presumably are actively and enthusiastically engaged in ensuring that 
the infrastructure provides the capability they need to support their 
business (read "new source of revenue to fund infrastructure growth"). A 
simplistic view, I know, but it sounds like a win-win to me; except for 
that nuisance competition factor on the retail side...

The problem seems to me that North American incumbents (and perhaps 
elsewhere) generally have both retail and infrastructure businesses 
reporting to the same executive/shareholders, so the infrastructure line 
of business seems to be instructed to exclude new customers (in the form 
of wholesale access) in order to protect the retail business.

Is this a case of "Cut off your nose, to spite your face?" Conflict of 
interest in relation to the public good? Sure seems like it to me.

Since corporations don't seem to be able to act in the public good of 
their own volition it does seem necessary for the public to help them 
along in the form of government regulation.

Russell.