Telecom and Internet regulators often create policies that have effects opposite of what they intended, explained Dr. George Ford, Phoenix Center chief economist, from the PTC’19 Center Stage.
“Modern policymaking is plagued by notions about competition,” he expressed. The point is that a small number of suppliers in fixed networks are the result of economic conditions, not a failure of policy, Ford confirms. “If only two firms can profitably offer the service, then demanding more is wishful thinking and prone to produce bad policy.”
If you ask the FCC how many more competitors they want, the answer is always “one more,” Ford quipped. But the agency also wants lower prices. “Policymakers often call for aggressive price competition, not realizing that doing so will in turn reduce the number of sellers, which they then lament,” he concludes.