Proved Right at Internet Speed

Here was my prediction, in an article on "community" investment in services like broadband:

Bureaucracies never, ever let themselves die, and there is no way a
municipal broadband business will ever let itself be killed by a
competitor - that competitor will be blocked, even if that likely means
that local broadband consumers have to stick with higher costs and
outdated technologies.

Now there is nothing abnormal about this -- every business tries to protect itself from competitors.  But only the government has the unique and dangerous power to block competition by law, which makes it a particularly dangerous owner of business assets (either on their own or via the dreaded "public-private" partnership).

I must admit, I expected it to take some time to be proven right.  I expected that things would go OK for the local governments in broadband until an (inevitable) technology shift found them defending their outdated infrastructure against new entrants.  However, proof comes much faster, via Reason's Hit and Run:

Boston's Logan International Airport is attempting to pull the plug on
Continental Airlines' free Wi-Fi node, which competes with the airport's
$7.95-a-day pay service.

In an escalating series of threatening letters sent over the last few weeks,
airport officials have pledged to "take all necessary steps to have the (Wi-Fi)
antenna removed" from Continental's frequent flyer lounge....

At stake is a sizable chunk of revenue that Massport receives from its
pay-per-use Wi-Fi service, which is operated by a commercial provider
called Advanced Wireless Group.

Q.E.D.

Update:  By the way, the mother of all government backed cartels using state regulatory power to squash competition that might reduce government rents is in tobacco.  Good article here at Reason.  They summarize:

In short, a cartel of states has colluded with a cartel of tobacco companies to create a public-private
supercartel: a market-fixing scheme that is locked in by law, yet is accountable to no particular
government authority; that is immensely profitable to the parties at the expense of millions of hapless
consumers; and that is enforced with penalties that clobber any would-be defectors. The deal also creates
what amounts to a new national taxing authority that arises from state collusion and that bypasses Congress.
The companies provided the deep pockets, the states provided the muscle, private law firms provided the
legal talent, and public-interest groups provided legitimacy.

  • Salmo

    Actually, competition in internet access around here is governmentally limited already through a local franchise agreement. Our provider is awful, owing to criminal acts by the original owner, the long term solution for which is evidently to overcharge users until they can adequately maintain and upgrade the servers. Almost everyone would like to see competition, but that is not possible. If it was our town running this deal, we could at least the ballot box. I am surprised by the number of people whose response to my rant on this respond with words to the effect of, "You too?" Market theory is attractive, but we actually are getting a politically managed variant where pay-to-play rules stack the deck against many consumers.