February 22nd, 2011

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I suppose I shall need to respond to this eventually

It grows rather wearisome, however. This piece on how the wireless market is the bestest most competitive market in the whole world. http://techliberation.com/2011/02/21/just-how-dynamic-is-the-mobile-internet-marketplace/

I'd ignore it except for the casual reference to us at PK for stuff we generally don't say. The annoying thing is that Adam used to be capable of more sophisticated analysis and less name calling but, like many Libertarians, he totally flipped out after Obama won in 2008.

The short answer is that the sort of analysis on which he relies rather misses the point. Asking if a market is "competitive" or "not competitive" as a basis for regulation with no frame of reference is as silly as asking how high is up. I've made this point on numerous occasions, especially with regard to wireless. The answer is that real economics is complicated and whether we ought to regulate in any given market requires us to know what we are trying to do and why. Are we trying to ensure universal service? Low prices for consumers? Stability of the platform? Innovation? Competition where, and at what point in the lifecycle? Are we troubled that services have extremely high mark ups in excess of traditional "competitive" services? Or is it sufficient that prices be "affordable?"

My basic response until I have more time is over two years old, but still generally sound. http://tales-of-the-sausage-factory.wetmachine.com/content/why-do-competitive-markets-keep-misbehaving-the-curious-case-of-cellular-txt-msging