Friday, May 11, 2012

Comparison of the regulatory environments for airlines and broadband -- instructive


Timothy Lee has an interesting article on Ars Technica comparing the airline industry with telecommunications, “What the airline industry can teach us about broadband caps”, link here

He starts with an tale about an airline traveler who wasn’t allowed by a particular gate agent to bring an obviously fragile viola on to a fight as a carry-on. (That brings up a posting I made on my “IT job market” blog May 9 about carry-ons, electronics, and maintaining connectivity while traveling.) He gets into a discussion of how “first class” passengers subsidize travel for everyone but that works in a competitive market.  He also discusses how airlines were prevented from having too much vertical integration. They can’t own the airports.

But no such analogy exists in telecommunications, where merging and consolidation is removing competition, particularly in the broadband use area.  This is does not bode well for businesses  (like Netflix) and consumers who want to move movies and television to online streaming, 

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