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Again I'd emphasize one point you made here: "And in practice most all of the offers are difficult or impossible to really compare to each other in practice, so most consumers have to rely mainly on the marketing materials and subjective experiences." This is arguably the single most important factor here. When companies are incapable of meaningfully distinguishing themselves, you're going to trend towards monopoly because there is no way for competitors to offer a compelling argument for their product. They can try to compete on price/performance but in most industries, certainly including telecoms, economy of scale means this is a losing battle. Let's now imagine Comcast blocks Google due to payment from e.g. Bing. First off it's entirely possible that Comcast could not unblock Google even if they wanted to, since this would undoubtedly be breach of contract with Microsoft. But more importantly, this is something that would be perceived as a actively malicious action by the customer. They see the company is engaging in unreasonable behavior at the behest of third parties that visibly and meaningfully worsens their experience relative to other ISPs. Our critical point from above is no longer true! This offers an opening for new competitors even if Comcast is able to unblock Google, because of the newfound ability for customers to compare services in practice. Compare this to slow speeds or high prices. These are not going to be seen as actively malicious and so the incumbent monopoly matching a competitor's prices is something that will be seen as a positive for the incumbent monopoly, as opposed to a non-negative. ---- So see how barriers to entry are not the fundamental problem here we can go reductio ad absurdum. Imagine we take something with very few barriers to entry - selling burgers. But let's apply so many rules and regulations that burgers become effectively identical -- same meat, same ingredients, same cooking, same standards of quality/freshness, same spices, etc, etc. You'd rapidly trend towards monopoly once again simply because the only way companies could compete would be on price and factors outside of the burger itself. But the biggest burger company would be capable of making burgers cheaper, faster, and more rapidly than anybody else - which means they would 'win', or be able to win if necessary, on every single competitive factor. In essence they become impossible to compete against and in simply trying to ensure high standards, you have created a monopoly. |