What's Yours Is Mine: Open Access and the Rise of Infrastructure Socialism.

• Author: Liebowitz, Stan
• Position: Book Review

What's Yours Is Mine: Open Access and the Rise of Infrastructure Socialism By Adam Thierer and Clyde Wayne Crews Jr. Washington D.C.: Cato Institute, 2003 Pp. 100. $12.95 paperback.

What's Yours Is Mine is a small book that makes one basic point: government-mandated access to "essential facilities" is a bad idea. The authors, Adam Thierer and Clyde Wayne Crews Jr., hammer home their conclusion again and again as they lead us through the major industries where this type of regulation is becoming prevalent. Thierer and Crews perform a terrific service in tying together their theme for various disparate industries and in showing how the fallacious reasoning that underlies this type of regulation manifests itself in different circumstances.

The industries they cover range from telephony and broadband services--the industries where "must-carry" rules are most frequently found--to cable television and computer-operating systems, industries not usually associated with must-carry provisions.

Must-carry provisions require the owners of assets to make those assets--deemed to be unique or too costly or wasteful to duplicate--available to others at a supposedly competitive price. For example, a local telephone company's facilities have been viewed as a "natural monopoly," so it is believed that duplication of the infrastructure would be wasteful. As the authors point out, historically this identification has meant that in return for a monopoly grant from the state, telephone companies normally have been regulated in the rates they may charge consumers.

Direct service line (DSL) broadband services require the use of local telephone lines going into homes and businesses. Government regulators would like DSL service to be provided competitively. In an attempt to graft some form of competition onto a regulated monopoly regime, the concept of open access has been created. Various Internet service providers (ISPs) are allowed to use the local phone company's facilities in order to have "competition" in DSL provision. Obviously, if the ISPs were willing to pay a sufficient price, they might purchase use of the telephone lines. Regulators, however, do not want to let the market work out these issues, fearing that the incumbent will have too great an advantage over newcomers. Thus, under this open-access scenario, the government must also control the prices that the incumbent can charge newcomers. This regulatory removal of typical ownership fights explains the...