Economics of Monopoly Power Take a Position Essay

Economics of Monopoly Power

Take a position regarding whether the current initiatives of the FCC actually encourage competition in all communication markets and protect the public. Provide specific examples to support your response.

The FCC has over the years been involved in various initiatives to ensure that there is fairer play and a leveled field for the operation of the communication companies in the U.S.A. Though some may point fingers that the FCC has played lip service to the idea of encouraging competition for long, it is apparent that several efforts by the FCC has ensured a more competitive environment especially in the broadband provision.

The reason why the U.S.A. lags behind many countries in the broadband aspect in particular is the fact that there is a stunning lack of competition in this market. It is noticeable that there are a few players who dominate the market and all the time they seem to consolidate their monopoly rather than opening up new competition. This freezing competition comes with the decreasing competition, there seems to be a disappearing urgency to expand the broadband (Mike Masnick, 2011). It is in light of the realization that competition drives broadband that FCC has engaged in many endeavors including the latest initiative of "connect2compete" with a sole aim of taking the internet to every single person out there.The aim of the connect2compete project is to ensure that the millions of families that are not able to afford the exorbitant rates of up to $150 per month are able to access internet at a subsidized price of $10 per month. As if this was not enough, there is an additional benefit of buying a netbook or a PC at prices that are less than $150 with digital literacy opportunities also availed by the FCC (JSI Capital Advisors, 2011). This can be termed as one of the biggest steps that the FCC has ever taken in a bid to encourage competition since the other players will also want to drop their prices more and make it more affordable for the average American.

2) Imagine a single organization with a complete monopoly on all post-secondary education and discuss the likely economic impact.

In the event as above, this would be equated to the natural monopolies that exist in the market. Such a monopoly on the means of provision of education without a possibility of another competitor will mean that the proprietor will have the leeway to charge exorbitant service fees without caring about what the clients feel of such fees. Apart from this economic impact, it will also mean that the clients will not be getting value for their service since….....