I think the current answers to your questions are fairly inadequate - so I'm going to give you a more nuanced answer.
> Is this not just competition working the way it's supposed to?
Yes. This is competition working exactly as you would expect it to in a free market: One company is a dominant supplier, and they are able to match rates for a new entrant. They are able to out compete this new company, and they will do so - more marketing, lobbying, cost matching (or undercutting), etc. They have the ability to beat the competition, and they will.
So everything is going exactly as you'd expect - except the points from the parents comment still apply: the consumers in this market are actually getting fucked - the price drop will be temporary, the competitor will be forced out of business and leave, and the total infrastructure investment in the area will go down.
This is what's termed "Market failure". The free market here operates in a way that doesn't increase the well being of all (or even most) participants.
So yes - this is just competition playing out as we'd expect in a free market, but instead of doing what it normally does in an area (force infrastructure updates, service improvements, cost reductions, and higher efficiency as companies compete - all good things) it's doing bad things. Why?
Well - this case is the literal textbook definition of a "Natural monopoly". It turns out that when competition appears, Bell is able to outcompete them not by actually improving, but by leveraging existing infrastructure and scale in a way that the startup company cannot.
The free market isn't making Bell better - they're not having to work any harder or improve. That's great for Bell, but pretty bad for everybody else.
So (at least in theory) we regulate this case of the free market, because we've seen that "normal competition" doesn't actually work here.
> Is this not just competition working the way it's supposed to?
Yes. This is competition working exactly as you would expect it to in a free market: One company is a dominant supplier, and they are able to match rates for a new entrant. They are able to out compete this new company, and they will do so - more marketing, lobbying, cost matching (or undercutting), etc. They have the ability to beat the competition, and they will.
So everything is going exactly as you'd expect - except the points from the parents comment still apply: the consumers in this market are actually getting fucked - the price drop will be temporary, the competitor will be forced out of business and leave, and the total infrastructure investment in the area will go down.
This is what's termed "Market failure". The free market here operates in a way that doesn't increase the well being of all (or even most) participants.
So yes - this is just competition playing out as we'd expect in a free market, but instead of doing what it normally does in an area (force infrastructure updates, service improvements, cost reductions, and higher efficiency as companies compete - all good things) it's doing bad things. Why?
Well - this case is the literal textbook definition of a "Natural monopoly". It turns out that when competition appears, Bell is able to outcompete them not by actually improving, but by leveraging existing infrastructure and scale in a way that the startup company cannot.
The free market isn't making Bell better - they're not having to work any harder or improve. That's great for Bell, but pretty bad for everybody else.
So (at least in theory) we regulate this case of the free market, because we've seen that "normal competition" doesn't actually work here.