4 ms·

"absolutely disastrous"? I am 44 years old, which means I remember growing up at a time when you were not allowed to own a telephone -- because AT&T exercised

by jblow 10y ago

"absolutely disastrous"? I am 44 years old, which means I remember growing up at a time when you were not allowed to own a telephone -- because AT&T exercised its corporate monopoly to control what you could plug into your AT&T phone line, and they would only permit that to be an AT&T phone, and they would not ever sell you an AT&T phone, they would only rent you one at an exorbitant price. And they didn't bother to provide you any variety in models, because why would they? There's one phone, that is what you get. Also, if you wanted to call someone in a different area code, then I hope you are ready to shell out some cash... If it weren't for state-exercised power, it is quite possible that things would still be this way. I do not consider today's situation a disaster at all, relatively speaking. (For sure there are still many un-ideal things about it.)

duncan_bayne 10y ago
How did AT&T come by their monopoly in the first place? IIRC it was a crony deal with the State that established it in the first place.
- jblow 10y ago
  It's a complex history, but it started with the government's prevention of what would have been an even bigger monopoly. https://en.m.wikipedia.org/wiki/Kingsbury_Commitment https://en.m.wikipedia.org/wiki/Kingsbury_Commitment But for the most part, it is just that AT&T kept buying smaller companies, which is just what happens in capitalism when one party starts to win, which is why checks on capitalism are necessary.
  - maloney 10y ago
    Here is an in depth look into how the state prevented competition in regards to AT&T. http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/1994/11/cj14n2-6.pdf http://object.cato.org/sites/cato.org/files/serials/files/ca... In no way is the free market responsible for the AT&T monopoly.
    - duncan_bayne 10y ago
      Some Austrians (e.g. Rothbard) argue that monopolies as we understand them are actually impossible without State action. https://mises.org/library/austrian-monopoly-theory-%E2%80%94-critique https://mises.org/library/austrian-monopoly-theory-%E2%80%94...
      - Retric 10y ago
        And some people are flat out wrong. Monopolies at the local level are very common historically. Small towns would have 1 blacksmith for example as there was not enough work for 2 and transportation was prohibitive.
        webXL 10y ago
        What's the problem then if there's not enough work for 2? You're close to a barter economy at that point. The blacksmith can't gouge the customers he depends on for everything else.
        Retric 10y ago
        Individual sales matter less to the blacksmith than their customers. So, they might not gouge their customers but padding bills is common behavior after all selling 10% less at 20% higher profit is a net gain. Consider how important the internet is to you vs an extra 20$ a month in profit is for a multi billion dollar company.
        StudyAnimal 10y ago
        Its not padding though. Its picking the right business where the market will accept higher margins than usual.
        azernik 10y ago
        This is not a moral judgment. It is simply the seller doing what is in their best interest, just like they would in a competitive market. The difference is that in a competitive market, this self-interest happens to lead producers to do what is in the public interest, but in the monopoly case it generally leads to lower production and higher prices than would be optimal. For more explanation, here's a Wikipedia article that jibes with my college Intro to Econ class: https://en.wikipedia.org/wiki/Monopoly_price https://en.wikipedia.org/wiki/Monopoly_price
cookiecaper 10y ago
To resolve the matter of being unallowed to plug anything non-AT&T into AT&T phone lines, you can just make a law stating that anything that can operate compatibly on the network is allowed to participate, something that allows consumers to bring their own device. You don't have to have utility-style control, nor do you have to break up the company, to resolve that particular issue.
- hughw 10y ago
  Or, rather than be bothered passing a law for every possible case, Congress can delegate rule making authority to an agency like the FCC, which develops technical expertise in the domain.
- ethbro 10y ago
  This is exactly what happened because of the FCC in 1968. https://en.m.wikipedia.org/wiki/Carterfone https://en.m.wikipedia.org/wiki/Carterfone
  - josh2600 10y ago
    I was about to post this and say that the parent comment does not remember this because it happened 4 years before their birth.
    - jblow 10y ago
      The Carterfone was an early exception because of its functionality.
    - ethbro 10y ago
      Tbh, it happened a number of years before my birth as well, but some of us choose to learn the history of computation / networking. ;-)
  - narrowrail 10y ago
    If anyone else wants to know the significance of this device, it allowed for the argument to be made that any device should be able to be connected to the network, provided it did not interfere with it. It paved the way for non-AT&T equipment. The FAX and answering machines were allowed as a result (many people/industries still cling to these ideas; they are the reason voicemail hasn't gone the way of the dinosaur). Skype used it in '07 to "petition for rulemaking was filed with the FCC by Skype, requesting the FCC to apply the Carterfone regulations to the wireless industry—which would mean that OEMs, portals and others will be able to offer wireless devices and services without the cellular operators needing to approve the handsets. However, on 1 April 2008, FCC chairman Kevin Martin indicated that he would oppose Skype's request.[3]"

by jblow 10y ago

duncan_bayne 10y ago

How did AT&T come by their monopoly in the first place? IIRC it was a crony deal with the State that established it in the first place.

jblow 10y ago
It's a complex history, but it started with the government's prevention of what would have been an even bigger monopoly. https://en.m.wikipedia.org/wiki/Kingsbury_Commitment https://en.m.wikipedia.org/wiki/Kingsbury_Commitment But for the most part, it is just that AT&T kept buying smaller companies, which is just what happens in capitalism when one party starts to win, which is why checks on capitalism are necessary.
- maloney 10y ago
  Here is an in depth look into how the state prevented competition in regards to AT&T. http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/1994/11/cj14n2-6.pdf http://object.cato.org/sites/cato.org/files/serials/files/ca... In no way is the free market responsible for the AT&T monopoly.
  - duncan_bayne 10y ago
    Some Austrians (e.g. Rothbard) argue that monopolies as we understand them are actually impossible without State action. https://mises.org/library/austrian-monopoly-theory-%E2%80%94-critique https://mises.org/library/austrian-monopoly-theory-%E2%80%94...
    - Retric 10y ago
      And some people are flat out wrong. Monopolies at the local level are very common historically. Small towns would have 1 blacksmith for example as there was not enough work for 2 and transportation was prohibitive.
      - webXL 10y ago
        What's the problem then if there's not enough work for 2? You're close to a barter economy at that point. The blacksmith can't gouge the customers he depends on for everything else.
        Retric 10y ago
        Individual sales matter less to the blacksmith than their customers. So, they might not gouge their customers but padding bills is common behavior after all selling 10% less at 20% higher profit is a net gain. Consider how important the internet is to you vs an extra 20$ a month in profit is for a multi billion dollar company.
        StudyAnimal 10y ago
        Its not padding though. Its picking the right business where the market will accept higher margins than usual.
        azernik 10y ago
        This is not a moral judgment. It is simply the seller doing what is in their best interest, just like they would in a competitive market. The difference is that in a competitive market, this self-interest happens to lead producers to do what is in the public interest, but in the monopoly case it generally leads to lower production and higher prices than would be optimal. For more explanation, here's a Wikipedia article that jibes with my college Intro to Econ class: https://en.wikipedia.org/wiki/Monopoly_price https://en.wikipedia.org/wiki/Monopoly_price

cookiecaper 10y ago

To resolve the matter of being unallowed to plug anything non-AT&T into AT&T phone lines, you can just make a law stating that anything that can operate compatibly on the network is allowed to participate, something that allows consumers to bring their own device. You don't have to have utility-style control, nor do you have to break up the company, to resolve that particular issue.

hughw 10y ago
Or, rather than be bothered passing a law for every possible case, Congress can delegate rule making authority to an agency like the FCC, which develops technical expertise in the domain.
ethbro 10y ago
This is exactly what happened because of the FCC in 1968. https://en.m.wikipedia.org/wiki/Carterfone https://en.m.wikipedia.org/wiki/Carterfone
- josh2600 10y ago
  I was about to post this and say that the parent comment does not remember this because it happened 4 years before their birth.
  - jblow 10y ago
    The Carterfone was an early exception because of its functionality.
  - ethbro 10y ago
    Tbh, it happened a number of years before my birth as well, but some of us choose to learn the history of computation / networking. ;-)
- narrowrail 10y ago
  If anyone else wants to know the significance of this device, it allowed for the argument to be made that any device should be able to be connected to the network, provided it did not interfere with it. It paved the way for non-AT&T equipment. The FAX and answering machines were allowed as a result (many people/industries still cling to these ideas; they are the reason voicemail hasn't gone the way of the dinosaur). Skype used it in '07 to "petition for rulemaking was filed with the FCC by Skype, requesting the FCC to apply the Carterfone regulations to the wireless industry—which would mean that OEMs, portals and others will be able to offer wireless devices and services without the cellular operators needing to approve the handsets. However, on 1 April 2008, FCC chairman Kevin Martin indicated that he would oppose Skype's request.[3]"