18 ms·

Want to rescue rural America? Bust monopolies

417 points by avyfain 9y ago

DroidX86 9y ago
First things first: ISPs
- trafficlight 9y ago
  I feel you. I started a small ISP in Montana a few years ago. We're getting into laying our own duct and fiber. Once I get the machine running, I want to focus on providing tools and information to others looking to do the same thing. I've been running a Slack channel called ISP School for about a year now to bring together other interested people. Email me at matt@tsi.io if anybody wants an invitation.
  - pyvpx 9y ago
    is TSI a CLEC?
    - trafficlight 9y ago
      Nope. We argued that we were providing data services under the FCC definition of utility. The only real person who got in our way was the city attorney. He said that internet didn't qualify as Montana Code (circa 1950) only mentioned telephone and telegraph. So we registered with the PSC as a telegraph provider...
      - MichaelGG 9y ago
        Awesome. Do you actually have to sell telegram services?
        trafficlight 9y ago
        Legally, I don't think so. But we did build a little Raspberry Pi based machine with a telegraph key. It needs some more work, but there are people who are legitimately wanting to buy the service.
        neuland 9y ago
        There are people that want to buy telegraph service?
        trafficlight 9y ago
        Surprisingly yes. I think it falls into two categories: nostalgia and hipster.
      - tetha 9y ago
        I mean you have telephony via IP, and I'm sure there's an RFC to telegraphy via IP. So it's not wrong to say you're providing telegraphy. You're just choosing a very ... deep and expensive tech stack to do so.
      - pyvpx 9y ago
        I was going to ask about the telegraph part of the name...hah. very interesting!
- pyvpx 9y ago
  that's easy -- de-privatize the last mile access networks. run (copious strand count) fiber to everything, lease at standard pricing for every entrant, with operations & maintenance (and plant depreciation) built in. done.
  - trafficlight 9y ago
    I think the hardest thing about a municipal network like that is having a government organization competent in managing it. Streets are still mostly functional with potholes, but a network certainly isn't. We're operating on a brand new municipal network right now and it's not awesome. In an effort to be fair to all parties, no one is actually in charge. The network operator is separate from the construction contractor who is separate from the bandwidth providers. It's extremely frustrating.
    - greglindahl 9y ago
      Where I live, the local government runs the last-mile powerline stuff. It appears to be as competent at it as any other place I've lived.
- rhino369 9y ago
  Even monopolies don't want to built networks in rural america. I can't imagine multiple competitors doing it. It was the monopoly power of AT&T that got them phone lines in the first place.
bko 9y ago
> In 1994, at the height of the AIDS crisis, in which I lost several friends and a beloved employee to the disease, I started a manufacturing company in Little Elm, about 35 miles north of Dallas, to produce the first-ever automatically retracting syringe to eliminate the risk of nurses contracting HIV through accidental needle sticks. The syringe received rave reviews from nurses, hospital executives and public health officials, a major grant from the National Institutes of Health and robust private investment. But when my partners and I tried to sell it to hospitals, we were told time and time again that even though it was a better product — a lifesaving product — they weren’t able to purchase it. The primary supplier of syringes, which controlled 80 percent of the market, structured an arrangement with a vast network of hospitals that essentially closed our industry to new firms for good. That last bit sentence me a bit odd. Rather than go into the details of incentives of hospitals and why they would forgo a better alternative, the author just attributes it to "monopoly". If this is true, there is some deeper misalignment with incentives in this industry that won't go away by just removing product providers that control a significant portion of the market. Or something that the author doesn't know about the industry that would make this decision make sense.
- Retric 9y ago
  Monopoly says you buy 100% of your products from us at 50% discount or 99% of your products from us at full price. Now someone is offering a better product but just that one product, so even if it was free your prices go up. See Intel discounts for avoiding AMD, or Microsoft discounts for avoiding Linux, or ... What do you do?
  - bko 9y ago
    Your hypothetical scenario is suggesting that there are no alternative for 99% of the monopoly provider's products and only a better alternative from the 1%? No alternatives for the 99% even with a 50% markup (50 discounted vs 100 full price)? In that case, the buyer is much better off with a 50% discount on 99% of the products since no alternative exists, even at the 100 full price.
    - 9y ago
cs702 9y ago
"I started a manufacturing company in Little Elm, about 35 miles north of Dallas, to produce the first-ever automatically retracting syringe to eliminate the risk of nurses contracting HIV through accidental needle sticks. The syringe received rave reviews from nurses, hospital executives and public health officials, a major grant from the National Institutes of Health and robust private investment. But when my partners and I tried to sell it to hospitals, we were told time and time again that even though it was a better product — a lifesaving product — they weren’t able to purchase it. The primary supplier of syringes, which controlled 80 percent of the market, structured an arrangement with a vast network of hospitals that essentially closed our industry to new firms for good." A market in which buyers are not free to choose better products is not a free market. A market in which new entrants cannot compete fairly against established players is not a free market. A market in which innovators have to get permission and pay established players for "access" (think ISPs) is not a free market. And yes, a market in which economic and political power is concentrated in large corporations geographically clustered in a handful of giant metropolitan areas... is also not a free market. Those corporations have both strong incentives and the means to change the rules of competition to their advantage.
- thriftwy 9y ago
  Not the first time this story is on HN. I always wondered - why focus on selling to American hospitals which could not care less? If the problem is universal, pitch to elite European hospitals, especially Swiss. They cater for rich patients from all around the world and if it's a good idea they'll definitely be interested. Later on, when it catches, American hospitals will come to you too. Or maybe you will find that European hospitals has already figured this out in some way. Tough story, then.
  - leakybit 9y ago
    Why even bother with hospitals and there bureaucracy. They could pitch it to doctors offices and the end users, like diabetics.
    - thriftwy 9y ago
tanderson92 9y ago
Highly relevant: Matt Stoller in The Atlantic: "How Democrats Killed Their Populist Soul In the 1970s, a new wave of post-Watergate liberals stopped fighting monopoly power. The result is an increasingly dangerous political system." https://www.theatlantic.com/politics/archive/2016/10/how-democrats-killed-their-populist-soul/504710/ https://www.theatlantic.com/politics/archive/2016/10/how-dem...
- jessaustin 9y ago
  This really opened my eye: a long time ago, there was actually a meaningful difference between voting D and voting R. I can't really imagine voting in such a context, but it sounds nice...
  - aaronbrethorst 9y ago
    How can you call LGBT rights, women's rights, police consent decrees, environmental issues, and health care, just off the top of my head, meaningless?
    - rndmize 9y ago
      Not the GP, but these are social issues largely, and while I care about them, I consider them less important than economic issues (for a multitude of reasons). And on economic/business issues, the two parties seems to have minimal differences.
      - skadamat 9y ago
        This is a somewhat relevant read - https://medium.com/@jamesallworth/the-slow-decay-of-americas-entrepreneurial-society-f9aeb6145891 https://medium.com/@jamesallworth/the-slow-decay-of-americas... Basically discussed shift from discussion in politics about democracy to economics.
      - whopa 9y ago
        Health care is squarely an economic/business issue that affects nearly everybody, and there are clear, meaningful differences between the two parties here.
douche 9y ago
Or make it profitable to build shit in this country again. If you taxed the hell out of manufactured imports, and loosened up the regulations that are choking US businesses to death, you'd have less meth-and-fentanyl scourged abandoned mill towns.
- ghouse 9y ago
  Which specific regulations do you think are choking US businesses to death? I see a lot of handwaving about oppressive regulation, but I don't see anything careful cost-benefit discussion of which regulations are oppressive.
  - douche 9y ago
    You've never worked in a blue-collar industry, then. It's a death by 1000 cuts. When your workers are frustrated by the amount of red tape and regulation surrounding their day to day work tasks, something is wrong.
    - Pica_soO 9y ago
      Every factory, the explanation hours for the kindergarden- do not jump, do use the stairwell rails, do read all the rules, do not use the robots for rodeo. And if you complain about the stupidness of regulations, the responsibility shysters barricading proclaim you hysteric or careless. My personal favorite is lumber-work, where in some of the heavy duty protection equipment you are supposed to wear is so heavy, people make exhausted stupid mistakes and get injured because of the security measure. Example references the Kevlar jackets and trousers- lately partially replaced by lighter plastic protection gear. The worst part is - some regulations introduce routine- and routine kills. There are good examples, like the Japanese railroad signal system though, so its not all bad.
  - valuearb 9y ago
    Land use planning, eminent domain, employee regulations, tax regulations, etc, etc, etc. Where do you want to start?
peacetreefrog 9y ago
Her two examples, the medical and agriculture sectors, are two of the most regulated industries around. A lot of these "monopolies" result because of regulation pushed by combination of well-meaning and self interested people and corporations (see bootleggers and baptists). Her examples suggest it'd be better to focus on the marriage between corporations and government, which allows companies to focus their energy on getting gov to hassle their competitors vs improving their own product. https://en.wikipedia.org/wiki/Bootleggers_and_Baptists https://en.wikipedia.org/wiki/Bootleggers_and_Baptists
- lawrencewu 9y ago
  I don't know why you are getting downvoted because you're absolutely right. The first three markets named (airlines, telecommunications, health care) are all heavily regulated and the barrier to entries are controlled by the government, not natural market forces. Monopolies are not all bad. Sometimes a company has a monopoly because they just offer a better product (Amazon, Google) and they shouldn't be punished for that, especially when there's no government intervention that exists to protect them.
  - peacetreefrog 9y ago
    Yeah, and it's debatable whether -- in these cases -- the monopolies would exist if it weren't for this regulation. The health care market is extremely distorted, and that's definitely true in the case of agriculture: http://www.nytimes.com/2013/07/20/business/richer-farmers-bigger-subsidies.html http://www.nytimes.com/2013/07/20/business/richer-farmers-bi...
  - backtoyoujim 9y ago
    Amazon is a infested with scam storefronts. And Amazon is really compelled to do anything about it because they have no competition. Airlines have huge market barriers: getting and maintaining huge, expensive, gas guzzling aircraft. That is not a regulation barrier. Both telecomm and health care are intwined monopsonies backing the play of regional monopolies (cartels) backing federal congresspeople. I just don't buy any of your comment as fact at all.
hammock 9y ago
I wonder if, without monopolies, rural areas would be served at all with the types goods and services that these companies bring them. It might not be economically feasible!
ChuckMcM 9y ago
I largely agree with the observations in the article although I believe the author misstates the intention of government with "But in the 1980s, folks in power decided bigger was better, and conventional political wisdom followed suit." The issue with the 80's was that the US economy was in a very weird place where we had low growth and very high inflation (called 'stagflation' at the time). The mechanics of the economy were adjusted not to make 'bigger better' but instead to break out of the state of stagnant inflation. That the changes weren't undone in the 90s when much of the economic forces were re-aligned was a problem, but understandable since nobody wanted to go back to that mode. We are living in the opposite local minimum of growth and deflation where the economy is growing but inflation isn't happening because real income is going down. That said I believe that making single supplier contracts unenforcable would be an interesting change to try.
- maxerickson 9y ago
  What if the burst of growth in the 90s could be attributed to the inflation in the 80s? That'd be pretty unfortunate, if the low inflation mandate of the fed kept inflation below some inflection point where economic growth is more likely.
- yuhong 9y ago
  This was just after US got off the gold standard, and around the time of the savings and loans crisis. More recently, Medicare and drug prices is one of my favorite examples, and the same logic apply to things like the NSA.
  - ChuckMcM 9y ago
    A fair point. Missing the connection to the NSA though :-) And repeating that I agree with the basic premise that single supplier contracts should be made unenforcable however to do that you have to provide a way to penalizing companies that do things to enforce them.
    - yuhong 9y ago
      The point is that the NSA is funded by government debt, which is their way of printing money. One of the reasons why we got off the gold standard is government spending.
michaelbuckbee 9y ago
Multiple other comments in here about this particular niche that the subject of the story went into (medical supplies), but what came to mind to me was a similar story about how it's a similar situation with the golf ball market [1] and from many other stories with eyeglasses (Luxottica artificially dominates the market). These are both cases where it's not so much anti-merger/monopoly law that's the culprit, but the general structure of the legal system that favors those with the larger pockets and forces out upstart manufacturers. 1 - http://www.golfdigest.com/story/ball-wars-costco-files-lawsuit-against-acushnet http://www.golfdigest.com/story/ball-wars-costco-files-lawsu...
- valuearb 9y ago
  Patents are government monopolies created to incentivize inventors to share their inventions so others could build upon them. The fear was they'd hide their IP behind factory walls and innovation would be slow. Now patents are used by those who don't make anything and often don't even invent anything in order to blackmail those who do.
  - flyingfences 9y ago
    "Intellectual Property" is the use of the State's violence in an attempt to enforce an artificial scarcity upon something that is naturally non-scarce - information. It is inherently antithetical to a free society and always ends up hurting the everyman (and society at large) in the long run.
    - untangle 9y ago
      When I hear "IP" I now perceive "rent." Rent is drag and is a prime mover in income inequality.
      - flyingfences 9y ago
        The two are not at all alike, though. Rent is payment made in exchange for the use of a physical, scarce resource. Information, in contrast, is inherently non-scarce.
mrgreenfur 9y ago
Does anyone else think that nearly all huge companies exist due to monopolies or near-monopolies? MS has monopoly on desktops. Apple on cell phones and tablets. Facebook on social networking. Google on search. I think any market without at least 3-4 strong competitors will devolve into one dominant player who can milk more from the customer base.
- adventurer 9y ago
  Aside from 2008-9ish where they had around 50% and Blackberry was king, Apple has had a very small share of the mobile phone market. There is a myriad of competitors. The tablet share is up there but not to facebook or ms windows levels of having almost no competition.
- EduardoBautista 9y ago
  Android has a higher market share than iOS. How does that make Apple a monopoly?
  - mrgreenfur 9y ago
    Fair point.
  - bluejekyll 9y ago
    They definitely have a monopoly in my house...
  - paulddraper 9y ago
    A more apt comparison would be Apple (iOS) vs Samsung (Android) vs LG (Android) vs Motorola (Android). And Apple has the most mobile device profits. Still, I agree: nowhere near a monopoly.
- stinkytaco 9y ago
  Part of the issue here is defining "market" and their scope. MS has a monopoly on desktops, but how much impact does that have with people increasingly shifting off the desktop? How do you define Facebook's market? If it's "social media" does that include blogging? twitter? email?
jackmaney 9y ago
Rural America is primarily responsible for electing Trump. Let them rot.
daodedickinson 9y ago
Where are the trust-busting candidates?
MichaelBurge 9y ago
They need to deregulate the entire medical industry, so anyone can start a medical practice. Right now, doctors control the supply of new medical licenses, and they're incentivized to restrict the supply so their own wages go up. The official line is that they can ensure high-quality medical treatments this way, but that's just something they tell themselves to feel good about it. One of the consequences is that doctors are beholden to large corporations who have teams of lawyers to handle legal issues and malpractice lawsuits. Since there are limited slots, some of them even work in foreign countries until they get experience to land a job in the US, which is a waste of talent. If anyone could start a medical practice, a new syringe company could sell to smaller practices that haven't yet been mired in enterprise contracts. Right now, in order to even build a hospital you have to submit "evidence of need" to the government to get approval. Imagine if every startup had to convince a bureaucrat that they were needed: fewer people would be interested in starting one. It's probably worth considering moving medical negotiations from insurance companies and employers to the consumer. I don't know that it's very common to call up multiple doctors and find the one with the lowest price, because you're paying your insurance company to do the negotiation for you. Taxing employer-provided health insurance as income might remove the incentive for them to provide it at all. Together with deregulating the entire medical industry, it would make it possible to buy cheap treatment without insurance, which might be enough to make insurance less important.
- maxerickson 9y ago
  There's an awful lot of middle ground between what we have now and "anyone can start a medical practice".
  - MichaelBurge 9y ago
    If I'm reading you right, you're worried about e.g. some crackpot calling himself a doctor who rubs moonstones on an infection to make the evil spirits go away. An unfortunate consequence of "anyone can start a medical practice" is that the crackpot would be allowed to operate, but the negative aspects could be mitigated by: * Somebody starting a "Yelp for doctors" * The government could give some approval stamp to doctors using all the existing restrictions, and you could always ask a doctor "Are you XYZ-approved?" It would be a very serious crime for a moonstone-carrying crackpot to lie about his governmental approval, and his status could be verified on a government website. People who solely use government-approved doctors would still benefit, since licensed doctors would still be competing against unlicensed doctors, so there'd be a limit to how much the government policy could distort the market. * People who repair your sidewalk or furnace often advertise "licensed, bonded, and insured". A furnace can burn your house down, which seems a similar risk to medical malpractice. You could ask your doctor if he's licensed by the government, has put his personal capital into a bond, and is insured.
arca_vorago 9y ago
But our savior Peter Theil said monopolies are good and the thing every company wants to become!
costcopizza 9y ago
Drive through many American small towns and it looks the exact same. A strip mall with a Subway, a couple national fast food joints, and if you're big enough, Wal-Mart. There are literally 1000s of towns with this copy and paste setup-- how could this not be detrimental when money is going to a huge corporation every time?
- heyoni 9y ago
  Object-oriented economy. Rather than reusing code, we reuse business plans!
  - mauvehaus 9y ago
    If you haven't read Snow Crash by Neal Stephenson, he refers to people doing just that (reusing proven business plans) as three-ringers. I.e. people who got their business plan in a 3-ring binder, and are implementing it without much in the way of critical thinking about why it works or ambition to do much beyond implementing it.
- Sacho 9y ago
  Okay, let's replace Wal-Mart with a bunch of local businesses, and assume they both manage to get their work done with the same amount of workers and pay the same salaries. In that case, Wal-Mart actually seems to provide a benefit to the community - its reduced prices from economies of scale benefit all consumers, while the wealth generated by local businesses is concentrated in the business owners and only trickles down to the rest of the community if they choose to invest it there. In order for Wal-Mart to be detrimental you would need to evaluate these factors: - What is the percentage of local business owners among the populace that you are aiming for? You would want a majority/large minority of people to be business owners to reap the wealth benefits, but in Wal-Mart's case you're essentially transferring wealth from the poor strata to a new middle-to-high class strata of business owners. - Can local businesses employ more local community members and pay better wages? This is a possibility if you assume Wal-Mart is pocketing huge profits for themselves, which altruistic business owners would instead redistribute among the community in the form of wages. This expectation does not mesh with my experience but I don't know if there's any study on this, maybe I'm wrong. - Can you evaluate whether the huge corporation is pocketing more money from your community than a collection of local businesses? While the huge corporation may make tons of money, what is the profit they extract from just your community, and how would it compare when replaced with local business? Obviously, you would allow for some leeway since at least the profits are going to some members of your community. - Would consumers be willing to take a hit to their standard of living in order to support local businesses? I'm skeptical, as even in the entrepreneurial-friendly US(expected higher number of business owners per capita?) the rise of corporations has been eradicating local business.
dreamdu5t 9y ago
The article never establishes what is wrong with rural America in the first place. Why does it need rescuing? Why are businesses with large market share a problem for rural America? The premise that monopolies are bad is never explained. The author never establishes any of this. How did this make it to the front page?
- wallacoloo 9y ago
  > The article never establishes what is wrong with rural America in the first place. She presented numbers related to how many new businesses were formed recently in small towns vs large towns. Sure, she didn't go through the hoops to explain that more new businesses = more new jobs = more local wealth, but would that have even contributed to the article? > The premise that monopolies are bad is never explained. The article did attempt to explain this through an anecdote about a superior syringe being blocked off the market by another company that held a monopoly on medical devices & arranged contracts with buyers to lock them in. Maybe she should have been more explicit - and I'm not trying to say that the article's good material for HN - but she did at least touch on most of those points.
- deleted 9y ago
  [deleted]
iddan 9y ago
No! Rural America is responsible for the death of millions, Rural America is the responsible for holding the progression of human race and most important: rural America is who created the monopolies. Free market can only exist where states aren't.
hackbinary 9y ago
Welcome to the new world of corporate mercantilism. https://en.wikipedia.org/wiki/Mercantilism https://en.wikipedia.org/wiki/Mercantilism
- valuearb 9y ago
  Mercantilism is how capitalism dies. Self interested capitalists buy monopolies from politicians until no free markets remain. Today we have Trump favoring Coal, Oil, military contractors, the Sands corporation (Sheldon Adelson) and corporations searching for special favors such as Tariffs, etc, because of their contributions to his campaign. Hilary would have favored Wall Street banks, hedge funds, "green companies" in search of federal handouts, unions, etc. We have the political system we have because of massive contributions by moneyed players who want either handouts or rules to keep competitors out.
rdlecler1 9y ago
Arguably this also affects workers in major centers who have to move to high-cost housing areas just to be employed while not materially improving quality of life.
charlieflowers 9y ago
This is behind many (maybe most) of our problems in America. For example, this is the biggest source of what's wrong with our healthcare system. Businesses have built up "moats" throughout the system, leading to high prices and poor service. This is the source of the "cost disease" that makes our healthcare too expensive. Competition is part of the very foundation of capitalism. Without it, capitalism itself doesn't work. So we better figure out some answers.
perakojotgenije 9y ago
Well that's deregulated capitalism 101.
teslaberry 9y ago
yea how about busting up amazon.
wirerc 9y ago
Rural America could bust monopolies tomorrow if they voted differently. They've done it before, and they don't need to be rescued by us for that. More like they need to rescue themselves and the rest of us.
- FireBeyond 9y ago
  Mmhmm. This is the same Rural America that thumps its chest proudly at how the Electoral College pulls power in the US away from major population centers and "into the heartland" (witness Trump). And yet it's our jobs to bail Rural America out?
- vacri 9y ago
  Unfortunately voting differently also means voting for social change in other areas, which rural populations usually aren't eager for.
jondubois 9y ago
Most 'monopolies' that exist today are artificial - This is because they are only monopolies to the extent that they are able to: 1. Keep buying up advertising to make sure that any potential competitor cannot afford eyeballs. 2. Keep hiring up as much technical talent as possible to make sure that any potential competitor doesn't get access to that talent in order to build a competing product. 3. Keep subsidising the cost of their own services (at a loss to themselves) in order to make the market non-viable for any potential competitor. It's a scorched-earth approach. Any company that has the money can create an artificial monopoly for themselves by engaging in any of the three activities above. However, those activities are increasingly expensive because they drive up advertising costs and engineer salaries. If companies keep doing this, eventually, they'll make the market non-viable even for themselves.
Overtonwindow 9y ago
Oh you mean like Comcast?
geff82 9y ago
As someone who loves rural USA and especially Texas, how could we spread the word better? How could we make it more attractive? Do you think there are other possibilities to revive it besides changing government policies? Let us brainstorm about it!
cmurf 9y ago
Most legislation, counted in line or pages, is written by industry. Legislators aren't writing this themselves. And there's little in the way of taking a strong anti-trust (competition law) in politics. The Obama administration watched over, and permitted mergers that very blatantly reduce competition: multiple airlines, and drug companies. And it was more aggressive overall in applying competition law compared to previous Republican administrations. So, point is, even with a Democratic president, competition law isn't pressed strongly enough, let alone with a Republican in office where it's apparently "we need to recognize more natural monopolies, and help them whenever possible". About the only thing all Americans might be able to agree on when it comes to politics, is the increasingly obvious need for a constitutional amendment getting money out of politics.
throwaway73363 9y ago
Apparently this is true not only of the US but also of Japan. I just finished watching a nice dram series called 'Shitamachi Rocketto' which might be of interest to folk on HN.
dingo_bat 9y ago
If a monopoly is hard-won and not being abused, what's the problem?
eecc 9y ago
I found this book rather interesting: https://en.wikipedia.org/wiki/Monopoly_Capital https://en.wikipedia.org/wiki/Monopoly_Capital it reflects over essentially the same problem (to make a Marxist critique to capitalist pretenses of freedom, fairness and its claims to optimality.) Among other points, the book spends time arguing how Corporate Capitalism is fundamentally monopolistic.

417 points by avyfain 9y ago

DroidX86 9y ago

First things first: ISPs

trafficlight 9y ago
I feel you. I started a small ISP in Montana a few years ago. We're getting into laying our own duct and fiber. Once I get the machine running, I want to focus on providing tools and information to others looking to do the same thing. I've been running a Slack channel called ISP School for about a year now to bring together other interested people. Email me at matt@tsi.io if anybody wants an invitation.
- pyvpx 9y ago
  is TSI a CLEC?
  - trafficlight 9y ago
    Nope. We argued that we were providing data services under the FCC definition of utility. The only real person who got in our way was the city attorney. He said that internet didn't qualify as Montana Code (circa 1950) only mentioned telephone and telegraph. So we registered with the PSC as a telegraph provider...
    - MichaelGG 9y ago
      Awesome. Do you actually have to sell telegram services?
      - trafficlight 9y ago
        Legally, I don't think so. But we did build a little Raspberry Pi based machine with a telegraph key. It needs some more work, but there are people who are legitimately wanting to buy the service.
        neuland 9y ago
        There are people that want to buy telegraph service?
        trafficlight 9y ago
        Surprisingly yes. I think it falls into two categories: nostalgia and hipster.
    - tetha 9y ago
      I mean you have telephony via IP, and I'm sure there's an RFC to telegraphy via IP. So it's not wrong to say you're providing telegraphy. You're just choosing a very ... deep and expensive tech stack to do so.
    - pyvpx 9y ago
      I was going to ask about the telegraph part of the name...hah. very interesting!
pyvpx 9y ago
that's easy -- de-privatize the last mile access networks. run (copious strand count) fiber to everything, lease at standard pricing for every entrant, with operations & maintenance (and plant depreciation) built in. done.
- trafficlight 9y ago
  I think the hardest thing about a municipal network like that is having a government organization competent in managing it. Streets are still mostly functional with potholes, but a network certainly isn't. We're operating on a brand new municipal network right now and it's not awesome. In an effort to be fair to all parties, no one is actually in charge. The network operator is separate from the construction contractor who is separate from the bandwidth providers. It's extremely frustrating.
  - greglindahl 9y ago
    Where I live, the local government runs the last-mile powerline stuff. It appears to be as competent at it as any other place I've lived.
rhino369 9y ago
Even monopolies don't want to built networks in rural america. I can't imagine multiple competitors doing it. It was the monopoly power of AT&T that got them phone lines in the first place.

bko 9y ago

> In 1994, at the height of the AIDS crisis, in which I lost several friends and a beloved employee to the disease, I started a manufacturing company in Little Elm, about 35 miles north of Dallas, to produce the first-ever automatically retracting syringe to eliminate the risk of nurses contracting HIV through accidental needle sticks. The syringe received rave reviews from nurses, hospital executives and public health officials, a major grant from the National Institutes of Health and robust private investment. But when my partners and I tried to sell it to hospitals, we were told time and time again that even though it was a better product — a lifesaving product — they weren’t able to purchase it. The primary supplier of syringes, which controlled 80 percent of the market, structured an arrangement with a vast network of hospitals that essentially closed our industry to new firms for good. That last bit sentence me a bit odd. Rather than go into the details of incentives of hospitals and why they would forgo a better alternative, the author just attributes it to "monopoly". If this is true, there is some deeper misalignment with incentives in this industry that won't go away by just removing product providers that control a significant portion of the market. Or something that the author doesn't know about the industry that would make this decision make sense.

Retric 9y ago
Monopoly says you buy 100% of your products from us at 50% discount or 99% of your products from us at full price. Now someone is offering a better product but just that one product, so even if it was free your prices go up. See Intel discounts for avoiding AMD, or Microsoft discounts for avoiding Linux, or ... What do you do?
- bko 9y ago
  Your hypothetical scenario is suggesting that there are no alternative for 99% of the monopoly provider's products and only a better alternative from the 1%? No alternatives for the 99% even with a 50% markup (50 discounted vs 100 full price)? In that case, the buyer is much better off with a 50% discount on 99% of the products since no alternative exists, even at the 100 full price.
  - 9y ago

cs702 9y ago

"I started a manufacturing company in Little Elm, about 35 miles north of Dallas, to produce the first-ever automatically retracting syringe to eliminate the risk of nurses contracting HIV through accidental needle sticks. The syringe received rave reviews from nurses, hospital executives and public health officials, a major grant from the National Institutes of Health and robust private investment. But when my partners and I tried to sell it to hospitals, we were told time and time again that even though it was a better product — a lifesaving product — they weren’t able to purchase it. The primary supplier of syringes, which controlled 80 percent of the market, structured an arrangement with a vast network of hospitals that essentially closed our industry to new firms for good." A market in which buyers are not free to choose better products is not a free market. A market in which new entrants cannot compete fairly against established players is not a free market. A market in which innovators have to get permission and pay established players for "access" (think ISPs) is not a free market. And yes, a market in which economic and political power is concentrated in large corporations geographically clustered in a handful of giant metropolitan areas... is also not a free market. Those corporations have both strong incentives and the means to change the rules of competition to their advantage.

thriftwy 9y ago
Not the first time this story is on HN. I always wondered - why focus on selling to American hospitals which could not care less? If the problem is universal, pitch to elite European hospitals, especially Swiss. They cater for rich patients from all around the world and if it's a good idea they'll definitely be interested. Later on, when it catches, American hospitals will come to you too. Or maybe you will find that European hospitals has already figured this out in some way. Tough story, then.
- leakybit 9y ago
  Why even bother with hospitals and there bureaucracy. They could pitch it to doctors offices and the end users, like diabetics.
  - thriftwy 9y ago

tanderson92 9y ago

Highly relevant: Matt Stoller in The Atlantic: "How Democrats Killed Their Populist Soul In the 1970s, a new wave of post-Watergate liberals stopped fighting monopoly power. The result is an increasingly dangerous political system." https://www.theatlantic.com/politics/archive/2016/10/how-democrats-killed-their-populist-soul/504710/ https://www.theatlantic.com/politics/archive/2016/10/how-dem...

jessaustin 9y ago
This really opened my eye: a long time ago, there was actually a meaningful difference between voting D and voting R. I can't really imagine voting in such a context, but it sounds nice...
- aaronbrethorst 9y ago
  How can you call LGBT rights, women's rights, police consent decrees, environmental issues, and health care, just off the top of my head, meaningless?
  - rndmize 9y ago
    Not the GP, but these are social issues largely, and while I care about them, I consider them less important than economic issues (for a multitude of reasons). And on economic/business issues, the two parties seems to have minimal differences.
    - skadamat 9y ago
      This is a somewhat relevant read - https://medium.com/@jamesallworth/the-slow-decay-of-americas-entrepreneurial-society-f9aeb6145891 https://medium.com/@jamesallworth/the-slow-decay-of-americas... Basically discussed shift from discussion in politics about democracy to economics.
    - whopa 9y ago
      Health care is squarely an economic/business issue that affects nearly everybody, and there are clear, meaningful differences between the two parties here.

douche 9y ago

Or make it profitable to build shit in this country again. If you taxed the hell out of manufactured imports, and loosened up the regulations that are choking US businesses to death, you'd have less meth-and-fentanyl scourged abandoned mill towns.

ghouse 9y ago
Which specific regulations do you think are choking US businesses to death? I see a lot of handwaving about oppressive regulation, but I don't see anything careful cost-benefit discussion of which regulations are oppressive.
- douche 9y ago
  You've never worked in a blue-collar industry, then. It's a death by 1000 cuts. When your workers are frustrated by the amount of red tape and regulation surrounding their day to day work tasks, something is wrong.
  - Pica_soO 9y ago
    Every factory, the explanation hours for the kindergarden- do not jump, do use the stairwell rails, do read all the rules, do not use the robots for rodeo. And if you complain about the stupidness of regulations, the responsibility shysters barricading proclaim you hysteric or careless. My personal favorite is lumber-work, where in some of the heavy duty protection equipment you are supposed to wear is so heavy, people make exhausted stupid mistakes and get injured because of the security measure. Example references the Kevlar jackets and trousers- lately partially replaced by lighter plastic protection gear. The worst part is - some regulations introduce routine- and routine kills. There are good examples, like the Japanese railroad signal system though, so its not all bad.
- valuearb 9y ago
  Land use planning, eminent domain, employee regulations, tax regulations, etc, etc, etc. Where do you want to start?

peacetreefrog 9y ago

Her two examples, the medical and agriculture sectors, are two of the most regulated industries around. A lot of these "monopolies" result because of regulation pushed by combination of well-meaning and self interested people and corporations (see bootleggers and baptists). Her examples suggest it'd be better to focus on the marriage between corporations and government, which allows companies to focus their energy on getting gov to hassle their competitors vs improving their own product. https://en.wikipedia.org/wiki/Bootleggers_and_Baptists https://en.wikipedia.org/wiki/Bootleggers_and_Baptists

lawrencewu 9y ago
I don't know why you are getting downvoted because you're absolutely right. The first three markets named (airlines, telecommunications, health care) are all heavily regulated and the barrier to entries are controlled by the government, not natural market forces. Monopolies are not all bad. Sometimes a company has a monopoly because they just offer a better product (Amazon, Google) and they shouldn't be punished for that, especially when there's no government intervention that exists to protect them.
- peacetreefrog 9y ago
  Yeah, and it's debatable whether -- in these cases -- the monopolies would exist if it weren't for this regulation. The health care market is extremely distorted, and that's definitely true in the case of agriculture: http://www.nytimes.com/2013/07/20/business/richer-farmers-bigger-subsidies.html http://www.nytimes.com/2013/07/20/business/richer-farmers-bi...
- backtoyoujim 9y ago
  Amazon is a infested with scam storefronts. And Amazon is really compelled to do anything about it because they have no competition. Airlines have huge market barriers: getting and maintaining huge, expensive, gas guzzling aircraft. That is not a regulation barrier. Both telecomm and health care are intwined monopsonies backing the play of regional monopolies (cartels) backing federal congresspeople. I just don't buy any of your comment as fact at all.

hammock 9y ago

I wonder if, without monopolies, rural areas would be served at all with the types goods and services that these companies bring them. It might not be economically feasible!

ChuckMcM 9y ago

I largely agree with the observations in the article although I believe the author misstates the intention of government with "But in the 1980s, folks in power decided bigger was better, and conventional political wisdom followed suit." The issue with the 80's was that the US economy was in a very weird place where we had low growth and very high inflation (called 'stagflation' at the time). The mechanics of the economy were adjusted not to make 'bigger better' but instead to break out of the state of stagnant inflation. That the changes weren't undone in the 90s when much of the economic forces were re-aligned was a problem, but understandable since nobody wanted to go back to that mode. We are living in the opposite local minimum of growth and deflation where the economy is growing but inflation isn't happening because real income is going down. That said I believe that making single supplier contracts unenforcable would be an interesting change to try.

maxerickson 9y ago
What if the burst of growth in the 90s could be attributed to the inflation in the 80s? That'd be pretty unfortunate, if the low inflation mandate of the fed kept inflation below some inflection point where economic growth is more likely.
yuhong 9y ago
This was just after US got off the gold standard, and around the time of the savings and loans crisis. More recently, Medicare and drug prices is one of my favorite examples, and the same logic apply to things like the NSA.
- ChuckMcM 9y ago
  A fair point. Missing the connection to the NSA though :-) And repeating that I agree with the basic premise that single supplier contracts should be made unenforcable however to do that you have to provide a way to penalizing companies that do things to enforce them.
  - yuhong 9y ago
    The point is that the NSA is funded by government debt, which is their way of printing money. One of the reasons why we got off the gold standard is government spending.

michaelbuckbee 9y ago

Multiple other comments in here about this particular niche that the subject of the story went into (medical supplies), but what came to mind to me was a similar story about how it's a similar situation with the golf ball market [1] and from many other stories with eyeglasses (Luxottica artificially dominates the market). These are both cases where it's not so much anti-merger/monopoly law that's the culprit, but the general structure of the legal system that favors those with the larger pockets and forces out upstart manufacturers. 1 - http://www.golfdigest.com/story/ball-wars-costco-files-lawsuit-against-acushnet http://www.golfdigest.com/story/ball-wars-costco-files-lawsu...

valuearb 9y ago
Patents are government monopolies created to incentivize inventors to share their inventions so others could build upon them. The fear was they'd hide their IP behind factory walls and innovation would be slow. Now patents are used by those who don't make anything and often don't even invent anything in order to blackmail those who do.
- flyingfences 9y ago
  "Intellectual Property" is the use of the State's violence in an attempt to enforce an artificial scarcity upon something that is naturally non-scarce - information. It is inherently antithetical to a free society and always ends up hurting the everyman (and society at large) in the long run.
  - untangle 9y ago
    When I hear "IP" I now perceive "rent." Rent is drag and is a prime mover in income inequality.
    - flyingfences 9y ago
      The two are not at all alike, though. Rent is payment made in exchange for the use of a physical, scarce resource. Information, in contrast, is inherently non-scarce.

mrgreenfur 9y ago

Does anyone else think that nearly all huge companies exist due to monopolies or near-monopolies? MS has monopoly on desktops. Apple on cell phones and tablets. Facebook on social networking. Google on search. I think any market without at least 3-4 strong competitors will devolve into one dominant player who can milk more from the customer base.

adventurer 9y ago
Aside from 2008-9ish where they had around 50% and Blackberry was king, Apple has had a very small share of the mobile phone market. There is a myriad of competitors. The tablet share is up there but not to facebook or ms windows levels of having almost no competition.
EduardoBautista 9y ago
Android has a higher market share than iOS. How does that make Apple a monopoly?
- mrgreenfur 9y ago
  Fair point.
- bluejekyll 9y ago
  They definitely have a monopoly in my house...
- paulddraper 9y ago
  A more apt comparison would be Apple (iOS) vs Samsung (Android) vs LG (Android) vs Motorola (Android). And Apple has the most mobile device profits. Still, I agree: nowhere near a monopoly.
stinkytaco 9y ago
Part of the issue here is defining "market" and their scope. MS has a monopoly on desktops, but how much impact does that have with people increasingly shifting off the desktop? How do you define Facebook's market? If it's "social media" does that include blogging? twitter? email?

jackmaney 9y ago

Rural America is primarily responsible for electing Trump. Let them rot.

daodedickinson 9y ago

Where are the trust-busting candidates?

MichaelBurge 9y ago

They need to deregulate the entire medical industry, so anyone can start a medical practice. Right now, doctors control the supply of new medical licenses, and they're incentivized to restrict the supply so their own wages go up. The official line is that they can ensure high-quality medical treatments this way, but that's just something they tell themselves to feel good about it. One of the consequences is that doctors are beholden to large corporations who have teams of lawyers to handle legal issues and malpractice lawsuits. Since there are limited slots, some of them even work in foreign countries until they get experience to land a job in the US, which is a waste of talent. If anyone could start a medical practice, a new syringe company could sell to smaller practices that haven't yet been mired in enterprise contracts. Right now, in order to even build a hospital you have to submit "evidence of need" to the government to get approval. Imagine if every startup had to convince a bureaucrat that they were needed: fewer people would be interested in starting one. It's probably worth considering moving medical negotiations from insurance companies and employers to the consumer. I don't know that it's very common to call up multiple doctors and find the one with the lowest price, because you're paying your insurance company to do the negotiation for you. Taxing employer-provided health insurance as income might remove the incentive for them to provide it at all. Together with deregulating the entire medical industry, it would make it possible to buy cheap treatment without insurance, which might be enough to make insurance less important.

maxerickson 9y ago
There's an awful lot of middle ground between what we have now and "anyone can start a medical practice".
- MichaelBurge 9y ago
  If I'm reading you right, you're worried about e.g. some crackpot calling himself a doctor who rubs moonstones on an infection to make the evil spirits go away. An unfortunate consequence of "anyone can start a medical practice" is that the crackpot would be allowed to operate, but the negative aspects could be mitigated by: * Somebody starting a "Yelp for doctors" * The government could give some approval stamp to doctors using all the existing restrictions, and you could always ask a doctor "Are you XYZ-approved?" It would be a very serious crime for a moonstone-carrying crackpot to lie about his governmental approval, and his status could be verified on a government website. People who solely use government-approved doctors would still benefit, since licensed doctors would still be competing against unlicensed doctors, so there'd be a limit to how much the government policy could distort the market. * People who repair your sidewalk or furnace often advertise "licensed, bonded, and insured". A furnace can burn your house down, which seems a similar risk to medical malpractice. You could ask your doctor if he's licensed by the government, has put his personal capital into a bond, and is insured.

arca_vorago 9y ago

But our savior Peter Theil said monopolies are good and the thing every company wants to become!

costcopizza 9y ago

Drive through many American small towns and it looks the exact same. A strip mall with a Subway, a couple national fast food joints, and if you're big enough, Wal-Mart. There are literally 1000s of towns with this copy and paste setup-- how could this not be detrimental when money is going to a huge corporation every time?

heyoni 9y ago
Object-oriented economy. Rather than reusing code, we reuse business plans!
- mauvehaus 9y ago
  If you haven't read Snow Crash by Neal Stephenson, he refers to people doing just that (reusing proven business plans) as three-ringers. I.e. people who got their business plan in a 3-ring binder, and are implementing it without much in the way of critical thinking about why it works or ambition to do much beyond implementing it.
Sacho 9y ago
Okay, let's replace Wal-Mart with a bunch of local businesses, and assume they both manage to get their work done with the same amount of workers and pay the same salaries. In that case, Wal-Mart actually seems to provide a benefit to the community - its reduced prices from economies of scale benefit all consumers, while the wealth generated by local businesses is concentrated in the business owners and only trickles down to the rest of the community if they choose to invest it there. In order for Wal-Mart to be detrimental you would need to evaluate these factors: - What is the percentage of local business owners among the populace that you are aiming for? You would want a majority/large minority of people to be business owners to reap the wealth benefits, but in Wal-Mart's case you're essentially transferring wealth from the poor strata to a new middle-to-high class strata of business owners. - Can local businesses employ more local community members and pay better wages? This is a possibility if you assume Wal-Mart is pocketing huge profits for themselves, which altruistic business owners would instead redistribute among the community in the form of wages. This expectation does not mesh with my experience but I don't know if there's any study on this, maybe I'm wrong. - Can you evaluate whether the huge corporation is pocketing more money from your community than a collection of local businesses? While the huge corporation may make tons of money, what is the profit they extract from just your community, and how would it compare when replaced with local business? Obviously, you would allow for some leeway since at least the profits are going to some members of your community. - Would consumers be willing to take a hit to their standard of living in order to support local businesses? I'm skeptical, as even in the entrepreneurial-friendly US(expected higher number of business owners per capita?) the rise of corporations has been eradicating local business.

dreamdu5t 9y ago

The article never establishes what is wrong with rural America in the first place. Why does it need rescuing? Why are businesses with large market share a problem for rural America? The premise that monopolies are bad is never explained. The author never establishes any of this. How did this make it to the front page?

wallacoloo 9y ago
> The article never establishes what is wrong with rural America in the first place. She presented numbers related to how many new businesses were formed recently in small towns vs large towns. Sure, she didn't go through the hoops to explain that more new businesses = more new jobs = more local wealth, but would that have even contributed to the article? > The premise that monopolies are bad is never explained. The article did attempt to explain this through an anecdote about a superior syringe being blocked off the market by another company that held a monopoly on medical devices & arranged contracts with buyers to lock them in. Maybe she should have been more explicit - and I'm not trying to say that the article's good material for HN - but she did at least touch on most of those points.
deleted 9y ago
[deleted]

iddan 9y ago

No! Rural America is responsible for the death of millions, Rural America is the responsible for holding the progression of human race and most important: rural America is who created the monopolies. Free market can only exist where states aren't.

hackbinary 9y ago

Welcome to the new world of corporate mercantilism. https://en.wikipedia.org/wiki/Mercantilism https://en.wikipedia.org/wiki/Mercantilism

valuearb 9y ago
Mercantilism is how capitalism dies. Self interested capitalists buy monopolies from politicians until no free markets remain. Today we have Trump favoring Coal, Oil, military contractors, the Sands corporation (Sheldon Adelson) and corporations searching for special favors such as Tariffs, etc, because of their contributions to his campaign. Hilary would have favored Wall Street banks, hedge funds, "green companies" in search of federal handouts, unions, etc. We have the political system we have because of massive contributions by moneyed players who want either handouts or rules to keep competitors out.

rdlecler1 9y ago

Arguably this also affects workers in major centers who have to move to high-cost housing areas just to be employed while not materially improving quality of life.

charlieflowers 9y ago

This is behind many (maybe most) of our problems in America. For example, this is the biggest source of what's wrong with our healthcare system. Businesses have built up "moats" throughout the system, leading to high prices and poor service. This is the source of the "cost disease" that makes our healthcare too expensive. Competition is part of the very foundation of capitalism. Without it, capitalism itself doesn't work. So we better figure out some answers.

perakojotgenije 9y ago

Well that's deregulated capitalism 101.

teslaberry 9y ago

yea how about busting up amazon.

wirerc 9y ago

Rural America could bust monopolies tomorrow if they voted differently. They've done it before, and they don't need to be rescued by us for that. More like they need to rescue themselves and the rest of us.

FireBeyond 9y ago
Mmhmm. This is the same Rural America that thumps its chest proudly at how the Electoral College pulls power in the US away from major population centers and "into the heartland" (witness Trump). And yet it's our jobs to bail Rural America out?
vacri 9y ago
Unfortunately voting differently also means voting for social change in other areas, which rural populations usually aren't eager for.

jondubois 9y ago

Most 'monopolies' that exist today are artificial - This is because they are only monopolies to the extent that they are able to: 1. Keep buying up advertising to make sure that any potential competitor cannot afford eyeballs. 2. Keep hiring up as much technical talent as possible to make sure that any potential competitor doesn't get access to that talent in order to build a competing product. 3. Keep subsidising the cost of their own services (at a loss to themselves) in order to make the market non-viable for any potential competitor. It's a scorched-earth approach. Any company that has the money can create an artificial monopoly for themselves by engaging in any of the three activities above. However, those activities are increasingly expensive because they drive up advertising costs and engineer salaries. If companies keep doing this, eventually, they'll make the market non-viable even for themselves.

Overtonwindow 9y ago

Oh you mean like Comcast?

geff82 9y ago

As someone who loves rural USA and especially Texas, how could we spread the word better? How could we make it more attractive? Do you think there are other possibilities to revive it besides changing government policies? Let us brainstorm about it!

cmurf 9y ago

Most legislation, counted in line or pages, is written by industry. Legislators aren't writing this themselves. And there's little in the way of taking a strong anti-trust (competition law) in politics. The Obama administration watched over, and permitted mergers that very blatantly reduce competition: multiple airlines, and drug companies. And it was more aggressive overall in applying competition law compared to previous Republican administrations. So, point is, even with a Democratic president, competition law isn't pressed strongly enough, let alone with a Republican in office where it's apparently "we need to recognize more natural monopolies, and help them whenever possible". About the only thing all Americans might be able to agree on when it comes to politics, is the increasingly obvious need for a constitutional amendment getting money out of politics.

throwaway73363 9y ago

Apparently this is true not only of the US but also of Japan. I just finished watching a nice dram series called 'Shitamachi Rocketto' which might be of interest to folk on HN.

dingo_bat 9y ago

If a monopoly is hard-won and not being abused, what's the problem?

eecc 9y ago

I found this book rather interesting: https://en.wikipedia.org/wiki/Monopoly_Capital https://en.wikipedia.org/wiki/Monopoly_Capital it reflects over essentially the same problem (to make a Marxist critique to capitalist pretenses of freedom, fairness and its claims to optimality.) Among other points, the book spends time arguing how Corporate Capitalism is fundamentally monopolistic.