3 ms·

If you're referring to the Kingsbury Commitment[1] that was an agreement with the government after AT&T was already a monopoly. After Alexander Graham Bell's pa

by guelo 10y ago

If you're referring to the Kingsbury Commitment[1] that was an agreement with the government after AT&T was already a monopoly. After Alexander Graham Bell's patent expired there was a brief period where competition sprouted but then AT&T started consolidating and buying up the smaller competitors. By 1913 AT&T was already in a dominant monopoly position. [1] https://en.wikipedia.org/wiki/Kingsbury_Commitment https://en.wikipedia.org/wiki/Kingsbury_Commitment

WalterBright 10y ago
It was not already a monopoly. Your link says there were other long distance companies, just that AT&T's was more extensive. Note that scores of companies were running railroads everywhere, it doesn't make sense that running a telephone wire was infeasibly expensive.
- overcooked 10y ago
  A couple things: 1) While AT&T was not the only provider left standing, it was the largest and had scale advantages against its competitors. The Kingsbury Commitment was designed to halt AT&T's expansion and ensure that those competitors were able to compete. However, it failed: AT&T was able to continue to improve its dominant position by selling subscribers in certain areas while purchasing competitors in more strategically advantageous areas. 2) One of the reasons for "natural" monopoly regulation is that we do not want telephone wires, railroads, and pipelines running everywhere. Building a utility requires gaining access to rights of way. Society subsidizes all private utilities by creating rights of way and infringing upon the rights of property owners along the route. 3) The scores of companies running railroads everywhere were subsidized even further. At least in the West, the federal government gave land along the route to the railroad companies for construction. [1] In some ways, building a railroad was more about land speculation than private construction of transportation infrastructure. [1] https://en.wikipedia.org/wiki/Pacific_Railroad_Acts https://en.wikipedia.org/wiki/Pacific_Railroad_Acts

by guelo 10y ago

WalterBright 10y ago

It was not already a monopoly. Your link says there were other long distance companies, just that AT&T's was more extensive. Note that scores of companies were running railroads everywhere, it doesn't make sense that running a telephone wire was infeasibly expensive.

overcooked 10y ago
A couple things: 1) While AT&T was not the only provider left standing, it was the largest and had scale advantages against its competitors. The Kingsbury Commitment was designed to halt AT&T's expansion and ensure that those competitors were able to compete. However, it failed: AT&T was able to continue to improve its dominant position by selling subscribers in certain areas while purchasing competitors in more strategically advantageous areas. 2) One of the reasons for "natural" monopoly regulation is that we do not want telephone wires, railroads, and pipelines running everywhere. Building a utility requires gaining access to rights of way. Society subsidizes all private utilities by creating rights of way and infringing upon the rights of property owners along the route. 3) The scores of companies running railroads everywhere were subsidized even further. At least in the West, the federal government gave land along the route to the railroad companies for construction. [1] In some ways, building a railroad was more about land speculation than private construction of transportation infrastructure. [1] https://en.wikipedia.org/wiki/Pacific_Railroad_Acts https://en.wikipedia.org/wiki/Pacific_Railroad_Acts