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One of the hardest learned lessons of the twentieth century was that you didn't need collusion for a duopoly to become a monopoly. We have four major carriers,

One of the hardest learned lessons of the twentieth century was that you didn't need collusion for a duopoly to become a monopoly. We have four major carriers, everyone else leases their bandwidth. They don't talk to each other, but their deals are a subtle form of signaling, and they have arrived at a monoplistic market, even with competition. Several rational actors with complete public information can still collaborate just by their actions alone. There's an entire category of "Hat Puzzles" [1] that involve extracting information from other players moves. The big four (Verizon, AT&T, Sprint, T-Mobile) don't need to collude to arrive at a stagnant, uncompetitive market. They have found an equalibrium that benefits all of them, and would hurt any who attempted "competition". [1] https://en.wikipedia.org/wiki/Hat_puzzle https://en.wikipedia.org/wiki/Hat_puzzle

ianai 7y ago
That’s a very straightforward explanation of market concentration! Thank you! I wish people better understood how monopolistic power harms everybody. It results in false scarcity trade offs, for instance. But that’s abstract.
rayiner 7y ago
You can’t just hand wave and say that because price coordination is possible, it’s happening. You have to tie your theory to the facts. Sprint and T-Mobile offer dramatically lower pricing, so there can’t be price coordination. There is no carving up of the market—the service area of the four carriers mostly overlap. In the LTE era, there is very little barrier to switching. (All the carriers offer big switching incentives.) Capital expenditures remain enormous across the board. What exactly is the sign of lack of competition? In the last ten years, I can think of few pieces of tech that’s gotten better faster than cell service. When the iPhone 3GS came out, you could get peak speeds up to 2-3 Mbps. On my XR, I’ve gotten 100 Mbps+. That factor of 20-30 increase is about the same as the increase in iPhone CPU performance over that time (which itself has been a stupendous success story). Maybe GPUs have improved faster? Certainly not desktop CPUs, or mobile or desktop operating systems, or web browsers, or search.

ianai 7y ago

That’s a very straightforward explanation of market concentration! Thank you! I wish people better understood how monopolistic power harms everybody. It results in false scarcity trade offs, for instance. But that’s abstract.

rayiner 7y ago

You can’t just hand wave and say that because price coordination is possible, it’s happening. You have to tie your theory to the facts. Sprint and T-Mobile offer dramatically lower pricing, so there can’t be price coordination. There is no carving up of the market—the service area of the four carriers mostly overlap. In the LTE era, there is very little barrier to switching. (All the carriers offer big switching incentives.) Capital expenditures remain enormous across the board. What exactly is the sign of lack of competition? In the last ten years, I can think of few pieces of tech that’s gotten better faster than cell service. When the iPhone 3GS came out, you could get peak speeds up to 2-3 Mbps. On my XR, I’ve gotten 100 Mbps+. That factor of 20-30 increase is about the same as the increase in iPhone CPU performance over that time (which itself has been a stupendous success story). Maybe GPUs have improved faster? Certainly not desktop CPUs, or mobile or desktop operating systems, or web browsers, or search.