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Mr. Arends makes a very strong argument. And really, if you need a shorthand way to understand this issue, all you need to know is that the Bush Administration
by Bud 16y ago
Mr. Arends makes a very strong argument. And really, if you need a shorthand way to understand this issue, all you need to know is that the Bush Administration stripped away the limits on one company's ownership of spectrum. Republicans talk a good game about the "free market", but it's internally inconsistent talk; you can't have a free market if the number of players in said market gets below a certain level. 4-5 is probably a pretty good guess at what that level is, and in the GSM market, we're now down to 1 player if this deal goes through. Since many customers are forced into choosing GSM for compatibility when they travel, that's an effective monopoly, just like Arends says.
I'm an AT&T customer. But I'm not optimistic about what this deal will mean. I know what it won't mean: cheaper and better service, as guaranteed by a healthy fear of competitors.
- hyperbovine 16y agoBush's term ended in 2008. I think that's a salient point.
- aaronbrethorst 16y agoIt actually ended in January 2009.
- evo_9 16y agoReally? I couldn't tell the differences based on how the new guy has been acting(see: Wall Street bailout, lack of standing tall with Wisconsin Union, Domain Take-Down practice, etc). I wish it were different than this, why I voted for change in the first place. Ah well.
- wyclif 16y agoYou drank the Kool-aid.
- Schultzy 16y agoWhat's so bad about a monopoly in a free market? Doesn't that just create opportunity for some other carrier, perhaps a currently small regional company, to step up and fill that hole? If the pain is big enough, there will be competition. If we mandate competition, it's not a FREE market.
- gergles 16y agoIt's impossible to compete with a national wireless carrier due to a multi-billion dollar barrier to entry in the form of a spectrum license.
- EricBerglund 16y agoThis is true in a market with few existing regulations and a low barrier to entry, in other words the complete opposite of the mobile market.
- TGJ 16y agoThe problem lies in costs. A monopolistic company keeps costs down due to scale. Any other business cannot enter the market on a competitive level because they cannot meet the same price structures.
- rwmj 16y agoRF spectrum is not a free market - it's a government-backed monopoly.
- MatthewPhillips 16y agoMonopolies prevent competition from entering the market (by definition) by building barriers to entry. AT&T is not a monopoly, people like to throw that word out whenever a company does something like this. What Intel did to AMD is a good example of a company using a monopoly position to prevent competition.
- jerf 16y ago"If we mandate competition, it's not a FREE market." In addition to the other fine replies made, I want to highlight this to strongly disagree with it. In fact actually having a free market requires aggressively protecting it when a given market naturally coalesces into a monopoly or oligarchy. Trust-busting isn't an anti-free-market position, it's a pro-free-market position. The anti-free-market actions come from governments picking winners and enshrining monopolies/oligarchies through regulatory capture. In particular, when advocates of other social organizations level this as a criticism of free market, my response is to point out that when you have lack of mandated competition with some form of government-selected winners, be it communism, socialism, or "crony capitalism", you don't have a free market at all and the criticism is more generally applicable to the social organization being argued for by the person raising this criticism. In a free market, a new company always ought to be able to come along and completely destroy an existing company if they do a good enough job. If you don't have this, you don't have a free market.