5 ms·

... after creating monopolies in the first place

• bgentry 15y ago
  The government doesn't have to create these monopolies. Utility (i.e. telecom) companies naturally tend towards a monopoly because of the absurdly high cost of rolling out duplicate infrastructure. Usually the first mover is able to fend off any real competition by lowering its prices below that which its competitors can afford, given that they still have an infrastructure to build.
  • masklinn 15y ago
    And even if the first mover does not end up alone on the market, after some time the market tends to undergo significant consolidation (once most of the organic growth has been achieved). And you end up with a natural monopoly anyway. You can even see that in very recent history: the US government broke up Bell in 7 in 1984, it's already merged back into 2 companies (AT&T and Verizon are composed of 3 baby bells each, the 7th is part of Qwest/CenturyLink)
    • ori_b 15y ago
      Correct me if I'm wrong, but the baby bell split was a vertical split. In other words, it left 7 regional monopolies, rather than 7 companies covering the same regions, competing for the same customers. That means that customers were still stuck with one choice for phone and internet access, but the choice merely varied based on where you went. The Baby Bells weren't competing with each other.
• krschultz 15y ago
  The logic there is astounding. The government broke up AT&T into a bunch of little companies. These companies then merged their way back into a handful of large corporations and are still trying to merge even more. Did the government force them to join up together? Of course not. The government is actively discouraging a lot of these mergers, i.e. the government is forcing there to be a more competitive marketplace.
  • Semiapies 15y ago
    The government broke up AT&T into a bunch of little companies After establishing it as a federal monopoly in 1934. (And in TFA, we're talking British Telecom.) Similarly, there are a lot of municipal agreements in the US where one company gets the exclusive right to handle local phone or cable service within a city or region. More companies or smaller companies doesn't mean any benefit for consumers when they still just end up choosing between "the phone company" and "the cable company" as designated by law.
    • masklinn 15y ago
      > After establishing it as a federal monopoly in 1934. (And in TFA, we're talking even worse entities.) In order to regulate it (putting it under jurisdiction of the FCC) as Bell was already a natural monopoly by this point, even after the Kingsbury Commitment.
      • Perceval 15y ago
        At the top of this thread, ojbyrne says we need to have government regulation in order to create competition. Here you say that we needed regulation to make AT&T a de jure national monopoly so that we could further regulate AT&T. So, regulation grants monopolies, then regulates those monopolies, then also regulates more competition into the monopoly market it had previously granted? This is good governance?
        • masklinn 15y ago
          Regulation did not create AT&T's monopoly. AT&T did that, the government later sanctioned it in order to try and better regulate the monopolistic company (it failed).
  • Perceval 15y ago
    The original AT&T was made into a national monopoly by U.S. government regulation: http://en.wikipedia.org/wiki/American_Telephone_%26_Telegraph#A_national_monopoly http://en.wikipedia.org/wiki/American_Telephone_%26_Telegrap... Likewise, in many European countries, telecoms were originally national monopolies. Both in Europe and in the United States those national monopolies were either broken up or subjected to more competition. VMG is quite correct to point out that telecoms gained monopoly status due to government action.
• logjam 15y ago
  >... after creating monopolies in the first place If you are really trying to advance the theory that "the market", left to itself, won't generate monopoly after monopoly, perhaps you could point us to actual examples of those golden times when the absence of regulation served consumers more than they served business oligarchy.
  • russell 15y ago
    Are you trying to say that unregulated monopolies like US Steel, Standard Oil, the railroads, AT&T, American Tobacco didnt have the best interests of the public in mind? After all Carnegie gave us lots of libraries and without Rockefeller we would not have had the Rockettes.
    • seabee 15y ago
      If American Tobacco had the best interests of the public in mind, do you think they'd still exist in any form? Being philanthropic is not mutually exclusive with owning an amoral or even unethical business.
      • masklinn 15y ago
        I'm pretty sure he was being sarcastic.
    • chopsueyar 15y ago
      One man's robber baron is another man's philanthropist. Did you ever use Windows Millennium Edition?
    • lionhearted 15y ago
      I can't comment on the other three, but Standard Oil was fantastically good for the United States and the world. I'd really recommend the biography "Titan" by Ron Chernow about John Rockefeller's life. Tons of advances in efficiency, chemistry, operations, logistics. Oil prices fell dramatically, consistency and quality went up, supply went up through all of Standard's monopoly years. Breaking it up was far more about political factional conflict than it was about problems for consumers. (Preemptively: Before anyone decides to jump on it, Rockefeller's rebate deal with the railroad wasn't above board. But Standard Oil was a huge net gain for the world. Absurdly so, actually.)