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What’s interesting about this article is that it lays the blame with anti-Trust actions. The article argues that BT and AT&T if they were allowed to keep their

What’s interesting about this article is that it lays the blame with anti-Trust actions. The article argues that BT and AT&T if they were allowed to keep their monopolies would have allowed the UK and US to have far greater internet speeds via massive fiber deployments. I have always seen monopolies as harming consumers and more competition as being beneficial, but this is an interesting observation.

munk-a 5y ago
Oh, monopolies definitely harm consumers - but even a wrong clock can be right twice a day. The US still has a plethora of local cable monopolies and we haven't seen incredible internet offerings come out of those.
- whatshisface 5y ago
  A plethora of multiple local monopolies combines all of the internal service (accounting, legal, compliance) duplication and inefficient fixed-cost overheads of multi-seller markets with all of the seller-biased non-equilibrium pricing of giant monopolies. Somehow, we got the worst of all worlds.
dangerlibrary 5y ago
s/interesting observation/unsubstantiated claim about a counterfactual/
projektfu 5y ago
Monopolies have the option of using their excess profit to enrich a few people at the expense of the customer. But it is not a requirement and that is also a good way to have the monopoly destroyed. Another option is to use the market power paternalistically, giving people services they didn't know they needed, planning for the future, performing basic research and R&D outside their current scope. Arguably there was a time when AT&T and its subsidiaries Western Electric and Bell Labs were doing this sort of thing. But they were also charging people an arm and a leg to rent a durable but low-functionality handset and preventing third party devices from connecting directly to the lines.
pstrateman 5y ago
They monopolies were never broken up, just made local. It's extremely rare to have more than one choice for cable or copper phone service in the US.
- rhino369 5y ago
  It's not highly competitive, but you can buy cable TV service from satellite companies or IPTV streamers and you guy telephone service from mobile carriers, the "phone company," and the cable company. In most urban/suburban areas you can ISP service from the "phone" company and the cable company. That is a lot competition than AT&T faced--which was literally none.
makomk 5y ago
It looks like there's some more contemporary context here: https://www.newscientist.com/article/mg12817403-300-technology-trial-makes-light-of-cable-network/ https://www.newscientist.com/article/mg12817403-300-technolo... Basically, in order to take full advantage of this system every house would need their own ONT to convert the fibre optic into something useable. This would be very expensive with 1990s tech, and internet access wasn't a selling point back then (even the BBC didn't have a proper internet presence until like 1994) so the way they hoped to make that money back was by bundling in premium TV channels - leveraging their existing telecoms monopoly into becoming a US-style cable TV provider except over fibre. Like, I've found a paper from the BT Research Laboratories about it and it has a lot of stuff about "broadband signals", but what they mostly mean by that in the short term is analogue TV (which is indeed broadband by the 1990-era usage of the term). This was not popular with the government, who'd prefer to break that monopoly instead due to them doing such a poor job of basic things like actually connecting people to to the telephone network in a timely fashion. All the wider-scale rollouts I'm aware of used the cheaper Street TPON option mentioned in the article, where the ONT is in the street and shared between multiple customers, who only get traditional copper POTS service from it - and I mean that's literally all it can support. Telecom-grade audio at presumably the usual 8-bits, 8ksps, u-law. No ADSL, no ISDN, no digital data on the customer end of any kind, just POTS only with no direct upgrade path to anything else. Some of these continued operating and being a millstone around the neck of their customers until well into the 21st century, in fact it's possible some are still in use now.
MichaelIt 5y ago
The article isn't just revisionist history, it is pure fantasy. Fiber technology was prohibitively expensive in the 70's and was far from ready to be used in residential homes. You would have to wait until the mid-90's for the "killer app" (the world wide web).
tyrfing 5y ago
If you're interested in thinking more about it, Peter Thiel's Zero to One is a very interesting book. It's certainly not necessarily true that a monopoly ends up providing value like that, but with Google as an example, it's very unlikely they would provide so much open source code if they were in a vicious fight for survival. > [T]he history of progress is a history of better monopoly businesses replacing incumbents. Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of. https://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 https://www.wsj.com/articles/peter-thiel-competition-is-for-...
- nemothekid 5y ago
  It's not a good counter-argument because telecoms arguably have a monopoly power in the US and were dragging their feet in offering fiber up until Google announced they were becoming an ISP.
  - tyrfing 5y ago
    > telecoms arguably have a monopoly power in the US and were dragging their feet in offering fiber up until Google announced they were becoming an ISP. One of those is extracting monopoly profits, and it's not the telecoms.
- smilespray 5y ago
  I am staunchly against book burning on principles, but I suddenly find myself wondering whether Peter Thiel is flammable. Jokes aside, I'm not going to take anything that man says on face value — even if I'm reading the article as I speak.
  - tonguez 5y ago
    thanks for sharing
sofixa 5y ago
> I have always seen monopolies as harming consumers and more competition as being beneficial, but this is an interesting observation. They mostly do, and infrastructure tends to converge to natural monopolies. The trick is to regulate the hell out of them. For instance in France the former government owned telephony monopoly was forced to provide access to competitors to their physical network, at regulated prices. And to follow up on that, today an ISP can create new lines to link a new city or neighborhood, and they have exclusivity for a fixed period of time - afterwards they're forced to provide regulated access to their competitors. As a result, we have a healthy competition with good prices (usually between 30-50 euros depending on package, max speed, TV options) and good speeds ( multi-hundred Mbit, up to 1Gbit is the norm in most places - there are even villages with hundreds of inhabitants with fiber deployed everywhere, and proud signs "Commune fibrée" on entering them).
- imtringued 5y ago
  Wow, time limited monopolies! How did they come up with that idea! We should implement this for copyright and patents. Oh wait, patents already work the way they should. It's copyright that is broken...

munk-a 5y ago

Oh, monopolies definitely harm consumers - but even a wrong clock can be right twice a day. The US still has a plethora of local cable monopolies and we haven't seen incredible internet offerings come out of those.

whatshisface 5y ago
A plethora of multiple local monopolies combines all of the internal service (accounting, legal, compliance) duplication and inefficient fixed-cost overheads of multi-seller markets with all of the seller-biased non-equilibrium pricing of giant monopolies. Somehow, we got the worst of all worlds.

dangerlibrary 5y ago

s/interesting observation/unsubstantiated claim about a counterfactual/

projektfu 5y ago

Monopolies have the option of using their excess profit to enrich a few people at the expense of the customer. But it is not a requirement and that is also a good way to have the monopoly destroyed. Another option is to use the market power paternalistically, giving people services they didn't know they needed, planning for the future, performing basic research and R&D outside their current scope. Arguably there was a time when AT&T and its subsidiaries Western Electric and Bell Labs were doing this sort of thing. But they were also charging people an arm and a leg to rent a durable but low-functionality handset and preventing third party devices from connecting directly to the lines.

pstrateman 5y ago

They monopolies were never broken up, just made local. It's extremely rare to have more than one choice for cable or copper phone service in the US.

rhino369 5y ago
It's not highly competitive, but you can buy cable TV service from satellite companies or IPTV streamers and you guy telephone service from mobile carriers, the "phone company," and the cable company. In most urban/suburban areas you can ISP service from the "phone" company and the cable company. That is a lot competition than AT&T faced--which was literally none.

makomk 5y ago

It looks like there's some more contemporary context here: https://www.newscientist.com/article/mg12817403-300-technology-trial-makes-light-of-cable-network/ https://www.newscientist.com/article/mg12817403-300-technolo... Basically, in order to take full advantage of this system every house would need their own ONT to convert the fibre optic into something useable. This would be very expensive with 1990s tech, and internet access wasn't a selling point back then (even the BBC didn't have a proper internet presence until like 1994) so the way they hoped to make that money back was by bundling in premium TV channels - leveraging their existing telecoms monopoly into becoming a US-style cable TV provider except over fibre. Like, I've found a paper from the BT Research Laboratories about it and it has a lot of stuff about "broadband signals", but what they mostly mean by that in the short term is analogue TV (which is indeed broadband by the 1990-era usage of the term). This was not popular with the government, who'd prefer to break that monopoly instead due to them doing such a poor job of basic things like actually connecting people to to the telephone network in a timely fashion. All the wider-scale rollouts I'm aware of used the cheaper Street TPON option mentioned in the article, where the ONT is in the street and shared between multiple customers, who only get traditional copper POTS service from it - and I mean that's literally all it can support. Telecom-grade audio at presumably the usual 8-bits, 8ksps, u-law. No ADSL, no ISDN, no digital data on the customer end of any kind, just POTS only with no direct upgrade path to anything else. Some of these continued operating and being a millstone around the neck of their customers until well into the 21st century, in fact it's possible some are still in use now.

MichaelIt 5y ago

The article isn't just revisionist history, it is pure fantasy. Fiber technology was prohibitively expensive in the 70's and was far from ready to be used in residential homes. You would have to wait until the mid-90's for the "killer app" (the world wide web).

tyrfing 5y ago

If you're interested in thinking more about it, Peter Thiel's Zero to One is a very interesting book. It's certainly not necessarily true that a monopoly ends up providing value like that, but with Google as an example, it's very unlikely they would provide so much open source code if they were in a vicious fight for survival. > [T]he history of progress is a history of better monopoly businesses replacing incumbents. Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of. https://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 https://www.wsj.com/articles/peter-thiel-competition-is-for-...

nemothekid 5y ago
It's not a good counter-argument because telecoms arguably have a monopoly power in the US and were dragging their feet in offering fiber up until Google announced they were becoming an ISP.
- tyrfing 5y ago
  > telecoms arguably have a monopoly power in the US and were dragging their feet in offering fiber up until Google announced they were becoming an ISP. One of those is extracting monopoly profits, and it's not the telecoms.
smilespray 5y ago
I am staunchly against book burning on principles, but I suddenly find myself wondering whether Peter Thiel is flammable. Jokes aside, I'm not going to take anything that man says on face value — even if I'm reading the article as I speak.
- tonguez 5y ago
  thanks for sharing

sofixa 5y ago

> I have always seen monopolies as harming consumers and more competition as being beneficial, but this is an interesting observation. They mostly do, and infrastructure tends to converge to natural monopolies. The trick is to regulate the hell out of them. For instance in France the former government owned telephony monopoly was forced to provide access to competitors to their physical network, at regulated prices. And to follow up on that, today an ISP can create new lines to link a new city or neighborhood, and they have exclusivity for a fixed period of time - afterwards they're forced to provide regulated access to their competitors. As a result, we have a healthy competition with good prices (usually between 30-50 euros depending on package, max speed, TV options) and good speeds ( multi-hundred Mbit, up to 1Gbit is the norm in most places - there are even villages with hundreds of inhabitants with fiber deployed everywhere, and proud signs "Commune fibrée" on entering them).

imtringued 5y ago
Wow, time limited monopolies! How did they come up with that idea! We should implement this for copyright and patents. Oh wait, patents already work the way they should. It's copyright that is broken...