Sender: •••@••.••• (Glen Raphael) > Cyberspace Inc and the Robber Baron Age The current consensus view of economists is that the 19th century "trusts" were generally pro-consumer and breaking them up was anti-consumer. Anyone who still believes that the "Robber Barons" were universally harmful and that government intervention protected us from them then or now should read either of the following: 1) The article on "Antitrust", _Fortune Encyclopedia of Economics_, 1992 ed. 2) _The Myth of the Robber Barons_, by Burton Folsom, Jr. In short, if we allow the big players in telecommunications to compete freely in an entirely unregulated market, consumers will benefit. History tells us this, and so should common sense. What is truly dangerous to consumers is the status quo which legally _prevents_ free competition among providers. Historically speaking, the ONLY way to get a true monopoly is to have the government enforce your claim to a territory, and that's just what is happening now. >What the manifesto does discuss -- at great length -- is the protection of >freedoms for _telecommunications & media conglomerates_: freedom to form >monopolies, freedom to set arbitrary price rates and structures, freedom to >control content[...] > This is a formula which harks back to the robber-baron >capitalism of the late nineteenth century, when railroad, oil, and steel >monopolies ran roughshod over America's economy and political system. As long as the government doesn't prevent entry of new competitors, all of the above will benefit the consumers, JUST AS IT DID in the late ninteenth century. By all accounts, the way Rockefeller got 80% of the oil market was by providing a better, higher quality product at a lower price than anyone else could, using the latest technology to keep pushing the price down faster. The way Rockefeller's share of the market dropped back to 63% BEFORE the government broke it up, was that everybody else copied his techniques and started underbidding him, stealing the market back. This was a time of fierce competition, the best possible time to be a consumer. It was a buyer's market. If PFF's changes can really give us that kind of a market in telecommunications, we should all rejoice! Happy days are here again! Free at last! :-) >The main point of the Magna >Carta, deceptively presented, is an agenda for total deregulation of >telecommunications. If that's true, then I guess I'll have to support it after all. (I was pretty skeptical of PFF before I read this article) >Given the multi-billion dollar capital reserves of the phone companies, the >best business opportunity would presumably be for phone companies to simply >acquire cable companies, thus establishing total monopolies over wires >coming into the home. If building a cable network somewhere guaranteed that the phone company would buy it from you no matter how much you thought it was worth, then everybody and his brother would get into the business of building new cable networks even in places that already had one. In fact, this is exactly what happened to Rockefeller at one point: he was willing to buy up oil refineries, so lots of people built new refineries just to take advantage of him. Eventually the company pursuing the dubious monopoly strategy described above has more capacity than it can possibly use, and starts running out of money to buy more. Worse, the overhead of all those non-productive resources makes it ever easier for a smaller competitor without such overhead to undercut and steal the market away. It is thus utterly impossible to establish "total monopolies over wires coming into the home" by simply buying up wire providers, unless the government prevents new entry into that market. Accomplishing such a feat would be much like trying to establish a "total monopoly over food coming into the home" by buying up supermarkets and restaurants! (side note: there are quite a few cities which have multiple competing cable networks that do not share wires. There are even cities (El Paso, Texas is one) which have multiple competing electricity networks in the same area. In such places, service prices are lower and consumer satisfaction higher than in monopoly areas according to _Consumer's Research_ magazine.) >Within their >turfs, they're allowed to be as monopolistic as they can get by with. Worse, within their turfs they are REQUIRED to be monopolistic. The current regulatory system grants monopolies over things like local telephone and local cable. And it grants duopolies in cellular frequencies. If the PFF gets rid of such restrictions (I don't know if it does), then most such problems will eventually go away. Of course no matter what happens wireless and satellite technologies will probably render the point moot... -- Glen Raphael •••@••.••• President, Stanford/Palo Alto Macintosh User's Group <A HREF="http://www.batnet.com/liberty/raphael">Home Page</A><BR> ~=-=-=-=-=-=-=-=~=-=-=-=-=-=-=-=-=~-~=-=-=-=-=-=-=-=~=-=-=-=-=-=-=-=-=~ Posted by -- Andrew Oram -- •••@••.••• -- Cambridge, Mass., USA Moderator: CYBER-RIGHTS (CPSR) World Wide Web: http://jasper.ora.com/andyo/cyber-rights/cyber-rights.html http://www.cs.virginia.edu/~hwh6k/public/cyber-rights.html FTP: ftp://jasper.ora.com/pub/andyo/cyber-rights You are encouraged to forward and cross-post messages and online materials, pursuant to any contained copyright & redistribution restrictions. ~=-=-=-=-=-=-=-=~=-=-=-=-=-=-=-=-=~-~=-=-=-=-=-=-=-=~=-=-=-=-=-=-=-=-=~
