Re: PFF Agenda [cr-95/9/4]


Richard Moore

>Date: Sun, 10 Sep 1995 01:09:30 -0700
>Subject: Re: PFF Agenda [cr-95/9/4]
>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.

"Concensus view"?  There's more diversity than that among economists,
despite what one might surmise from reading the Fortune Encyclopedia of

Speaking of how "pro-consumer" trusts were, consider how the Southern
Pacific operated in California.  SP would audit the books of its customers,
and charge a special freight rate for each one, thus giving SP a
profit-share of those operations, decreasing their profitiability and their
ability to reinvest and develop.

This wasn't pro-consumer.  I'll admit there were economic benefits from
late 19th century developments, but there were unacceptable aspects as
well, and they simply weren't necessary in order to enable development.
The major regulatory frameworks that were set up earlier this century
addressed very real problems, and led to a better system.

There are problems with regulation, as there are problems with criminal
laws, but in neither case is lawlessness (syn: deregulation) the answer.
We need intelligent consideration of how we want cyberspace developed, not
simply a buck-passing to communications conglomerates.

>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.

History does not tell us this, and common sense should pay attention to
precedent.   Are you arguing that competition will prevail, or that
monopolies are consumer friendly?  If you see a future for competition, I
think you need to make a strong case for that, because that's not the way
things are heading.  If you embrace a monopoly-dominated future, then the
historical record is not nearly as benign as you'd like to believe.

>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

By "all accounts"??  Rockefeller got 80% of the market because he
understood the power derived from controlling distribution channels,
because he knew how to build an organization, and becuase he used all
manner of anti-competitive tactics to overpower competitors and dominate
suppliers.  He invented the "committee", and learned how to use it to tune
the operation of his enterprises.  He didn't pioneer in technology; he
waited for a smaller operator to develop something, and then he'd copy it
or buy it.  He "bought" governors and legislators.  His career wasn't a
simple exercise in libertarian economics.

>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.

Your're leaving out the part of the monopoly involving content providers.
When you have a Disney/telecommunications monopoly, then you'll see the
content available over in-house wires wherever possible.  In other cases,
deals will be cut at a high-level between content owners and distributors.
It will not be at all easy for independent wire-stringers to gain access to
marketable content, or to overcome consumer habits.

Perhaps Japanese Keiretsu are a good model for how
cyberspace/telecommunications seems to be heading.  I think you're taking
too narrow a view of the possibilities.

>Of course no matter what happens wireless and satellite technologies will
>probably render the point moot...

Wireless and satellite operations are subject being bought up by
conglomerates, and brought into exclusive deals with other operators.  This
doesn't change the economic landscape, it simply adds to the range of
distribution channels.


>Date: Wed, 13 Sep 1995 01:08:21 -0700
>Subject: There is No Revolution Without Revolutionaries [cr-95/9/13]
>Sender: MARK STAHLMAN <•••@••.•••>
>Give up on the Magna Carta.  It's dead, dead, dead.  There was no attempt to
>discuss it at this year's event and there is no plan to revive it.

Perhaps PFF isn't pushing it; maybe it didn't meet with the success they
orinally hoped for, as a propaganda piece.  But the agenda presented in the
MC continues to survive in The Telecommunications Deregulation and
Competition Act of 1995.  Recall Wally Bowen's excellent piece in the 12
September cyber-rights, including:

  >The legislation's "deregulation and competition" label is a
  >howling misnomer. The proposed laws do knock down barriers to
  >competition between cable TV and phone companies, and between
  >local phone and long distance services.  That's good.  But there's
  >a huge loophole:  there are no safeguards against collusion,
  >collaboration and merger...  Outside of the long distance business,
  >the only real "competition" we will see is the current
  >jockeying for strategic alliances and mergers.

As Mark says elsewhere, the implementation may involve more regulations,
not fewer, but the final result is likely to be a small number of
mega-monopolies running the show and setting their own prices.

>The fact that someone with no connection to these events, who has only read
>the document (yes, Richard Moore) and has spent so much time criticizing it,
>is only a reflection of his bad judgement and/or a lack of more important
>resposibilties.  Don't treat his analysis as informed discourse.

Perhaps you over-emphasize the personalities in this drama.  The MC
document is interesting because it accurately describes the legislation and
rhetoric that have unfolded subsequently.  As for how informed my analysis
is, I imagine people will decide for themselves.

>...The PFF is Tofflerian and technocrat, just like Gingrich -- read my "There
>is No Revolution Without Revolutionaries" post for the background on all of
>that -- not extremely deregulatory.

I read through the piece on "Revolutionaries".  There's a lot about
personalities and fanciful historical "movements", but nothing about the
current legislation and how it would structure the economics of cyberspace
development.  I couldn't find the analysis to back up the opinions.


  >Date: Thu, 14 Sep 1995 01:16:16 -0700
  >Sender: •••@••.••• (Kurt Guntheroth)
  >Subject: capitalism and the internet

  >...In the real world we must fight to prevent a single
  >buyer or seller from dominating the market, because then
  >they alone dictate price.  And in cyberspace, we must fight
  >to prevent a single authority from dictating content, for then
  >they alone dictate the terms of debate and control what knowledge
  >we may have.

Indeed.  What we're likely to get will be a few dominant sellers
determining content and pricing, and deciding what kind of uses will be
economically feasible in cyberspace.  That's the legislation we're being
faced with, given the anti-regulatory mania currently in vogue.  I think
this is a central issue for Cyber Rights, and one that has not received
enough attention.



 Posted by Richard K. Moore (•••@••.•••) Wexford, Ireland (USA citizen)
                            cyber-rights co-leader