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Comment by jblow | Hacker News Reader

"absolutely disastrous"?

I am 44 years old, which means I remember growing up at a time when you were not allowed to own a telephone -- because AT&T exercised its corporate monopoly to control what you could plug into your AT&T phone line, and they would only permit that to be an AT&T phone, and they would not ever sell you an AT&T phone, they would only rent you one at an exorbitant price. And they didn't bother to provide you any variety in models, because why would they? There's one phone, that is what you get.

Also, if you wanted to call someone in a different area code, then I hope you are ready to shell out some cash...

If it weren't for state-exercised power, it is quite possible that things would still be this way.

I do not consider today's situation a disaster at all, relatively speaking. (For sure there are still many un-ideal things about it.)

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How did AT&T come by their monopoly in the first place? IIRC it was a crony deal with the State that established it in the first place.

It's a complex history, but it started with the government's prevention of what would have been an even bigger monopoly.

https://en.m.wikipedia.org/wiki/Kingsbury_Commitment

But for the most part, it is just that AT&T kept buying smaller companies, which is just what happens in capitalism when one party starts to win, which is why checks on capitalism are necessary.

Here is an in depth look into how the state prevented competition in regards to AT&T. http://object.cato.org/sites/cato.org/files/serials/files/ca...

In no way is the free market responsible for the AT&T monopoly.

Some Austrians (e.g. Rothbard) argue that monopolies as we understand them are actually impossible without State action.

https://mises.org/library/austrian-monopoly-theory-%E2%80%94...

And some people are flat out wrong. Monopolies at the local level are very common historically. Small towns would have 1 blacksmith for example as there was not enough work for 2 and transportation was prohibitive.

What's the problem then if there's not enough work for 2? You're close to a barter economy at that point. The blacksmith can't gouge the customers he depends on for everything else.

Individual sales matter less to the blacksmith than their customers. So, they might not gouge their customers but padding bills is common behavior after all selling 10% less at 20% higher profit is a net gain. Consider how important the internet is to you vs an extra 20$ a month in profit is for a multi billion dollar company.

Its not padding though. Its picking the right business where the market will accept higher margins than usual.

This is not a moral judgment. It is simply the seller doing what is in their best interest, just like they would in a competitive market.

The difference is that in a competitive market, this self-interest happens to lead producers to do what is in the public interest, but in the monopoly case it generally leads to lower production and higher prices than would be optimal. For more explanation, here's a Wikipedia article that jibes with my college Intro to Econ class:

https://en.wikipedia.org/wiki/Monopoly_price

Yup, and it feels like the blacksmith allocation is very similar to last-mile infrastructure investments. Its not worth putting two sets of infrastructure because either the existing operator is going undercut the new entrant, putting them out of business, or the competitors are going to split up some fraction of the market each, but now, both companies and their customers have to bear the full-cost of capital to wire and maintain the whole market area twice.

I'd love to hear those Austrians explain Windows and Google search

If only those were monopolies.

No true monopoly?

Well, yes. In the sense that I use search engines other than Google, and I know others who do the same. And I know many people who use operating systems other than Windows.

I get what you mean, but at the same time, a monopoly these are not. Just because there are companies that have a very large market share does not mean there are no alternatives.

15 years ago Microsoft had a monopoly on the x86 operating system market and used that position to unfairly take browser market share by bundling IE with Windows. They had agreements with almost all PC manufacturers to ensure Windows was installed on each PC sold.

> The plaintiffs alleged that Microsoft abused monopoly power on Intel-based personal computers in its handling of operating system and web browser sales. The issue central to the case was whether Microsoft was allowed to bundle its flagship Internet Explorer (IE) web browser software with its Microsoft Windows operating system. Bundling them together is alleged to have been responsible for Microsoft's victory in the browser wars as every Windows user had a copy of Internet Explorer. It was further alleged that this restricted the market for competing web browsers (such as Netscape Navigator or Opera) that were slow to download over a modem or had to be purchased at a store.

https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....

If true, a state-less people should be unable to create a state (a kind of monopoly) on their own if they start out as free...

To resolve the matter of being unallowed to plug anything non-AT&T into AT&T phone lines, you can just make a law stating that anything that can operate compatibly on the network is allowed to participate, something that allows consumers to bring their own device. You don't have to have utility-style control, nor do you have to break up the company, to resolve that particular issue.

This is exactly what happened because of the FCC in 1968.

https://en.m.wikipedia.org/wiki/Carterfone

I was about to post this and say that the parent comment does not remember this because it happened 4 years before their birth.

The Carterfone was an early exception because of its functionality.

Tbh, it happened a number of years before my birth as well, but some of us choose to learn the history of computation / networking. ;-)

If anyone else wants to know the significance of this device, it allowed for the argument to be made that any device should be able to be connected to the network, provided it did not interfere with it. It paved the way for non-AT&T equipment. The FAX and answering machines were allowed as a result (many people/industries still cling to these ideas; they are the reason voicemail hasn't gone the way of the dinosaur). Skype used it in '07 to

"petition for rulemaking was filed with the FCC by Skype, requesting the FCC to apply the Carterfone regulations to the wireless industry—which would mean that OEMs, portals and others will be able to offer wireless devices and services without the cellular operators needing to approve the handsets. However, on 1 April 2008, FCC chairman Kevin Martin indicated that he would oppose Skype's request.[3]"

Or, rather than be bothered passing a law for every possible case, Congress can delegate rule making authority to an agency like the FCC, which develops technical expertise in the domain.

> To resolve the matter of being unallowed to plug anything non-AT&T into AT&T phone lines, you can just make a law stating that anything that can operate compatibly on the network is allowed to participate,

That's pretty much what the Open Internet Order (both the 2010 one that was, except for transparency provisions, struck down and the current one that was just upheld by the same court that struck down the earlier one) does.

> You don't have to have utility-style control,

Which, largely, the FCC isn't doing here. Now, the FCC had invoke the provisions which allow utility-style control because the courts previously struck down its attempt to institute similar "people can plug legal devices into their internet connections and access legal content over their internet connection" rules without invoking the "telecommunication service" common carrier, "utility-style" provisions of the law.

But, while the details of the current order are different from the 2010 order (for one, more of the provisions apply to mobile broadband in the same ways as fixed broadband, because that market had matured in the intervening time period such that the argument that it was too new and evolving to know if the same style of regulation would be appropriate), it mostly doesn't apply "utility style" regulation, even though it invokes authority which would allow utility-style regulation.

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