SBC, AT&T say Bell breakup doesn't work

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FCC in 1984 *CREATED* monopolies - and killed competition

Little before 1984, yes AT&T had become too big, and too lonely; in the last years, AT&T had bought most big competitors. So it did get asleep and arrogant. But:

- in the 1950-60, US Telcos (telephone companies) had been competing and delivering great and cheap services; here in France, where one had in 1955 to wait for 5 years to get a phone line (with no choice: just the single line, expensive calls, the single model of black ebonite round dial phone, and frequent disconnections), people were coming back from America, reporting that in N.Y. you just called 3 companies, and they competed to ask you on which day and hour in the coming week you wanted them to come install the phone, which model, which ringing, which subscription plan; the local calls were free, the long distance and the subscription cheap.

- in the 1970, telcos (telephone companies) got big by merging and buying each others, until AT&T remained the only one, and quickly became too big, arrogant, and stalled their progress. But that was a dominant position, not a law-ordered monopoly: if government hadn't commited business interference in that field, you would probably soon had seen some people launching new companies to challenge AT&T by offerring better telephone service; just like Microsoft in 1975 could launch itself to challenge then-dominant IBM.

- in 1984, FCC by breaking AT&T ("MaBell") built many monopolies ("BabyBells": regional and Long-Distance companies) where none existed before: indeed, to prevent BabyBells to merge back, FCC had to make a law preventing each one from operating in any other one's field; and of course, elementary justice forced that law to also prevent any *other* company from operating in a BabyBell's field: this was exactly building regional (and long-distance) monopolies, right where no monopoly at all had existed before.

- in 1984-2005, those FCC-installed monopolies (Regional and Long Distance Baby Bells), content with their decades-craved and finally law-enforced monopolies, lost any reason to spend money or effort to improve, and could get asleep on their insured money incoming flow; the residual "innovation" you see in telephone is much smaller than the one that happenned in other fields, like IT; for instance:

--- in telephone, halving the prices in 10 years is seen as a major improvement;
--- in IT, none *speaks* of major improvement, they *do* it instead: the graphic cards that people struggled to buy $30,000 from Silicon Graphics in 1993, wouldn't find a buyer at $20 in sales in 2005.

Finally you are acknowledging that FCC *killed* competition when you write ? Where I live we only have access to Qwest, and believe me if there was a competitor I could go to I would jump at it ?: if you *REALLY* want competition, then you simply roll back to 1960 by abrogating all the laws that interfere in business.

Paris, Wed 23 Feb 2005 16:32:10 +0100

Posted by: Michel Merlin   Posted on: 02/23/05 You are currently: a Guest | Members login | Terms of Use

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