Old man Brown, CEO of Ma Bell for decades, said that if the government forced the breakup of ATT phone rates would go sky high. He couldn't see that the way T had in mind to deliver phone service wasn't efficient. ATT couldn't afford to change and develop new technologies and they couldn't see where technology could go. If at that time you challenged them on that basis they would tell you that you were crazy. They had the mighty Bell Labs and they knew what there was to know.
After WWII ATT grew into a giant and could not easily move off the plan its management determined would optimize profitability, but the very thing that enabled them to realize their plan in scale, necessitated that what was created was narrow. Government's attitude was that competition doesn't work and this attitude was reinforced by the universities. Better to be safe with Ma Bell and regulate them so they couldn't be the monopoly they were. Regulate the profitability so they couldn't get too rich by stealing from the people. After all, who else was there to protect the people from the robber barons? The problem was that this whole scenario meant that profits weren't there to go into research and development. What evolved out of all these people trying to avoid monopoly and trying to advance telephony was neither avoidance nor advance.
So in the final analysis Brown thought his monopoly which he didn't it was, was the best and cheapest possible way to deliver phone service. It was an inefficient, bloated, hated as much or more than MSFT, unprofitable, failing company, yet this CEO could not see it. Phone rates have steadily declined since the breakup of ATT in the early '80s and has improved in quality though it is still unstable since so much technological change bottled up by smart professors and all-knowing CEOs has finally been released.
No. Don't tell me about what can't happen. You can go as far as TCI to see another pitiful case of management and government getting in there to do good to the cheers of the public. The public likes to pay the protection money. There's no feeling like being protected especially when you're being protected against your own best interest.
Who is T's competition in BB Internet? Only that which would be encouraged by the advent of another BB Internet source. DSL can't deliver BB. It emulates it on the low end and it is only an intermediate solution that has a maximum five years run. If T wins UMG, DSL may last ten years, since SBC and many others would then be forced to push it. ATHM has always considered DSL as its main competitor. Consider the effects of the RBOCs getting serious about DSL implementation.
That is undermined if you have a Bork Rule defined market, because just as Ma Bell came to see, the dynamism of competition provokes all participants to create a great thing. That has the power to exclude DSL, or better said, exclude an expensive excursion into an inferior technology. or maybe even invites the other side that would develop DSL to jump in and push their own brand of BB. We are free to choose which way we want to go. It is either the inferior short run profitability unripe ego self interest way or it is the true wealth that accrues to all from the competitive way. |
