Your argument is exactly the problem. The fragmentation is what would happen, and the consumers suffer from it rather than benefit from it. This has been proven over and over again by history. When AT&T was broken up, there were like a hundred smaller players, incompatible with each other, and everyone has to pay extra cost to communicate with each other. It is a backward step for the society. The consumers benefit from nothing. Don't just assume more smaller companies means better competition and better for the consumers. It is not necessarily true.
Antitrust enforcement on large platforms should be done by enforcing vertical separation and interoperability, not by simple breakup. Even the AT&T breakup didn't create a plurality of incompatible landline networks; the resulting companies were all connected in a single phone network, and could seamlessly interoperate. A large interoperable platform can easily preserve its total market share over any foreign competitor aspiring to a monopoly of their own, since it derives greater benefits from network effects.
I can see how you feel in your specific position, but the better solution would be for AT&T and Verizon to lose their unbalanced share in the market, not for further consolidation of the smaller providers.
What does breaking up a company actually do for the consumer? I don't think telecoms are any better for the consumer decades after we broke Bell. There is strong incentive to just form a cartel like telecoms today rather than a competitive environment that is beneficial for the consumer.
Facebook and other tech companies are a great example of what would have happened if AT&T had not been split up for monopolistic practices. AT&T would have become a middleman in all communications. Can you imagine having to pay AT&T and other internet providers a chunk of your on-line revenue? That is what Facebook, Apple, Twitter and others are doing.
The new monopolistic middlemen are taking a big percentage of the world economy just because they are providing the infrastructure needed to run business. They decide who can reach consumers and who cannot. It is not sustainable.
Right, ditto with AT&T. That's the point. Monopolies haven't always been able to resist being broken up -- but they have always been able to arrange the breakup so that the pieces don't compete and don't shift bargaining power to the consumer.
> The breakup of the Bell system just resulted in regional monopolies for example.
The breakup resulted in a massive consumer bonanza, as long-distance communications became too cheap to meter. The regional monopolies it failed to address, on the other hand, held back the deployment regional broadband for decades -- and have since used the outsize profits from their lousy monopoly business to eat up many players in competitive markets.
But the imperfection of the breakup isn't an argument for leaving monopolies alone. It's hard to believe that companies like Google would even exist today if AT&T had held their monopoly. What new "Googles" are we missing -- and don't even know we're missing -- because Google subsidized things like Android and YouTube?
> The Bell breakup didn't really help, as some of the Baby Bells later merged into AT&T, though alernate equipment mfgs. and long-distance providers emerged.
Breakups work when they separate a vertically integrated monopoly. You separate Unix from AT&T and it thrives. Netflix is better than Cable TV specifically because it isn't the cable company, and separating TV service from the last mile provider would be useful. In general, prohibiting a monopolist from operating in any vertical markets is useful, because it prevents the monopoly from being extended into the other markets.
The baby bells were separated horizontally -- and they each still had a regional phone monopoly. That doesn't work.
The breakup of the Bell System was a huge failure. When they were separate they never actually tried to compete with each other and then they just bought each other back up again.
What actually created competition for the telephone network was the internet. Competition from cable and satellite and cellular.
That's what you need. Something similar but not exactly the same, so they can each carve out a niche and provide a backstop against the most flagrant abuses but they aren't in such direct competition that they're more inclined to cooperate than compete. So that you have companies who can make choices knowing that their position is different than their competitors and the competitor can't just mirror their action to neutralize its competitive advantage, which otherwise removes any incentive to be the first to engage in pro-consumer behavior.
that's not how anti-trust issues are dealt with in the US, conglomerates are broken up so preserve the value of the existing buinesses but break the monopoly, not just legislating a business line out of existance, Bell telephone into a bunch of smaller providers for instance.
You are assuming that competition will only come from smaller entities. My comment was simplistic because each scenario is different and I was speaking in the general case. Standard Oil had lost a lot of market share by the time it was broken up. AT&T existed as monopoly because government had heavily regulated the telecommunications industry.
The point is that big companies with financial backing will use market advantage to stifle competition before it gets a chance (e.g. buying up the spectrum for cell phones, lobbying to prevent broadband competitors, patenting very basic concepts, buying up competition in its infancy).
You can argue they missed the boat on buying youtube and putting it to their own ends (e.g. YouTube prime is only comcast subscribers). It sounds like you want to disagree with me, but my two points are [and you haven't really provided arguments against either]
1. There is insufficient competition in the market (cell phones, ISP, computer parts, and many others). Much of this is due to deliberate actions by larger companies to protect their pie.
2. The consolidation of media is bad for consumers, and its death is good. The level playing field of a public internet made all the difference.
I am saying that despite people's concerns that consolidation in the wireless market will allow AT&T to abuse customers, the wireless market is already so intrinsically consolidated due to capital requirements for entry that AT&T was already asymptotically close to the maximal level of customer abuse it could inflict. This is similar to the argument security people have about the "Microsoft monoculture", as if 2-3 more operating systems were going to be anything more than a speed bump to attackers. One is a monopoly. 2-5 is still a cartel.
Isn't the only way to fix the competition problem more administrative grey goo? I have worked in this industry. There is a nice history of buying up all competitors... Especially when the competitors used to be parts of you.
Did you forget the governments attempt to break up AT&T already?
I think this is generally a good thing for consumers. One strong company with a solid network can provide more effective competition against Verizon and AT&T than two weak companies with crappy networks can separately.
As much as people like to talk up the AT&T breakup, it wasn't all that effective because it just created regional monopolies with the silly local/long distance split.
Splitting up network companies and retailers might have been more interesting, but there's still the issue of having a monopoly on the last mile of copper.
I can only argue back that the state of AT&T was such that it was such a massively profitable entity that exuded such power in terms of resources that what you are describing would not have been unique to AT&T had a less monopolistic situation arisen. The technologies that AT&T advanced, while notable, are far from impossible to have emerged had other entities had a fair share of the resources that AT&T monopolized.
To say AT&T should not have been broken-up due to its achievements is akin to say that Mussolini should have stayed in power because "he made the trains run on time". Yes, maybe, but at what other, hidden costs?
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