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From: Brent on 19 Oct 2009 13:56 On 2009-10-19, pbj <postittothenewsgroup(a)nospam.com> wrote: > On Mon, 19 Oct 2009 16:36:10 +0000, Brent wrote: > >> On 2009-10-19, Larry Sheldon <lfsheldon(a)gmail.com> wrote: >>> gpsman wrote: >>>> On Oct 19, 9:00 am, Brent <tetraethylleadREMOVET...(a)yahoo.com> wrote: >>>>> Explain how a monopoly or cartel can endure without government >>>>> intervention on behalf of the monopoly or cartel. >>>> >>>> Microsoft. >>> >>> >>> >>> Ha ha. I get it! (for those scoring at home gpsman is being >>> sarcastic.) >> >> You give him too much credit. I'll wager he thinks microsoft is a >> monopoly because of the anti-trust charges and large market share. >> >> For the benefit of gpstroll I'll explain it... Microsoft like walmart >> became a target because of being large, profitable, and lacking paid >> political protection. Political types can smell money and they will >> attack to get it. What's the use of running a protection racket if the >> threats are never carried out on those who aren't paying? That explains >> the anti-trust action. Once microsoft started paying protection it >> pretty much just went away. >> >> Microsoft is and has never been a monopoly. It has engaged in various >> questionable business practices by leveraging that market share. It got >> that market share because it a) got the business from IBM for an OS. b) >> businesses wanted to stick with IBM. c) Apple (and others) used their >> OSes as a way to sell their hardware. >> >> The current MacOS comes from NeXTSTEP which was odd in that it ran on >> NeXT, Sun, Hp, and intel PC hardware. Mac's hardware is now largely >> based on standard intel PC hardware. If MacOS were offered for Intel >> machines in general their OS market share would grow. However their >> hardware sales would fall like a stone. Apple wants to retain their >> hardware business even if it's just becoming standard stuff in stylish >> packaging. > > Hoo, boy. I just gotta x-post this one to COLA. > > Have fun, guys, and don't get blood on the carpet. :-) Why? Because I left out linux? There's a reason. Linux is so far beyond gpstroll it isn't even worth trying to explain that to him. Trying to go beyond simple buy-it-at-the-mall computing to him is a waste of my time. Sometimes the level of the audience has to be considered, hence the limited discussion. If you want to explain the server and dedicated machine market (things like security DVRs and the like) to gpstroll, go ahead.
From: hancock4 on 19 Oct 2009 14:01 On Oct 19, 12:36 pm, Brent <tetraethylleadREMOVET...(a)yahoo.com> wrote: > Microsoft like walmart became a target because of being large, profitable . . . If a business becomes large and has a high market share, it is subject to anti-trust prosecution, even if it did nothing wrong to become large and powerful. Simply "being" is enough. That's the way anti- trust laws were set up 100 years ago. If a company engaged in improper conduct along the way, it will be subject to additional penalties. In its heydey GM was very powerful and could've controlled a huge chunk of the US automotive market. But GM carefully limited itself to how much market share it would have. As a result it avoided anti- trust actions. GM most likely could've squeezed the smaller automakers--Studebaker, American Motors and predecessors, etc.--out of business long before they shut down if GM so wanted. Unfortunately for GM, it was so powerful and didn't have to do much to stay on top it got fat and lazy (as did Ford and Chrysler), and when superior foreign cars came in they smashed through. The US Big 3 never could catch up, they forgot about high quality control and focused on "longer, lower, more chrome" Other companies that became very large and gained extensive market share by being the best at what they did did get targeted. In some cases this was good policy, in other cases bad policy.
From: Brent on 19 Oct 2009 17:05 On 2009-10-19, Rex Ballard <rex.ballard(a)gmail.com> wrote: Long post snipped. I was writing a point by point reply to that mess and not even half way through connection dropped and the post was lost. I'm not redoing it. Basically what you went through a lot of trouble writing was how AT&T had a government enforced monopoly thanks to a number of reasons. How regulation kept AT&T's monopoly secure from competition. Then you went through microsoft's shoddy product, poor treatment of customers by making false promises, and playing to purchasing decision makers that could lose their job by choosing superior competiors' product (btw, windows didn't even get where nextstep was in 1988 until they launched XP, so superior stuff did exist in the 80s) but keep it no matter how crappy MS's stuff was. Microsoft screwed their customers and their partners yet prospered because well, they played the political game. You also brought up the fine detail of how microsoft bought government protection after the government thugs went into their 'store' and threw things a round a bit. Again, no disagreement. Another topic raised was microsoft's property rights violations of other companies. Well, guess who's supposed to protect property rights? The government. You then went on about how Gates had the benefit of his father knowing how to use the government court system. None of which makes microsoft a monopoly, but it does show how monopoly is created and sustained, by playing _with_ the state. Then you went into the mismanagement of apple and how they got where they are. Ultimately they've chosen their market and they keep their OS as locked to their hardware as they can. That lock means it will never grow bigger than it is.
From: hancock4 on 19 Oct 2009 17:33 On Oct 19, 4:00 pm, Rex Ballard <rex.ball...(a)gmail.com> wrote: > AT&T strung thousands of telephone wires and was able to prevent other > companies from stringing similar wires in other areas because the > standards were different and equipment would be damaged.(deliberately > or accidentally). Not correct. AT&T maintained control because it had the patents. When the patents ran out competitors certainly did string wires creating a confusing situation. Patent protection--an explicit constitutional right--conflicts with anti-trust protections since patent protection gives a monopoly while anti-trust makes such monopolies illegal. It's an issue that has yet to be resolved. One problem today is drug companies with a new drug that is under patent protection. The mfr can and does charge a steep price for it until the patent runs out (or someone comes up with an alternative), perfectly legally. AT&T is not a good example to use as a monopoly because it was extensively regulated by the government. It was prohibited from entering any other business line, for example, and could only charge what the govt said it could. It had to provide below-cost service per govt mandate. > From about 1910 to 1983, AT&T enjoyed a monopoly control of the > market, but that monopoly power was being challenged by MCI, who > initially started by offering to install pay phones in restaurants and > bars, and share part of the revenue from the pay phone with the bar. > Until that offer was made, AT&T charged more for the pay phone than > for a residential phone, AND they kept all of the money deposited into > the machine, as well as all collect charges. Completely false. If a pay phone was profitable, AT&T always paid commissions to the property owner where the phone was located. MCI was not interested in local phones or local service. Further, AT&T did NOT enjoy a monopoly control of the phone system. There were many places in the US where local and toll telephone service was provided by an independent company, which still exist to this day providing service in their territories. In addition, many large organizations had private telephone networks which use non-AT&T equipment. Lastly, Western Union provided certain communciations services in competition with AT&T. > AT&T had enjoyed it's monopoly power with minimal government > regulation. Completely false. AT&T was heavilly regulated by state and federal government agencies. For example, when Bell Labs invented something, anyone could license that patent for a nominal fee. A great many places made good use of the transistor. A normal company is not required to license out its patents, especially for a low fee. > When AT&T began to convert it's analog lines to digital > links, there was both the opportunity to put more phone connections on > a given length of cable or circuit, and the ability to share those > lines with other services, such as computer-to-computer > communications. Completely false. Analog to digital conversion had nothing to do with any policy or process, it was simply a different way to carry signals. AT&T certainly carried multiple connections on a single analog line and inter connected computers long before modern digital lines came about. Information processing machine signals were carried by telegraph lines as far back as 1940. > The competition between phone companies an > cable companies for both computer to computer and telephone service > triggered an explosion in bandwidth and enhanced services, as well as > significantly lowering the costs of the communications circuits > themselves. These cost reductions were passed on to consumers who > went from paying as much as 50 cents per minute to paying as little as > 3 cents per minute for long distance services anywhere in the United > States. Incorrect. The drop in long distance rates was a _continuing process_ since WW II as AT&T rolled out more efficient techology. A major decrease in long distance rates occured in 1971 for all subscribers long before any "competition". Those who could call during off peak times and would dial direct would get additional discounts; with calls as low as 5c a minute. Continuing improvements in technology would result in further rate reductions. As new overseas cables were laid, overseas calls, once horrendously expensive, became cheap. Govt regulatory policy was such that long distance was seen as a premium service and priced accordingly, while local service was seen as a critical service and priced cheap, even below cost. A bare bones phone line, including a telephone set, cost only $3/month for anyone. After the 1983 divesture, policy changed ending the cross subsidization. Local rates went up and long distance went down. > Today, cellular, internet, voip, and traditional telephony traffic > share the same circuits with video All communications shared the same media going back to the invention of the signal being carried. That is, television signals were carried along with voice calls, initially on coaxial cable and then on microwave. Data calls were carried along with TV and voice calls. This isn't anything new. With all due respect, there seems to be this myth that all sorts of wonderful things happened at Divesture in 1983 because of Divesture. Technology was making huge leaps forward and prices were dropping prior to 1983. The big drop in comm prices was for the same reason computers, stereos, TV sets and other electronic goods dropped in price; the big price drops were not related to Divesture. --sources--Bell Labs history, Vol I, Vol II; Bell System engineering text 1975.
From: RonB on 19 Oct 2009 18:50
Larry Sheldon wrote: > AT & T had a government mandated and enforced a monopoly that evaporated > almost overnight when the government enforcement of the monopoly was > removed (some would argue that the monopoly power was removed because > the monopoly was beginning to crumble in-spite of heroic "code blue > efforts"). I am uncertain about that. Government "mandated" telephone monopoly? Where do you get this? As early as 1913, in The Kingsbury Agreement, AT&T agreed to divest themselves of their Western Union division, and agreed not to buy more telephone companies or keep competitors from interconnecting. AT&T and the government wrangled for years about AT&T's market share. In 1975 there were 1,618 telecoms (most small) but GTE had 10% of the market (AT&T had 85%.) When AT&T divested itself and formed the Baby Bells, obviously their business would be spread amongst several companies instead of being in one place. But it wasn't like AT&T "crumbled" from the onset of competition. When the Baby Bells were formed, people were still using the same phones they used before -- they still had the same technicians, the same CO's (company offices) -- it's just that there were now eight companies instead of one. Of course the share of each company is going to be smaller than the original, but the sum total remained the same. AT&T, the original parent company, now had to compete with new long distance carriers plus those carriers who had already existed (GTE and United Telecom, to name two). But it wasn't just competition that brought long distance rates down -- it was the nature of the business. Before AT&T was divested and split into the Baby Bells, they used long distance rates to subsidize local service. That was no longer necessary. So, while long distance rates went down, local service rates went up. So what do we have now? The new AT&T (SBC) is the combination of four of the seven Baby Bells (Ameritech (Chicago/Midwest), BellSouth, Pacific Telesis (California and surrounding areas) and Southwestern Bell, aka SBC, aka the new "AT&T"). Verizon is the combination of GTE (which was roughly the size of one of the Baby Bells, after the breakup) and Bell Atlantic (Eastern seaboard) who had previously acquired NYNEX (New York area). The only Baby Bell that has remained independent is Qwest (U.S. West). So we basically now have a duopoly. It's not like AT&T's Baby Bells were "competed" out of existence, they were just broken off and reformed. As for the original AT&T, they basically sold themselves off, piece by piece (the "shell" finally ending up being sold to SBC), even though they were doing relatively well in several markets including long distance and cable. So this whole concept that AT&T "crumbled" after the United States no longer propped up their monopoly is just malarkey. -- RonB "There's a story there...somewhere" |