Crawford on Telco Monopolies

Nice profile of Susan Crawford, highlighting her campaign against telco internet monopolies, by David Carr in today’s NYT.

A taste of Telecom’s Big Players Hold Back the Future:

Susan Crawford, a professor at [Cardozo School of Law], has written a book, “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” that offers a calm but chilling state-of-play on the information age in the United States. She is on a permanent campaign, speaking at schools, conferences and companies — she was at Google last week — and in front of Congress, asserting that the status quo has been great for providers but an expensive mess for everyone else.

Ms. Crawford argues that the airwaves, the cable systems and even access to the Internet itself have been overtaken by monopolists who resist innovation and chronically overcharge consumers.

The 1996 Telecommunications Act, which was meant to lay down track to foster competition in a new age, allowed cable companies and telecoms to simply divide markets and merge their way to monopoly. If you are looking for the answer to why much of the developed world has cheap, reliable connections to the Internet while America seems just one step ahead of the dial-up era, her office — or her book — would be a good place to find out.

‘Calm but chilling’ – that’s Susan when she’s doing business; she’s warm and funny when off duty.

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One Response to Crawford on Telco Monopolies

  1. Ambrose Mnemopolous says:

    “cable systems and even access to the Internet itself have been overtaken by monopolists who resist innovation and chronically overcharge consumers”

    Fiscal conservatives worried about “regulation” distorting markets would do better to focus their attention on monopoly and its cousin oligopoly. Among industry, these types of business models represent the dominant economic forces.

    Coke and Pepsi, for example, don’t compete on the basis of cost economics: they sell more or less the same product in the same packaging at the same price point. The main difference is symbolic: branding. Since mature corporations are risk averse, neither starts a price war that they could potentially lose, so all firms collude to maintain market stability. This undermines the free market: if a competition is fair, the outcome is certain; but since shareholders want a predictable return on investment, much of the activity of large industrial firms consists of eliminating market forces at every opportunity. In this context, mergers and acquisitions assume the role of innovation.

    You can see this sort of market arrangement in almost every corner of industry: Monsanto sells 90% of the seed for the US soybean crop, ADM processes 50% of us ethanol, Intel makes 85% of CPU’s, Windows sells 90% of operating systems, most cities have exactly one “choice” of cable TV provider.

    Monopoly and oligopoly do far more to distort markets than “regulation.” In fact, just as liberty requires the protection of laws, healthy markets require the protection of regulation.

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