House owner, part 5
There's a reason monopolies are illegal (although making a strong comeback under decades of Republican misrule). Without competition to challenge it, a company can set its own policies, fees, and standards regardless of their effects on the consumers they supposedly serve. And we just have to take it.
Case in point: TBO and I still don't have phone service, even after nearly a month of owning the house. Now, way back in the dark past, phone service was a monopoly, true, but Ma Bell was providing what many believed to be a public service and therefore exempt from the laws governing such things. In compensation, Ma Bell was also highly regulated so as to guard against the worst excesses a monopoly would naturally employ. In the mid-1980s, Ma Bell lost its monopoly status in the infamous break up decreed by the Supreme Court. A good thing? Not necessarily, because at the same time, the laws and regulatory power vested in the federal government regarding monopolies and business in general were also waning.
The end result is that we now have local monopolies on many communication tools, such as phone, cable, and internet services and absolutely no recourse as consumers other than to withdraw from the community entirely. If I want to get phone service at a reasonable price, I have no choice, because there are only 2 providers in my area: AT&T and Time Warner. No monopoly there, you say? (As if a duopoly is so much better . . .) Wait one minute. There is only one cable company that serves my neighborhood--Time Warner. The effect is that I can do one of 2 things if I want to remain connected to the 21st century: get my 3 services a la carte from the few providers out there, or get a "bundled service" from the only provider that has all 3: Time Warner. Buying all 3 separately would cost roughly $200/month (an obscene amount, imho), while Time Warner offers all 2 together for only a little more than 1/2 that.
Gee, whatever should I do?
So, even though there is no monopoly in the strictest legal sense, there sure is one functionally. And if you think Time Warner and AT&T don't know this and price their services (and avoid competition for coverage areas, and give lousy customer service) accordingly, you are a fool.
Case in point: TBO and I still don't have phone service, even after nearly a month of owning the house. Now, way back in the dark past, phone service was a monopoly, true, but Ma Bell was providing what many believed to be a public service and therefore exempt from the laws governing such things. In compensation, Ma Bell was also highly regulated so as to guard against the worst excesses a monopoly would naturally employ. In the mid-1980s, Ma Bell lost its monopoly status in the infamous break up decreed by the Supreme Court. A good thing? Not necessarily, because at the same time, the laws and regulatory power vested in the federal government regarding monopolies and business in general were also waning.
The end result is that we now have local monopolies on many communication tools, such as phone, cable, and internet services and absolutely no recourse as consumers other than to withdraw from the community entirely. If I want to get phone service at a reasonable price, I have no choice, because there are only 2 providers in my area: AT&T and Time Warner. No monopoly there, you say? (As if a duopoly is so much better . . .) Wait one minute. There is only one cable company that serves my neighborhood--Time Warner. The effect is that I can do one of 2 things if I want to remain connected to the 21st century: get my 3 services a la carte from the few providers out there, or get a "bundled service" from the only provider that has all 3: Time Warner. Buying all 3 separately would cost roughly $200/month (an obscene amount, imho), while Time Warner offers all 2 together for only a little more than 1/2 that.
Gee, whatever should I do?
So, even though there is no monopoly in the strictest legal sense, there sure is one functionally. And if you think Time Warner and AT&T don't know this and price their services (and avoid competition for coverage areas, and give lousy customer service) accordingly, you are a fool.
posted by bryduck at 11:31 AM
3 Comments:
i have a friend who could tell you a nightmare story about verizon, including a $140 phone call to Hong Kong (it was supposed to be 4 cents a minute)...
then the verizon "customer service" person told him it "was his fault."
Boy, this was a really confused post. You call phone service a "public service" which was "exempt from the laws governing such things" (what such things, you don't make clear). Then you say the phone company was "also highly regulated." So, exempt or regulated, which is it?
Utilities, such as water, phone, power, were set up as monopolies in the 20th century because it was it was determined that it was most efficient to have one provider of services. That provider would have certain rules (such as universal service), but in exchange they got a guaranteed rate of return.
Cable is not a utility. When franchises were handed out years ago, municipalities decided that they wanted only one provider digging up the streets and hanging wire, so they usually (after intense competition) handed out only one franchise (they are a few communities where there is more than one franchised provider). But there is no guaranteed rate of return. Cable systems are built and maintained with private capital.
"Local monopolies" in "phone, cable, and internet services"? have you seen the penetration figures for DBS and telco video? Many consumers elect to take service from someone other than cable. In some markets, you can pick from cable, telco, and two DBS companies. You want phone service? Try Vonage. Or cancel your landline and use cellular.
Your post reveals not that there are no choices, but that you want a larger number of equally attractive choices that are also lower in price. As my collegaue Turk likes to say, "I'd like to own a Ferrari. But they don't sell them for $20,000, so I drive a Nissan."
1) The phone company was exempt from the laws governing monopolies until the breakup. At the same time, it was treated as if it were a utility--prices and profits were monitored and capped by federal statute. These are not mutually exclusive notions. The concept of considering TV (broadcast or otherwise) and internet as utilities is an extension of this original ideal; I am not saying they are actual utilities now, but there is precedent for that kind of governance over them--the FCC, for example, is supposed to regulate the operation of television stations and networks.
2) Your rebuttal in re: local monopolies misses my point. You're damn right I want a larger number of equally attractive options; who wouldn't? That's what a free market is supposed to look like. And that's exactly what isn't happening. I can't get AT&T DSL at my current address, regardless of how much I might want to pay them--because they don't even offer it here! The companies that do offer DSL here don't offer cable TV as well, etc. etc. The only company that provides all three to my address is Time Warner. So, as I said in my post, I can either buy 3 services from separate companies or save 1/2 my money and get them from the only provider of all. How is that not the same kind of result I would see from a monopoly?
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