It's Worse Than You Think - Time to Check Telecomm in a Big Way

Tim Wu's recent article on the recombination of Ma Bell provides a fascinating history of AT&T and explores the future of telecomm. But the article misses a major point when talking about the danger of monopoly and how to handle it - that is the potential for governmental or another party's abuse of the concentration of monopoly power. This a big reason why the "dicing" Tim refers to is also necessary.

I think most of the readers of this blog are familiar with complicity by certain telecomm companies with the US government to spy on Americans. A benefit of having several competing telecomms is that market forces check their actions. In this case, companies like Cingular were able to say that they rejected the advances of the NSA, and consumers were able to choose a spy-free provider.

Even if you disagree that the rejectors of the NSA machinations gain any market advantage from the move (their PR units thought they did), at the very least it's better for citizens that the U.S. government, or any other party, has to make its shady deals with a number of parties. Concentrating so much power leaves the door wide open to malice and greed, and enables unilateral corruption. I for one think we see it in Iraq too, unilateral corruption by the U.S. Too much decision-making power in one group is a bad thing, and I'd like competing interests running the network.

Sure, dicing up the network along regional lines has cartel issues, because with a huge database of shared historical pricing information, it was easy for the regional Bells to collude without any overt contact. Obviously Tim took a couple economics courses like the rest of us, but he clearly forgets the wise words of Lord Acton. Cliched or not, absolute power corrupts absolutely.

I'm not so scared of slightly jacked prices or dampened innovation so much as I'm scared of my phone and my government teaming up to send me to 1984. We need checks and balances among the network bureaucracy itself. Demanding they play nice with the ISPs won't be enough - we need opposing forces in different rooms making decisions about the network, or one thing will lead to another as it always does.