Apple’s new iPhone augurs the inevitable return of the Bell telephone monopoly
11th June 2008
Or, at least, one of the handwringers at Slate magazine thinks so.
The underlying reasons for Bell dominance are Washington politics and the economics of natural monopoly. Some markets, because of the sheer costs of being a player, tend toward either a single firm or a small number of firms. Infrastructure and utility markets are the classic examples: bridges, plumbing, and electric systems. Everyone hoped and thought the wireless market would be different. But it’s not, in part because of well-meaning policies. “Fair” spectrum auctions cost billions and thereby create the conditions of natural monopoly, over time making the industry a one- or two-horse show.
You’d think that those who were aghast at monopolies would point that attitude at the government, the fons et origo of monopoly. But they never do.