Krugman: The Barons of Broadband
Last weeks big business news was the announcement that Comcast, a gigantic provider of cable TV and high-speed Internet service, has reached a deal to acquire Time Warner, which is merely huge. If regulators approve the deal, Comcast will be an overwhelmingly dominant player in the business, with around 30 million subscribers.
So let me ask two questions about the proposed deal. First, why would we even think about letting it go through? Second, when and why did we stop worrying about monopoly power?
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The point is that Comcast perfectly fits the old notion of monopolists as robber barons, so-called by analogy with medieval warlords who perched in their castles overlooking the Rhine, extracting tolls from all who passed. The Time Warner deal would in effect let Comcast strengthen its fortifications, which has to be a bad idea.
Interestingly, one cliché seems to be missing from the boilerplate arguments being deployed on behalf of this deal: I havent seen anyone arguing that the deal would promote innovation. Maybe thats because anyone trying to make that argument would be met with snorts of derision. In fact, a number of experts like Susan Crawford of Benjamin N. Cardozo School of Law, whose recent book Captive Audience bears directly on this case have argued that the power of giant telecommunication companies has stifled innovation, putting the United States increasingly behind other advanced countries.
And there are good reasons to believe that this isnt a story about just telecommunications, that monopoly power has become a significant drag on the U.S. economy as a whole.
http://mobile.nytimes.com/2014/02/17/opinion/krugman-barons-of-broadband.html
Enthusiast
(50,983 posts)they no longer concern themselves with trusts and monopolies.
SamKnause
(13,111 posts)Our corrupt politicians (the majority) and our out of touch "Supreme" Court LOVE monopolies !!!!
CTyankee
(63,914 posts)He makes one hell of a persuasive case about how monopolies stymie economic growth.
seabeckind
(1,957 posts)We have seen many, many articles along these lines.
What is so disconcerting is the hidden effects. Eg, if I am paying $100 more each month for my service, that means that I have $100 less that I can spend on other things...like restaurants or items to improve my quality of life (like better tires for my car). If the cable company put that money back into the economy, like in the form of wages or taxes, it would be better. But they don't.
Instead they have $45B available that they can use to eliminate competition and further strengthen their position.
And what wages they pay? To CEOs and execs who do the same thing with their income.
Related:
How Big Finance Crushes Innovation and Holds Back Our Economy
http://www.alternet.org/economy/economy-innovation?paging=off
CHART: Top U.S. Corporations Outsourced More Than 2.4 Million American Jobs Over The Last Decade
http://thinkprogress.org/economy/2011/04/19/159555/us-corporations-outsourced-americans/
How the Phone Companies Are Screwing America: The $320 Billion Broadband Rip-Off
http://www.alternet.org/story/148397/how_the_phone_companies_are_screwing_america%3A_the_%24320_billion_broadband_rip-off
The Myth of the Free Market
http://firedoglake.com/2010/05/25/the-myth-of-the-free-market/
I can't find my link to the article: What broke America's Job Machine but it doesn't matter much. The question is, what will we do about it? Elect more corporatists? They are their own monopoly.