“Monopolies” Then vs. Now

“Monopoly” basically means a company owns one sector and sniffles any other company getting involved. In the early 1900s, Standard Oil used to own 90% of the country’s gas and oil distribution. Now basically many of those descendants had merged and some sold to global entities.

By the 1950s, the American Telephone and Telegraph company owned 90% of the US telephone lines and interconnects. AT&T was the Department of Justice’s top enemy. That same decade, they were ordered to sell off their Canadian and Asian arm; and in 1956, they were ordered not go into the data processing business (“computers”) despite Bell Labs inventing the transistor that would be the key component in all computers by the 1960s.

By the 1970s, AT&T was yet again under watch by the Feds; this time stifling competition for the lucrative long distance business. By 1980, AT&T was sued by the D.O.J., and was punished for almost a couple years, while AT&T had double the lawyers the D.O.J. had; AT&T made basically a plea deal to Judge Harold Greene in early 1982 known as the Consent Decree that would later become the Divestiture that would occur on January 1st, 1984.

AT&T had several options, they could’ve sold off the interconnect (that is phones, and telephony switching equipment), sell off the Long Lines division and keep the 22 Bell Operating Companies; but thought they should be in the computer business, and decided to pull a Standard Oil and spin off the local dial tone business into 7 companies. By 1995, AT&T would begin to sell off their manufacturing business into a new company called Lucent; then sell off the computer business of NCR that failed, not even 4 years prior.

AT&T was really a stale company, that was bought up by a Baby Bell in 2005, SBC, that kept the legacy name; but for all intensive purposes ruined the rest of the telecom industry.

AT&T to the Baby Boomers has so much hate and vitriol; based on popular opinions, known as populism, some Americans hated AT&T because of their “monopoly” they couldn’t elaborate. Millennials hate AT&T by name only, because so many grew up in the SBC/BellSouth days. For sure AT&T was an institution; and like any institution it wasn’t perfect. There were good people, the chairman of AT&T announcing the initial Consent Decree, had announced it in such somber tone. Charlie Brown, the chairman who began his career as a lineman; with his parents working in the Bell System. There was once upon a time before coding, people worked up the ranks but never forgot their roots.

1984  – Coincidental New Order

If we want to blame Facebook, Twitter, Apple, Netflix, Amazon for a “monopoly”, let’s go back to all the intellectual hacks like Scott Galloway at NYU preach: “innovation”. Innovation to me is just an other i-word. It’s a nice cute lofty, intellectual living in some literal  institution in a minimalist way, sitting on a floor believing a future can be made. That’s how I see “innovation” a very Left Coast kinda thing. It would be highly naive to believe that AT&T would create the next Facebook or the iPad, anyone who understands telecom, would know that. Secondly, “competition” is just a bullshit view just like the i-Word.

“Competition” for “the consumer” that is the person who figuratively has money in his pocket, and he use that money for three different brands, the more “brands” (that might likely be the same holding company as the perceived “competitor”); he doesn’t know and doesn’t’ care. He wants his dialtone “cheap”, so he can get some other cheap things as well.

Competition supposedly lowers prices; but it’s harder to make money; especially to power and cool those advanced 5ESS switches. So how can you also control charges between state borders? This was never thought of during the D.O.J. case in the 80s. In short the mergers of the 3 of 7 Baby Bells that became 3 big telecom companies was in direct result of focusing on the “consumer”.

AT&T today, vis-a-vis Southwestern Bell and BellSouth; is nothing but a large scale local telephone company that happens to own many other telco services as well as WarnerMedia and DirecTV.


FAANG (Today’s Modern “Monopoly”)

Facebook, Apple, Amazon, Netflix, and Google is an acronym for an asset bubble created by the pundits on Wall Street. These companies combined have a market cap of $5 trillion dollars! Why is it OK for FANNG to have a monopoly but not the old AT&T?

Again pundits, Mr. Galloway also used the 1982 Consent Decree on some of his cable news appearances with the current dilemma. Facebook was a slight innovation to what existed; Instagram was for smartphones. People wanted to share pictures. Some like Insta over Facebook. In 2012, Facebook needed money – quick and the quick rich scheme was to buy out Instagram. Now Facebook prints money and yet the “profits” Facebook is making is not to pay off debt to data center farms, and employees. It’s for one man – Mark Zuckerberg. A company makes “profits” to return to any shareholder that they use their money for on a quarterly basis. (This is 6th grade math for you.)

Because the companies mask themselves under Title II or Section 230 of the Communications Decency Act; and depending on what issue of the day; said regulations was supposed to intend to be for a cyber library. But what happened was the library became a large mall; and it became uber commercialized. The regulations didn’t become outdated per se, the tech companies wanted these laws to be deprecated for their own political agenda.

Since the dot-com bubble; many management and executive level employees are hundreds thousandairs or straight up millionaires, and needing to spend that money to prevent being taxed. So the Bay Area’s home prices went up prior to COVID19. A ranch house that I grew up in Londonderry could easily be a cool million or more in the SV then here in New Hampshire

The AT&T of yesteryear had many people who put a days work. Sure they were unionized, sure there was some slacks and hacks; but at least there they had contributed to society. The boys-only culture of coding and engineering has brought some people joy; but you know something some of those companies in that 5 letter acronym could be questioned for importance. AT&T was an essential company for many if not for all Americans. You could make a case that Facebook and Netflix is not essential.

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