If 'Big Tech' Is an Antitrust Problem, Why Are We Ignoring Telecom? (opens in new tab)

By any measure, telecom is a fairy concentrated market that creates antitrust concerns, relative to many other industries. But the comparison to telecom only highlights the market concentration in tech. There are four major wireless carriers, none with more than about a third of the market. Google has 90% of the search market. There are just two viable mobile OS competitors, and Android has 75% market share (50% in the US). Even within a given market, there is more competition in telecom. The big four cellular companies are nationwide. Verizon is just the sixth largest wireline carrier, has less than 40% market share across its FiOS footprint. That does not mean that telecom (or day health insurance) is a highly competitive market. It’s not. But at least search and mobile is even less competitive.

It also matters what is happening going forward. Even in areas with no wired competition, wireless (cellular and satellite) exerts competitive pressure. 15% of high income households have abandoned wired internet for cellular only, and that number is growing. (There are more cellular-only households by a large margin than ones that use something other than Google search.) Meanwhile, there is no viable competition in sight for Google Search or Android.

I would say the strongest example is wired telecom, which may not be a national monopoly but is certainly a local monopoly across nearly the whole country. The way the companies divvy up territory to avoid competition is probably what keeps U.S. prices so much higher than, say, Europe. I wonder if a case could be made for it being a cartel.

But yes, cellular and satellite providers have started to provide a saving grace of disruption in that market. We'll see if it ends up being enough.

Not a full defense, but telecom is already heavily regulated while tech companies are not regulated at all.

Who is "we", exactly? No-one is ignoring telecom monopolies, it's something people complain about all the damn time. Spoiler alert: it's because the telecom industry has spent decades embedding itself at the top levels of organizations like the FCC, and it's gotten worse since the arrival of the Trump administration. Is that good? No. Should we change it? Yes. Does any of this have anything to do with regulating big tech? No.

This stuff just feels like whataboutism to me. There's no reason we can't tackle both big tech and telecom. If wait turns then the telecom industry will just say "what about other utilities!". Those utilities will say "what about the defense industry!" or whatever the hell.

"What about these bad guys!!" just feels like an attempt to deflect attention away from tech.

Spoilers: it's because our regulatory, legislative, and judicial infrastructure exists to defend monied interests. We're incapable of taking collective action that reduces private property accumulation, so no monopoly busting.

Because even Comcast, the most evil of the telecom companies, doesn't put out a web browser that seeks to permanently entrench its ad business. In fact, it lets me use any browser I want.

The regulatory systems in the US since Reagan have been anemic, and if we believe in effective business competition there are probably very few industries that would have a good time if a new regulatory environment were put in place that is more... effective? I can't find the right word because I'm biased - I strongly believe in collectivism and strong regulatory environments.

When I look at major industries: social media (sadly, IMO), telecom, health care, transportation, military, and more; what I see are industries that need regulation in order to meet the needs of society, but that is based on my point of view of the world. My guess is that the folks with capital and data, and thus power, view the situation very differently, and are more focused on their own needs than those of a more nebulous society that has needs. I believe that this can be seen in the practices of businesses throughout the United States.

So, are "we" ignoring telecom? No, that headline is aggravating. Why isn't it "Antitrust issues in Telecom"? Because society has been trained to be enraged. Why? Because it serves those who already have power, and they disagree with me about how regulation should work.

I was forced this morning to have Comcast charge me $40 to install a cable to set up internet at my new place by an authorized technician. I hate Comcast SO much, and from what I can tell I don't seem to have another option, supposedly AT&T but the speeds are slow and their website says my apartment is not in service area.

Because telecom companies' monopolies are easy to understand. Google doesn't have to run wires to everyone's house. In fact, they tried and failed. It's a lot harder than building a website.

I've yet to see a telecom company tell anyone who they are allowed to communicate with or deny anyone service because they don't approve of their ideological views. That might only be tangential to antitrust issues but engaging in overreach is a good way to get the public against you which in turn makes it much easier for the government to come after you.

Economics 101 states that wasteful duplication of infrastructure is one of the few acceptable exceptions from the free market thesis. Natural monopolies should nevertheless be regulated to avoid suboptimal services.

What’s more interesting is the recent suggestions of seeing industries with a monopolistic business model such as social media as natural monopolies. Perhaps we should regulate Facebook rather than argue for breaking up telecoms?

I don't think anybody ignores that telecoms is a big monopoly problem; people know intimately that they have one or if they are lucky, two real options in any given market.

We busted up Ma Bell once long ago, and it has just coalesced back together. The capital costs and infrastructure tend towards it being a natural monopoly, so I don't think that we'll reasonably see a million telecom flowers bloom without putting the finger on the scale heavily.

Software is so much more ephemeral, and we have a much healthier oligopoly of big players. Even the sick old man of computing, IBM, is doing better than Time Warner did trying to compete in cable.

What happened to local loop unbundling? Is the problem that it didn't also apply to "cable"?

Telecom is a different kind of problem, and it is not clear that antitrust can effectively address it. From a comment of mine a couple days ago when someone here raised a similar question:

> Wouldn't it make more sense to break up broadband ISP monopolies first?

Probably not for the Department of Justice. Some problems with that approach:

1. If you are trying to address the issue of limited choice in ISPs, I don't see how breaking them up addresses that. If you split an ISP that has a monopoly in a state, say, into separate ISPs for, say, each county...you've just gone from having one monopoly to having several monopolies. The limited choice is because there is only one cable coming into my house, and splitting up the company that owns that cable doesn't change that.

Addressing that probably requires something like making the last mile data transport a regulated utility that ISPs operate on top of. That would probably require Congressional action and a new President to do nationwide or to allow states to do individually.

2. Competition among ISPs in a region can vary dramatically city to city, and even neighborhood to neighborhood. I've not extensively researched this so maybe this is wrong, but the impression I've gotten is that an ISP's prices in a region tend to be pretty similar between those places within the region where they are the only choice, and those places within the region where there are alternatives with similar performing alternatives. That could make it hard to show that the ISP is abusing its monopoly in those parts of its territory where it does not have competition.

3. Aside from rural areas that only have DSL via the phone company, in most places there are multiple ISPs available. It's pretty common to have both cable and DSL, and in many cities there is also a fiber option. There's also wireless options, ranging from the regular consumer service of AT&T, Sprint, T-Mobile, Verizon, and the various MVNOs that are built on those networks, and many places also have wireless available that is not based on the cellular networks.

You might argue that, say, cellular wireless is not really a viable option to Comcast or Charter or whoever the cable company is in a given area, due to the vast difference in speed. But you will have to actually make the argument. You won't be able to just say that they speed difference makes them different markets. You'll have to actually look at how people are using these various services and show that they really are not comparable.

I think that the factors in #2 and #3 make it almost impossible to win an antitrust case against a major ISP as a whole. The DoJ would have to bring smaller cases alleging monopolization in specific regions, tailored to the specific way the factors in #2 and #3 play out in that region.

Having to do this region by region, or even city by city in some regions, would make this a very long, expensive pursuit. (And where they win, there is still the question of whether or not there is an effective remedy they can apply).

Thus, it is probably better for the DoJ to leave this issue to Congress to deal with via legislation.

You should have seen it when it was just AT&T.

https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System

ENUM anyone? https://www.nominet.uk/search/enum - ha! (There used to be a page on the Nominet site about ENUM but now the ITU doc: https://www.itu.int/en/ITU-T/inr/enum/Documents/ENUM/ENUM%20... can't even spell Nominet correctly)

I should explain: In simple terms, ENUM allows you to turn a phone number into a SRV record that points at a PBX via a DNS lookup. The ITU allocates the zones to registrars, the zones neatly map to country codes - its a great idea.

However, as you can imagine this is not very popular with big telecoms who are used to charging by the second/minute and location by distance which is obviously bollocks when you turn a circuit switched network into a packet switched one that no longer routes calls via satellites to cross the Atlantic (eg). OK pricing and tech for "POTS" has come a long way since I were a lad but it is still a nice little earner over letting us lot do our own thing.

You can also imagine that Google, Facebook int al would also suffer a collective coronary should us lot be able to do our own comms without them.

I'm fairly sure that you (for a given value of you) can't remember the last time you used a "landline" but if ENUM was available it might have been a few minutes ago and not logged externally and charged as though it was 1970 sigh

Telecom is probably one of the industry groups lobbying for antitrust legislation/investigation against Google and its ilk.

In one sentence: It's not as much of a threat to traditional media, therefore we don't hear about it as much.

I think this is a poor take. Since Bork, anti-trust regulation has been an afterthought in Washington. The fact that DOJ, the same agency that bloodied Microsoft, is looking in another big tech company is very big news. DOJ lawyers aren't dumb, digging into BigTech will bring a lot of bodies to the surface and the culture of anti-trust regulation will change, eventually BigTeleco and BigAg will be next.

Because "Regulatory Capture" (google it) and because they have better lobbyists and have been greasing politicians for a much longer time.

Comparing software businesses with traditionally asset-heavy business such as wired telecom is disingenuous.

I hate Telecom monopolies as much as the next guy, but the comparison is so inaccurate to the point of being useless. What's next? Comparing 'Big Tech' to Utilities?

'Big Tech', unlike Telecom, has made itself friendless, having alienated pretty much everybody along the political spectrum, and that is a dangerous place to me with a field subject to such legal vagaries as antitrust law is. I am not talking here about lobbyists or about legal technicalities but rather about the visceral reaction we all can have as human beings to the basic question: do I sympathize or even relate to these people? At inception, Google, FB, et al. were seen as innovative, dynamic, helpful to average people and the like. Sadly, those days are long past and all too many people are instead inclined to reach for the nearest garlic clove in hopes of warding them off.

In the book "The Chickenshit Club"

There is some psychology amongst the regulators that results in them not fining or sanctioning large players because they don't want to make them go bankrupt and further consolidate the market.

You can have a monopoly in America, as long as you don't do anticompetitive things to get there, and don't do anticompetitive things while you are there from within your company. (protip: the trick is to change the laws and regulations to favor advantages you have and make it impossible for new entrants)

Checkout https://althea.org/ if you're interested in decentralized internet structure.

This is NOT vaporware. The theory behind it is simple and solid. It works and is happening right now. The fact that is uses shitcoins doesn't make it a scandal or get-rich-quick scheme.

Because Big Tech siphons ad dollars from traditional media? I'm being glib, of course, but I can't help but wonder if that isn't one big reason.

Because there is not antitrust investigation there is only making the 4 pillars come to heal and become part of the NSA.

If I were more cynical, I would say that the antitrust concerns are being focused on in big tech in part due to the perception of anti-conservative bias or de-platforming, and the telecoms, other than in the case of owning CNN, have no such perception associated with them.

Telcos and ISPs are the bigger threat by far in a fixed local monopoly physical market that is hard to enter.

Telecom/ISPs are afraid of antitrust, being labeled a utility and competition, they work overtime to throw the blame onto Big Tech starting way back with net neutrality and Netflix share of the market. It wasn't Netflix using the data it was the users. Since then ISPs have been funding mud slinging against Big Tech so they can compete with them on ads by removing privacy protections and content so they removed net neutrality against the will of everyone [1].

Maybe 5G will shake up the telcos and ISPs controls they have bribed to put in place using regulatory capture. The attack on Big Tech is partially funded by them just like oil companies pushed anti-nuclear energy along with opposition to green tech. Big Oil funded many of the anti-nuclear campaigns, probably even had some sabotage involved [2].

ISPs aren't even using the market to get ahead with good products like Big Tech, they are using bribes and regulations that keep them in their false monopolies and fixed markets.

ISPs share fixed local monopoly markets by putting one good ISP and a bunch of smaller ones that don't compete like a Game of Thrones.

FCC reports find almost no broadband competition at 100Mbps speeds, even at 25Mbps, 43 percent of the US had zero ISPs or just one [3]. For a modern broadband innovative market this is unacceptable, there are industries of the future that rely on fast network we can't even get going due to the feet dragging and rent-seeking local monopolies of the ISPs/telcos.

The one time innovators, the ISPs/telcos, have become local monopolies directly harming innovation and network growth, they now have data caps, net neutrality add-ons (like Cox Elite Gamer), content options and privacy protections removed to discourage and reward broadband providers for NOT growing but nickel and diming people [1].

I remember in the 90s when broadband, cable, ISPs, telcos were innovative and the leaps from landline to other sources was amazing. They were innovative then, run by engineers and product people. Now they are rent seekers, holding back innovation, run by HBS style MBAs where everything is a resource and every dime extracted with minimal reasons to innovate or expand without rent-seeking controls in place.

Imagine if water, electricity or other utilities were this toll road like, we'd live in less quality of life.

The network is a utility and platform to innovate and build on, not extract the value and slow innovation

[1] https://www.eff.org/deeplinks/2017/04/fcc-announces-plan-aba...

[2] https://www.forbes.com/sites/kensilverstein/2016/07/13/are-f...

[3] https://arstechnica.com/information-technology/2018/02/fcc-r...

I can invest some money right now and become a local ISP. Unless I'm ready to sink $500 billion, I cannot be Google.

This is how big of a problem it is. I would recommend any founder to delay startups and let anti trust probes and hopefully splits happen. Otherwise what happened to Snap, will happen to you.

Telecoms are not ignored, compared to Big Tech they are highly regulated.

Well to most people the internet is Big Tech. And the big tech internet is arguably corrosive. The only thing Telecom does is hinder people from getting more internet cheaper, faster.

Conclusion: Big Telecom is a net good.

actually though, if you break up Big Tech who will have the money to pay Telecom for preferential broadband access?

I don't think whataboutism is a valid argument against antitrust regulations for big tech.