Ma Bell Stifled Innovation, AT&T May Do the Same

An anonymous reader writes "AT&T recently announced it plans to acquire T-Mobile to create the largest wireless network in the US. If the deal is allowed to complete, it will create only three major players in the industry with Verizon being a close second and Sprint being a distant third. Sprint, along with consumer rights groups, have already cried foul. They argue that AT&T's proposed acquisition will stifle competition and innovation."

Re:Ma Bell Stifled Innovation?

[jrmcferren]

I can name two really quick. Transistors and UNIX.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Government stifles innovation

[darjen]

The Myth of Natural Monopoly [mises.org] p.56-57
Unnatural Monopoly: Critical Moments In The Development Of The Bell System Monopoly [cato.org]

Re:Ma Bell Stifled Innovation?

[travisb828]

That AT&T died in 2005 when it was bought by SBC. The new AT&T is SBC with the AT&T name, and Bell Labs was spun off in 1996 by the original AT&T to become Lucent. Lucent was then merged with Alcatel to become Alcatel-Lucent. Meanwhile the Bell Labs Holmdel Complex [wikipedia.org] is sitting vacant.

Nit

[iluvcapra]

The company called "AT&T" is not, was not, and has only a tenuous relationship with the entity "Ma Bell," American Telephone a Telegraph. The company called AT&T is actually the old SBC, Southwestern Bell Communications, one of the RBOCs, that took over AT&Ts name and trademarks after buying the AT&T Corporation in 2005.

Re:Government stifles innovation

[iluvcapra]

The assertion that the Bell System was an "unnatural" monopoly is a bit of a straw man, nobody claims that AT&T came to run the whole system on its own. What's remarkable is that between Teddy and Franklin Roosevelt most of the progressive/populist pressure on the government was to nationalize the telephone system, as has been done in just about every other jurisdiction of the Earth. FDR rejected this, ironically considering his reputation today, and instead chose the cartel solution, such that there was still a nominal "private" company running the phone system for a profit, while it was protected from competition enough to do all the things the nationalized carriers were doing, like undertaking huge capital expenditures on undersea cables and trunks, and expanding telephony to rural areas where wired telephone service has never been profitable.

Where all of these critiques fall flat is in the rigid line drawing around acts of corporations and the acts of state. A sufficiently influential company possesses statelike powers in any real-world society, and will always try to meld government policy to its design; any government powerful enough to defend property rights will perforce have the power to decide what is and what is not ownable, and this power will always be drawing arbitrary lines protecting business plan X from business plan Y. This is unavoidable and arguing as if this is "unnatural" is a bit of a con.