[ NNSquad ] Re: Google's premature monopoly

["George Ou" <george_ou@lanarchitect.net>]

"Verizon FiOS (in the >10 Mb/sec Internet-to-the-home market"

 

While it's true that FiOS has the most capacity of any network (by far),
it's not true to say they have a monopoly in the 10+ Mbps market.  Verizon
FiOS, Comcast Cable (bulk of users got free upgrade to 15 Mbps), AT&T
U-verse, Qwest FTTN, and other cable operators are all capable or 10+ or 15+
Mbps.


George Ou

    [ Though at the present time, upstream speeds available to most
      customers via cable or U-verse are significantly constrained
      compared with FiOS.  This may change broadly for cable subs as 
      DOCSIS 3.0 is more widely deployed.  U-verse's last mile copper
      infrastructure model in most locations makes speed upgrades
      more difficult, but not impossible, up to the practical limits
      of VDSL-style technologies.

          -- Lauren Weinstein
             NNSquad Moderator ]
  

 

From: nnsquad-bounces+george_ou=lanarchitect.net@nnsquad.org
[mailto:nnsquad-bounces+george_ou=lanarchitect.net@nnsquad.org] On Behalf Of
David P. Reed
Sent: Wednesday, March 10, 2010 7:02 AM
To: 'NNSquad'
Subject: [ NNSquad ] Google's premature monopoly

 

Let's face it: monopolies happen.

I was a vice president at Lotus Development Corporation when we had a clear
monopoly (IANAL, so take that as a lay opinion, but it's in the past, so my
colleagues won't kill me) on the "spreadsheet market" (more than 80% share).
Our executives didn't spend more than one day without considering
Robinson-Patman and other antitrust laws that say what monopolies can and
can't do.  Had we ever been taken to court, though, we would have argued, as
do most other companies in that enviable position: well, there really is no
"spreadsheet market", and we really weren't being predatory when we
exploited the need for companies to "standardize" on the 1-2-3 file format.
(in our defense, we published the format, but we also changed it
unpredictably, so our hands weren't squeaky clean.)

Antitrust law doesn't make monopolies illegal.  They do, however, grow out
of the inordinate power of monopolies to give companies controlling them
extraordinary and unfair power.

We see many monopolies today: Facebook, Google, Verizon FiOS (in the >10
Mb/sec Internet-to-the-home market, but not the 500 channels of TV market)),
...

Where do they come from?   Well, Lotus's monopoly came from "standardization
benefits" - there are enormous benefits to users from standards.  They also
come from "network effects" - supra-linear returns of value to scale.
Google has a standards-based monopoly in search, and Facebook has a network
effects monopoly in social connection.   Each benefits the users hugely.
They didn't kill to steal a monopoly: their users gain hugely.

So the issue comes down to behavior.

Monopolists become scary when they *act* badly.   But we love the benefits
they create.  Do you really want Verizon to tell you what "search" service
you can use with FiOS?  Probably not.  Probably you like Google just fine
for search.  What if Google stopped making cool things like the open Android
phone, rather than letting Apple's closed phone define the entire mobile
applications market? 

I find it incredibly amusing that Steve Ballmer has started beating the drum
for antitrust investigations of Google, when his position at Microsoft for
the past 25 years is that Microsoft never exploited its monopoly in a bad
way.  In fact, Ballmer is on record as saying that Microsoft never had a
monopoly in the operating systems market - a very interesting form of
reality-denial.

By all means, be on the lookout for Google behaving badly.  But let's also
realize that this is a battle of monopolists.  The monopoly on your
residential access line (fiber or cable) is threatened by Google's small
attempt to make sure its services are not blocked or filtered at the routers
and switches.  Or like the 19th century robber-barons, being charged "extra"
fees to ensure that they get through.

We are going to have many more standardization-benefit and network-effects
monopolies like Google and Facebook.  Rather than vilify them for making
their users happy, let's make sure they know that there are things they
should not do because they are unfair and anti-innovation.