For the Week of March 6, 2006
In business a monopoly on power makes companies lazy and leads to their destruction.
In politics a monopoly on power is so damaging we have a special word for it, tyranny.
I don't know what you call it when a business obtains a monopoly on political power, but I'm guessing it's just as bad.
That's what the Bell companies have right now. BellNorth (aka Qwest) BellWest (aka AT&T), BellEast (aka Verizon) and BellSouth have all eliminated economic competition within their regions, and the political competition that held them in check.
Once there were long distance companies, thousands of ISPs, non-Bell phone companies, and municipal services, each with their own agendas, each competing for political favor in Washington and in state capitols.
Now there are just the Bells. They have absorbed the long distance companies. They have crushed the ISPs. They have merged with the non-Bell outfits, and in many states outlawed municipal competition. They even own the main wireless companies.
They pretend to compete with cable, where cable exists, but their interests have increasingly become identical. On the big Internet issues cable and the Bells are united, and now they are using their monopoly power to try and kill the Internet.
The Internet is designed to be defined at its edge. A program in your computer defines what the data in another computer will be. What's in the middle are bits.
But the Bells are now using their monopoly on political power to redefine the Internet, into services, each with a price, which they define at the center. Their goal is to get a cut of every information transaction we do, and thus maintain power.
Ironically Moore's Law made this possible. Moore's Law of Fiber helped kill the Bells' competitors, who found the money they could make passing bits did not pay the costs of running the fiber. The Bells did the rest, refusing to cooperate with competitors when they were required to, eventually getting government permission for a duopoly on local broadband service.
The present government likes this arrangement. It means there are just a few calls to make in order to gain what it wants, instant access to all the bits, quick translation of threats against its own power, dossiers on every potential enemy foreign or domestic. The two monopolies work hand-in-glove.
The copyright industries also like this arrangement. By knowing what the bits mean, they can be paid premium prices. Your choice of TV bits is limited by the "cable choices" they negotiate with the "service providers" (Bells, cable, satellite). They want money to flow to them for every sound bit that passes, for every note you hear. They want to charge for your sending of e-mail, and require "link licenses" that ensure payment for "news", either directly or in the form of pop-up ads and forced registration.
What's wrong with this? What's wrong with this is it's against evolution, what Joseph Schumputer called "creative destruction." It eliminates social mobility, the Horatio Alger myth. It is, in a word, fascist.
The fascist regime of Hitler didn't live long enough for its internal contradictions to become obvious, but the cracks were already appearing in Mussolini's Italy before the war came. In fact those monopolies of power made war inevitable. Life without conflict is boring, and when no worthwhile conflict is available fascists create worthless ones.
A monopoly on power is like a climax forest waiting for the fire. The only way for a climax system to evolve is through massive destruction. So it is in nature, so it is in business, and so it is in politics.
History shows there is just one force that can stand against such monopolies in America, and you're it. Democracy is the check on power.
A century ago, when power accumulated in great industrial Trusts, Americans demanded regulation, and the break-up of monopolies. They demanded, and finally got, competition, or regulation in areas where capital was short, where duplication seemed wasteful, and where the people decided that a universal service was needed. Everyone needed a phone, everyone needed electricity, everyone needed clean water, everyone needed transportation, and the power of these trusts would be checked, their profits limited by government, the public interest protected.
Unfortunately, Moore's Law moves rapidly. It won't wait 20 years for all this to play out. Already Moore's Law of Radios is making the Bells' wires redundant, and in nations which don't have wires it's bringing economic competition. The Internet, another product of Moore's Law, is making the intellectual capital of software obsolete through the miracle of open source.
Those nations which embrace the Internet as it is, which embrace competition for all its worth, are marching ahead, while those which fear change and embrace political monopoly are falling behind. The U.S. is falling behind.
Eliminating the monopolies, embracing the Internet, and endorsing competition are the only possible way to protect some of the comforts you now enjoy. It will be hard to compete, on a level playing field, with India and China and Brazil and everyone else. But in free economic competition everyone wins. It's only inside a monopoly of power that comfort fades, fails, and eventually implodes.
We can fight the power now, or die in the economic fire later.
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Shameless Self-Promotion
I've got a new job. I'm now editor of Atlanta voic.us, a Web start-up aimed at building a community Web platform with a real business model. I'm also all alone in writing the Open Source Blog for ZDNet. (When this started there were three of us.)
My last non-fiction book, "The Blankenhorn Effect" won the Computer/Internet category in the 2003 Independent Publisher (IPPY) awards. Write me for a PDF copy of my latest novel, "Baptists are for Dunking."
On my Mooreslore blog I've written a new novel, "The Chinese Century." It's a story told in real-time, with real characters, but entirely fictional, dealing with the consequences of the falling dollar. I'm beginning a sequal, "American Diaspora," exploring the themes of the first book but with more fictional characters. It's a true alternate history, but set in the present day.
You are encouraged to forward this newsletter widely. And if you have trouble subscribing let me know. Remember: it's journalism that keeps the Clues coming...
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Best of the Week
It disturbs me when people ignore history, even the history they themselves have seen. Like Brit Hume today saying "let's move on" about the Cheney shooting and having no one respond "but Monica Lewinsky wasn't even shot."
Craigslist and the Lawyers' Committee simply come up with a clear, simple statement about what ads must not say. This could be sent to every user of Craigslist, and should be part of the TOS people agree to before posting anything. At that point, any "illegal" "ad" becomes the responsibility of the poster, and the Lawyers' Committee can be as clear as it wants that it plans to go after people who offend the guidelines.
Earthlink is busy turning all those dreams of free municipal WiFi into broken promises.
Imagine if Moveon got together with some of its right-and-center counterparts on a coordinated campaign against the Bells' hoarding of bandwidth, against the Bells' demands for tribute from big sites, and on behalf of better Internet roads for all? Imagine the impact of that. Instead, we get small actions on small issues.
Google's Image Search service is illegal. U.S. District Judge Harold Matz of Los Angeles delivered this stunner in a suit originally filed by a porn firm, Perfect 10.
News that David Edmondson, the CEO of Radio Shack, had to quit after a week because he phonied-up his resume was sad to read. The more I thought about the story, the sadder I got.
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Voic.Us
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ZDNet Open Source
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Clued-in, Clueless
Clued-in is Om Malik, summarizing the argument on behalf of killing the Bells.
Clueless is Patrick Byrne, CEO of Overstock.com. The way to become a millionaire really is to have a father who is a billionaire.
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