Integration: Legitimizing monopolies

The American Telephone and Telegraph Corporation was founded in 1885 from an offshoot of the American Bell Telephone Company, itself the result of a number of mergers originating back to Alexander Graham Bell, the inventor of the first telephone. From its outset, AT&T’s goal, using Bell’s master telephone patent #1774465, was to create a "One Policy, One System, Universal Service." Throughout the early 1900s, the business absorbed as many competitors as possible during an age of great trusts and monopolies, irking the ire and attention of anti-trust regulators.

Throughout most of the 20th century, AT&T dominated and obliterated its competitors, protected under what was considered “natural monopoly” status before finally being broken up as a result of a Justice Department anti-trust lawsuit initiated in 1974 and settled in 1982. From the corpse of AT&T rose the “Baby Bells”: Bell Atlantic, BellSouth, Southwestern Bell, U S WEST, Pacific Telesis, NYNEX, and Ameritech.

Almost 30 years later, Ameritech, BellSouth, Pacific Telesis, and Southwestern Bell have been reabsorbed into AT&T. In the meantime, Bell Atlantic consumed NYNEX and formed into what is now Verizon. Both entities have risen from their dead fragments to re-monopolize the modern telecommunications industry after cutting them apart to solve this very problem. They stifle and strangle consumer choice in nearly every area they operate, with most people having only one option when selecting a cable provider as a result of their predatory business practices.

And now they, along with Comcast, have teamed up with Microsoft, itself the target of a number of infamous anti-trust investigations in the U.S. and Europe, to allow them to spread their tentacles even further onto every home with an Xbox console inside of it, feeding off of each other to concentrate their control.



Yes. This is going to be one of those blogs.

Some people were enthused when Microsoft announced they’d be bringing cable services to Xbox Live. Some found the news rather pointless, the addition somewhat useless. I find it dangerous and counterproductive to a problem which affects every person reading this more than they think. These companies don’t just bring you your television – they most likely bring you the internet you’re reading this on, and they sometimes use it to fuck you, the paying customer, over.

This integration of services inevitably picks winners and losers when console manufacturers take sides in such a manner: when Netflix is integrated onto the PS3, its competitors lose out. When Microsoft broadcasts exclusively matches from the UFC (itself a monopoly) and leaves out all other options, that kills off other choices. One company’s gain is another’s loss.

This brings forth a dilemma: does this integration help create monopolies, and help them to win? Or have these companies already won? Is it helping monopolies which already exist, meaning the integration is inconsequential?



It’s akin to figuring out whether or not a burning house is capable of being extinguished. There’s a certain point where nothing can be done, that there is no salvaging it. In either case, I don’t think throwing in canisters of petroleum is beneficial. Comcast is already a monopoly in a lot of areas it operates. Whether or not their service is on Xbox Live is inconsequential to that fact. But let’s not kid ourselves: it certainly doesn’t help that fact, or that problem. At the same time: does it even matter after a certain point?

What this integration does is legitimize monopolies – it crowns winners. When Microsoft announced the integration of Facebook and Twitter onto Xbox Live, the news originally puzzled me: what if those two businesses ever go out of business? What if people stop using them? What if Google+ does get its act together, and everybody stops using Facebook in 5 years? What if they end up on the road Netflix is on, beleaguered with torrents of customer complaints and canceled subscriptions? It seemed like a bold move to openly embrace a business as being permanent and indispensible like that, since even monopolies do sometimes vanish.

But then again, sometimes, as we have seen with the American Telephone and Telegraph Corporation, they don’t. To me, the current shouldn’t be towards expanding Comcast’s reach: it should be to pushing it back. Comcast uses its monopoly power to throttle the internet connections of its customers and to restrict the amount of bandwidth they are able to consume. In fact, Comcast, along with AT&T and Verizon, have been waging a war against FCC regulations governing the internet since its inception to allow them to decide what traffic and information gets sent to you, if at all, and whether or not they can charge premium access to it. And they do this with all the money they collect from consumers who have no choice as to who provides them cable, and from deals like this which allow them to strengthen that power.



Does this integration provide conveniences to the consumer? Yes. But long term, it enables market domination and stifles competition and choice. These companies have a right to exist. They have a right to make money. They do not have a right to control the market and do whatever they may please. What this boils down to is whether or not those short term conveniences are worth the potential long term problems these conveniences fuel and support.

I am not sure on the matter myself. Despite all of this and everything I just wrote, these are nice conveniences. I do enjoy watching Netflix in bed, on my television, without having to turn on a computer. I like turning on ESPN on my Xbox, and being able to watch soccer matches I would probably never see without it. There are benefits. But my intention is to offer another perspective, to nuance this issue and bring to light some important questions no one is asking. Is this trend, in the long term, a positive thing? That our consoles are being used as trojan horses in plots to stamp out competition?

Yes, it is neat when we can all watch Hulu on our PS3s without a computer. But not when it’s because it is our only choice, because all of Hulu’s competitors went out of business. Watching Comcast on your Xbox suddenly doesn’t seem that great of an idea if AT&T and Verizon fall back into their graves, leaving Comcast the only cable provider available to begin with. None of this will happen as a result of this integration, of course. But there are more angles to this issue, some of which are not entirely obvious.