Tag: Monopolies

The Curse of Bigness

 

TIMEMagazine19Oct1925
A portrait of Louis Brandeis on the cover of Time magazine on October 19, 1925.

Before he was an associate justice on the Supreme Court of the United States from 1916 to 1939, Louis Brandeis was a progressive lawyer fighting the big monopolies, or trusts, of Gilded Age America. He termed the corrosive effect on democracy of unrestrained business practices “The Curse of Bigness”, and after he joined the Supreme Court he maintained his interest in restraining business interests from trampling the rights of ordinary citizens.

Now President Biden has appointed Lina Khan to the chair of the Federal Trade Commission, and her appointment signals a return to the principles of Louis Brandeis. Lina Khan is an antitrust lawyer and legal scholar who, as a student at Yale Law School in 2017, wrote an article called Amazon’s Antitrust Paradox. The article drew widespread attention for her ideas about how the conventional wisdom of the past 50 or so years regarding regulation of the marketplace based on consumer prices no longer applied in the age of Amazon, a company willing to engage in predatory pricing and use vertical integration in order to stifle competition and monopolize the marketplace.

A profile of Lina Khan in Time from October 17, 2019.

 

Prior to Ms. Khan’s appointment, another antitrust lawyer and legal scholar, Tim Wu, joined the Biden administration as a Special Assistant to the President for Technology and Competition Policy on the National Economic Council. Mr. Wu is known for helping to write the first network neutrality rules in work for the Federal Communications Commission in 2006. In 2018, he wrote The Curse of Bigness: Antitrust in the New Gilded Age, a book which paid homage to Louis Brandeis and his antitrust work of the Progressive Era.

Climate strike (49534187193)
A Climate Strike protester with an anti Bezos sign in London on February 14, 2020. Photo by Flickr user Socialist Appeal.

With these two people now in key positions in the federal government, perhaps efforts to rein in, or even bust up, big technology companies such as Amazon, Google, Apple, Facebook, and Microsoft, will finally be undertaken seriously and with persistence. In the past, these Big Five technology companies have largely escaped with slaps on the wrist after fitful investigations into their practices.


Supreme Court Justice Ruth Bader Ginsburg answered questions from Brandeis University students at an event in January 2016 commemorating the 100th anniversary of Louis Brandeis being nominated to the Supreme Court by President Woodrow Wilson.

 

As Louis Brandeis understood, and as is apparent from the writings of both Lina Khan and Tim Wu, setting regulatory boundaries for these behemoth businesses not only ensures they act fairly in the marketplace, but protects democracy from their tendency to squash individual liberties when they conflict with their self-interest. And the bigger and less competitive these companies become, the more their self-interest consumes everything in their vicinity, like a beast that can’t stop growing and must swallow anything in its way.
— Techly


An unofficial remix of the 2021 songs “Bezos I” and “Bezos II”, written and performed by Bo Burnham for his album and Netflix special, Bo Burnham:Inside. Warning: foul language.

 

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Anxious Days

 

Editor’s note: This post has been delayed one day on account of dismally slow internet service, most likely caused by the service provider’s defective equipment. Thanks, Ajit Pai, Chairman of the FCC, for continuing to safeguard the interests of monopolistic corporations while disregarding those of ordinary citizens!

Waiting through an outbreak of severe weather can be nerve wracking if you’re one of the millions of Americans living in substandard housing. Related to withstanding severe weather events, substandard housing means no basement or a weak foundation, poorly engineered roofing, shoddy workmanship overall, bad drainage around the structure, easily shattered windows, and any number of other problems large and small generally not present in the well built housing of the upper classes. Should something bad happen to a substandard structure due to severe weather, the people living there often do not have the resources to recover from it.


Severe weather affects everyone, rich and poor, but what is usually overlooked is how the poor disproportionately suffer the adverse effects of it both coming and going. To know that should a tornado, a hurricane, a derecho, a hailstorm, ice storm, or flood deal even a glancing blow to the place you live causes many anxious days, first in watching the weather forecast and then during the day or days of the event. There’s personal safety, of course, and the possibility of unaffordable emergency medical attention, and then the possibility of damage to the structure and the unaffordability of repairs, if it is repairable. The last thing any person living in a structure without a safe, reinforced room or basement wants to hear is the freight train roar of an approaching tornado, and to have children to protect must make even imagining such a scenario unbearable.

Winslow Homer - Hurricane, Bahamas
Hurricane, Bahamas, an 1898 painting by Winslow Homer (1836-1910).

All things are relative, and while comparatively few people in the United States have to exist in notoriously unsafe conditions like those in a Brazilian favela, there are still far too many in this rich country who live a hair’s breadth away from personal and financial disaster, a ruin which can befall them in a few unfortunate moments with the caprice of bad weather. As severe weather outbreaks become more frequent and as the population continues to increase, the possibilities for deaths, injuries, and property damage will also increase, all of which burden poor people more than others (yes, even death, because of the costs to survivors).

In the 1978 BBC television production of dramatist Dennis Potter’s Pennies from Heaven, Bob Hoskins as sheet music salesman Arthur Parker encounters a busker called The Accordion Man, played by Kenneth Colley, who in return for Arthur treating him to a meal treats Arthur to a rendition of the song “Pennies from Heaven” (lip synched to a 1937 recording by Arthur Tracy).

Insurance companies’ business model currently has them paying out after disaster strikes (contesting the payout all the way, and digging in their heels where they can), while offering little incentive for builders and developers to proof structures against disaster. Eventually, as expenses incurred by natural disasters mount to insupportable levels, insurance companies will have to come around to a more preventive strategy of offering lower premiums for stronger structures, something easier for them and builders and developers to cooperate on for wealthier homeowners. Where government can step in to protect poor people is to enforce insurance policy standards for their housing, rather than continuing to allow the corruption and slapdash oversight which currently riddles the market. Meantime, as always you’re on your own out there, particularly if you’re not rich, and you have to look out for yourself to stay safe. Good luck.
— Izzy

 

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Not Everyone Likes Pai

 

Ajit Pai, Chairman of the Federal Communications Commission (FCC), requires confirmation by the Senate as a board member before the end of the year to continue with the agency. If he is not confirmed for another four year term and is removed from office, the current president will most likely replace him with another Republican and advance the nomination of that person or another of the board’s two Republican members to the chairmanship. In the end, getting rid of Chairman Pai may not alter the current course of the FCC toward revoking Net Neutrality rules and allowing the merger of the Sinclair Broadcast Group with Tribune Media, but his removal does offer the opportunity to change course, however slim that may be.

Since his advancement to the chairmanship at the beginning of the year, Mr. Pai has worked to dismantle Net Neutrality under the Orwellian rubric “Restoring Internet Freedom”. The public comment period on the proposed rule change closed at the end of August, and now everyone awaits the decision of the five member board, three Republicans and two Democrats. It’s difficult to say what may be taking so long, considering that Mr. Pai has the votes, and by his actions earlier in the summer it appeared the fix was in anyway. Perhaps he’s having a hard time drafting the new regulations and lowering the bar enough to reflect proper deference to the major players like Comcast.

In the 1972 film Cabaret, Liza Minnelli and Joel Grey sing “Money, Money”.

The other major issue on Chairman Pai’s agenda is the merger of Sinclair with Tribune Media, which he favors. To advance his position for taking away regulations that treat Internet Service Providers as common carriers and therefore subjects them to rules of Net Neutrality, Mr. Pai uses language about protecting the consumer and getting the government out of the way of innovation, yet when it comes to allowing one enormous broadcast company, Sinclair, to become even larger and therefore monopolize some smaller media markets around the country, he suddenly and conveniently forgets his previous arguments. Monopolies have historically neither looked out for consumers in any way other than to take their money, nor have they had any incentive to innovate in any way other than how to take even more money.


The comments from the public in favor of keeping Net Neutrality regulations in place have outstripped the comments against, and to the limited extent the public has been paying attention to the Sinclair/Tribune merger, most are against it. Will the FCC, and in particular Chairman Pai, listen to the public or to corporate interests? It’s not hard to imagine the answer to that question if you subscribe to the wisdom of the comedian Lily Tomlin, who said “No matter how cynical I get, I can’t keep up.” Be that as it may, the public retains the option through Congress to say to Mr. Pai “You’re fired!”
― Techly

Dick York Bewitched 1968
“My, What Big Ears You Have”, a 1967 episode of the sitcom Bewitched, with Dick York as the beleaguered Darrin Stephens, whose mother-in-law has cast a spell on him that causes his ears to grow every time he lies.

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The Games People Play

 

“Some people are born on third base and go through life thinking they hit a triple.”
― Barry Switzer, U.S. football coach.

 

In 1976, the movie Network satirized the television business of the day and projected then current trends into the future, to extremes that at the time seemed preposterous. A reality show about terrorists? A planned assassination filmed live on television? Too much! Satire turned into fantasy! Looking back from over forty years later, we realize maybe it wasn’t too much. Maybe it was prophetic.

George Fenneman and Groucho Marx You Bet Your Life 1951
George Fenneman and Groucho Marx
on “You Bet Your Life” in 1951, a quiz show
where the financial stakes weren’t as
important as entertaining conversation.

Thirteen years before Network appeared in theaters, the psychologist Stanley Milgram conducted an experiment at Yale University that tested how far subjects would go in administering electric shocks to other people they thought were also subjects of the experiment, but who in fact were actors. It turned out that when directed by authority figures (also actors), two thirds of the subjects giving shocks escalated the punishment to 460 volts, which is severe to the point of being dangerously debilitating. In 2010, a game show aired in France which re-enacted the parameters of the Milgram experiment in the name of televised entertainment. The producers later revealed that the show was in fact a fictitious re-enactment, with no one harmed, but most of the participants did not know that while the show was in production, nor did the studio audience. In the French game show, 80% of the subjects delivering shocks escalated them to 460 volts.

A 2012 experiment designed by the psychologist Paul Piff at the University of California-Berkeley had subjects play the board game “Monopoly,” with the rules changed to allow one subject to enjoy advantages throughout the game. The methodology and results of the experiment appear to indicate we do not so much learn the haughtiness of economic privilege as have the capacity already within us, waiting only for the switches of power and money to activate it. Economic inequality in the United States has burgeoned since the 1970s when the fictitious mad TV news anchor, Howard Beale, ranted about the inequities in American society, and the divergence between the haves and have nots has only increased since then.


The point where the 2010 French game show and the 2012 “Monopoly” experiment intersect is in describing what has become acceptable behavior for people seeking fame and fortune. Forty or fifty years ago, before YouTube and Instagram and Twitter and Facebook, fame and fortune were as like as not obtainable only after a long slog of work for most, and certainly it was rare to become an overnight sensation. Now we see that most people have sloughed off the diffidence and decorum they had when appearing in public in the age before instantaneous media saturation. Now it seems many people feel little restraint in satisfying their thirst for fame and fortune, no matter how ignominiously won, and will cast off all restraint when egged on by peers or authority figures. Now conscientiousness and civility have become quaint afterthoughts.
― Vita

 

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I Can’t Hear You

Chattanooga Mayor Andy Berke with FCC Chairman Tom Wheeler in 2014
Chattanooga Mayor Andy Berke with FCC Chairman Tom Wheeler in 2014.

Rural communities and small cities took a blow to their prospects for municipally provided broadband internet service on August 10th when the U.S. Sixth Circuit Court of Appeals in Cincinnati ruled against the Federal Communications Commission’s 2015 order to preempt state laws in North Carolina and Tennessee. Wilson, North Carolina, and Chattanooga, Tennessee, had petitioned the FCC to allow them to build municipal broadband networks and the FCC had acted under a provision of the 1996 Telecommunications Act directing it to remove barriers to broadband investment and competition. The Sixth Circuit Court ruled the FCC did not have the power to supersede state law.

19 states have laws hampering the ability of local governments to provide broadband service, with the corporate-funded American Legislative Exchange Council (ALEC) offering sample legislation to more states. As Michael Copps, a former FCC commissioner and now an advisor to Common Cause, put it “Let’s be clear: industry-backed state laws to block municipal broadband only exist because pliant legislators are listening to their Big Cable and Big Telecom paymasters.”

The FCC defines broadband as an upload speed of at least three megabits per second and a download speed of no less than 25 megabits per second, and maintains a map displaying the different types of service available around the country. Even in larger cities where broadband is more commonly available, however, consumers have few choices of internet service provider because for all practical purposes carriers such as Comcast operate as regional monopolies.

The possibility of building municipal broadband networks has been an option in areas of low population density where private internet service providers often display little interest in building out their network for what they see as small return on their investment. People in poorly served areas sometimes turn to satellite service, though it has drawbacks in the form of high latency speeds and throttling of service for users who have reached certain data caps. In the same areas, wireless service can be spotty, with generally low data caps at high cost.


It appears the debate over net neutrality and whether to treat broadband service as a utility may revive, and it will be up to Congress to either strengthen the FCC’s regulatory powers over the states and the industry or to enact legislation defining internet service providers as common carriers, something companies like AT&T and Verizon fought tooth and nail against during the last round of discussions in 2014.
– Techly

Hand with Light and Switch

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