AT&T Bids $80 Billion for Time-Warner

NY Slimes ^ | October 22, 2016 | vette6387

[riverdawg]

The so-called “last mile” of telecommunications infrastructure for many residential customers is still the old four-wire cable which AT&T began installing in 1948 in the area of central Virginia where I used to live. How’s that for Ma Bell’s vaunted technological change? In any case, satellite coverage and fiber optics installed by companies like Verizon, which were spun off from the old AT&T, make the old last mile infrastructure irrelevant for an increasing number of residents.

There is an important distinction to be made between the common carrier aspects of infrastructure build out and maintenance, which may very well require a regulated monopoly in certain industries, and allowing competition among companies seeking to provide services using that infrastructure. In the UK, BritRail maintains the tracks, switching equipment, etc, and private carriers run trains along that system. In the US, the federal government provides air traffic control and local governments provide airport infrastructure, while letting private air carriers fly passengers and freight. In the natural gas industry, a regulated monopoly is usually responsible for the pipes (infrastructure), and competing companies supply the gas. I could give many other examples, but presumably you get the idea. The same set-up could be used for the rail and electrical systems in the US. Instead, with regard to passenger rail, for example, we have it exactly back-assward: a quasi-government monopoly corporation (Amtrak) runs its trains over privately owned rail.

The big problem with the old AT&T monopoly was that it had control over both the infrastructure and, in most areas of the country, the service provided over that infrastructure. That was like having Delta Airlines owning the airports, air traffic control, building the airplanes, and flying all the passengers. What do think would happen to the cost of flying under that scenario?

[discostu]

There were no other option until after Ma Bell was broken up. No the last mile infrastructure isn’t anywhere NEAR irrelevant, partly because it mostly hasn’t been upgraded. We’re still living with the same 1948 twisted pairs, which is holding back our internet and everything. AT&T would have upgraded that when the tech was viable, they upgraded everything else once there was something to upgrade to.

But it was working. While there are all kinds of great theories on why AT&T was a potential bad monopoly in practice they weren’t. In practice they have us the best telephone system in the world and we’ve been steadily descending that ladder since the breakup.