October 31st, 2007


The big cell phone companies SUCK.

Cellular giants know they've hit on a winner and they don't want the landscape moving underfoot. Any change not under their own control is dangerous. To witness Sprint's $5bn investment in WiMax is to witness a future planned so far in advance no-one should be comfortable with it.

Such futures can't be relied upon if innovation is permitted, so the carriers will do anything to crush it. Verizon went as far as to sue the government to prevent it from auctioning the rights to radio spectra that aren't (yet) under carrier control. Though that effort gutterballed, it's a useful reminder of how these companies think the world should work.

Policies, practices and, of course, prices, are startlingly uniform across the board. By owning the framework of wireless telecommunications, the major carriers can deny market access to potential competitors, and few laws exist to effectively limit collaboration and trust.

A manufacturer of cellular technology told us recently that the carriers effectively control their access to the market: it's as simple as that. If you're in the business of making phones, you develop what the carriers — not what customers — want.

When California enacted its Telecommunications Bill of Rights, the industry fought tooth and nail to be allowed to apply at-whim contract changes, to add services without asking the customer, and to not have to tell customers about price increases. It's not that they're up to no good that's so frustrating, it's the fact they clearly don't care if you know it: they consider themselves absolutely untouchable.


I realize that the large cellular carriers being scum is news to absolutely nobody. This is just such a great compliation of all the ways that they utterly choke, I felt like it was worth sharing.

Even putting aside AT&T and Verizon's slavish complicity to the Bush administration's utterly unconstitutional warrantless wiretapping, the economics of the cellular market are just screwed up.

The cellular carriers are a de facto monopoly and everyone knows it. And it's no surprise what happens when you give someone a monopoly. With no competition in the market, they have no economic incentive to deliver good products to customers, and so they don't. What makes them money is to screw people over, and so that's exactly what they do.

The long and repeated history of problems like this are why I'll never understand why some of my fellow libertarians are so soft on monopolies. Monopolies are market failures, guys. They are never supposed to happen in a true free market. And yet they happen all the time in reality - and not just because of government interference in the market, either. Once a company gains an upper hand, they consciously and ruthlessly try to erect as many barriers to entry as they possibly can to protect their market share. Nothing particularly wrong with that as far as business goes, but when they succeed in spectacular fashion and turn into a monopoly... well, at that point if you truly love competition and free markets, you have to do something.