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Have
you lost any sleep over the recent developments between the US Government
and Microsoft Corporation?
Chances are you slept a little less soundly because of the stock market
gyrations of the past couple of weeks than over the catfight between the
Justice Department and Bill Gates.
I suggest
you pay attention to what happens because it will have a significant impact
on your quality of life. I speak from experience. Less than 20 years ago, I
was a part of the Bell System. We provided the best telephone service in
the world and the most economical. We were the largest private employer in
the country. We were the most community-minded citizen wherever we served
(and we served most cities and hamlets in the US). We were politically
active. Our people voted and the politicians knew it.
And we
were broken up by the Justice Department.
Actually,
they never got the chance because we ended up doing it to ourselves to avoid
a protracted court case. It was called divestiture and it changed forever
the way we get our telephone services. In my mind, the Microsoft case is
just the next iteration of what happened to AT&T. The technology has
changed but not the principle.
The issue
is about how you and I will communicate.
The Bell
System lost out because of technology. Years earlier, the government had
made affordable telephone service a national policy, unlike almost anywhere
else in the world. To put telephone service in reach of the American public
meant subsidizing the cost of local service, which is expensive to provide.
This we did by charging more for long distance than it cost, recovering the
costs for our equipment over a long number of years and by charging business
customers more for their service than we charged residential customers. It
worked and we used to brag that more people had telephones than bathtubs.
But
having to keep equipment in place longer than necessary in order to recover
our costs meant the Bell System was slow to introduce new and cheaper
technologies to the marketplace because we hadn’t yet earned back on what we
had in place. That was the beginning of the end. The biggest
corporation in the country and the most powerful government on earth cannot
hold back technology. While we were providing the best telephone
system in the world, others were ready to provide something even better.
The
result was the breakup of the Bell System in 1984, even though the American
public was confused why the government would take one of the few things that
worked well and break it. I said at the time it happened that my
mother, who was in her late 70’s then, would never see the technological
benefits of divestiture but my grandchildren, who were yet to be, would.
I was right on both counts.
Back to
Microsoft. When you get beyond the legalities and the posturing, the issue
is very similar to 1984 -- market power. Has Microsoft’s success in
bringing us into the age of computers impeded the flow of new technologies
because of their size? And the questions are much the same as I heard
during the divestiture fight. First, who is going to be allowed to come
into your home? Will it be the telephone company? The cable company? An
internet provider? Second, how will they get there? Through a copper
telephone line? A fiber optic cable? Satellite? Third, how will you
receive it? Over your telephone (wired or portable)? Your television set?
Your computer? Something you carry around with in your hand? A combination
of all of the above? Fourth, and most important, what will the information
be? To that, the answer is, whatever you want.
All of
the above is yet to be resolved. That is what this fight is about.
And while it may be of scant interest to you, it is about you. It is
about how you will get information in the future. Granted, there are a lot
of special interest hogs at the trough but in the end, you will be the
winner.
It is
tempting to rail at the government as we did in the early 80’s for meddling
in the free enterprise system but I’ve got to give them a pass on this one.
What you are seeing is the marketplace at work and it is being driven by
technology.
It is a
lesson that Ma Bell and Bill Gates have had to learn the hard way. |