Friday, August 28, 2009

Are there any monopolies left?

I've been thinking about writing this blog for some time because I think most monopolies have met competition. I was spurred to write such a blog on seeing an appeals court action in favor of Comcast over an FCC rule -- "Court rejects cap on cable market share – again".

Oops, I can't give you the URL because Yahoo Finance has some block from using it other than a Yahoo Finance page. So to read rejection article, first go to http://finance.yahoo.com and then copy and paste all of

http://finance.yahoo.com/news/Court-rejects-cap-on-cable-apf-4283410271.html;_ylt=ApfFZ31U4vvHDv99Cs8DBwC7YWsA;_ylu=X3oDMTE1M2NpMDZkBHBvcwM0BHNlYwN0b3BTdG9yaWVzBHNsawNjb3VydHJlamVjdHM-?x=0&sec=topStories&pos=2&asset=&ccode=

into the URL box of your browser.

I'm sorry about past Yahoo Finance references I've given you that may not have worked. Nobody I know complained.

Back to what I wanted to write.

Essentially the FCC had been directed by Congress to set a limit on how much national coverage any cable company can have. The appeals court ruled that the FCC did not consider all possible issues in determining what would compose a monopoly.

These include the competition for TV subscription service from satellite companies and telephone companies.

This same but not exactly the same competition exists in other fields.

An airline might have a monopoly on an air route between two cities, but flying is not the only way to get there. Many people can drive or take a bus, especially when the cities are close. Given the hassle of airport security, they may even arrive more quickly than flying. For some routes, like the Boston-Washington corridor, rail travel may be preferable, if for nothing more than being able to walk around frequently.

About the only routes that air travel has no meaningful competitors is across oceans. Few want to take the many, many days that a ship would take. Even then, most major routes have multiple airlines serving them.

All transportation modes have another major competitor – telecommunications. Why make an expensive, time-consuming trip when you can just make a cheap phone call or send email.

The Bell companies once had a monopoly on telephone service in most parts of the company. A court broke them up to give other telephone companies a better chance. The decision had its up sides and its down sides. But I bet the judge did not forsee the free-for-all in telephony competition that exists now.

You can have a cell phone from several carriers, or you can use your computer and Skype. For the latter, you don't have to use a telephone; see above about cable companies.

Electricity is still mostly a monopoly, but you can take many steps to reduce your reliance on the power company, other than conservation. You can install solar panels or wind turbines to augment or replace grid electricity; the extent you can do so depends on your location and your wallet.

Natural gas has not been a monopoly for a long time. Propane and electricity have been alternative cooking fuels. These plus oil and wood are alternative heating fuels.

Railroads were once monopolies. If you wanted to ship something to another city, you generally had once choice of railroad. Then highways got better and small loads could be shipped anywhere in the nation by truck. And a shipper didn't need access to a rail spur.

As time goes on, we will see more and more alternatives to monopolistic services. TV replaced newspapers for many people, the internet is replacing both newspapers and TV for more and more. What's next to fall?