Consolidated Monopoly Corp, Inc

 

In two decades, we have almost come full cycle. Twenty years ago, there was AT&T and the local bell companies. Almost all those local phone companies of yesteryear were owned by AT&T. There were a few holdouts, like the Roseville phone company, which were truly independent, private operators. But the holdouts were very few and very small, because the AT&T monopoly gradually squeezed them out of existence. Actually, it was thanks to the State Public Utilities Commission (PUC) that small companies existed at all, because the PUC required AT&T to allow access to its long distance network by the local companies.

Twenty years ago we started a huge experiment now known generically as "deregulation." AT&T was broken up into a long distance company and several Baby Bells. This followed the previous deregulation of the airlines. At first, everything was wonderful. Long distance calls and travel got cheaper and cheaper. The force of competition was doing its work, lowering prices and improving quality. The consumer was king.

After the first blush, things started to get more complicated. Lots of phone companies and airlines were started, and prices dropped dramatically. Each company thought it would drive the rest out of business with lower fares. And, they were right: lots of other guys went out of business because they couldn't compete. But they were wrong, too, because a little later they fell into the maw of the Race-to-the-Bottom crushing machine.

The airlines were gutted by occasional fuel price spikes. It became uneconomical to fly locally; only flights from hubs made economic sense. Thus, the national air network that once connected small cities to metropolitan regions disappeared. The price of flying to local airports increased dramatically. Fuel prices and excessive competition eventually drove almost all the airlines into bankruptcy.

Along the way, the once glamorous profession of flying was ruined together with pilots' pension funds and the air controller's union. So now it is less safe to fly than twenty years ago because of Wall Street economic terrorists and Washington ideologues. Except, miraculously, SouthWest Airlines, most of the rest are either bankrupt or on the way.

The phone companies suffered a similar fate. The beginning of the end seemed the reverse: the sudden popularity of the Internet. Huge amounts of capital were invested in the Internet, which also changed how phone calls were transmitted. Thousands of companies got into the Internet and telephone businesses, progressively cutting the rates more and more. As we know, the 2000 market crash took most of them away. Since then, the survivors have been "consolidating;" growing into larger and larger companies.

Meanwhile, millions of good jobs with the phone company were forever lost. That premier research lab, Bell Labs, became the now-you-see-it, now-you-don't Lucent. Most of the research disappeared from Lucent, which inherited the premier telephone manufacturer, Western Electric, due to several downturns and bankruptcies. Today, Lucent is an also-ran.

In the telephone business, we now have SBC and VERIZON. Bankrupt QWEST hangs by a thread, while SOUTHERN BELL twirls on two threads. It's only a matter of time for these last two.

It's politically interesting that the Red State phone companies are the ones most at risk. It's is also interesting that winners such as SBC and SouthWest Airlines are based in Texas.

What we gained is "more efficient networks." It's true: what's left of the airlines and phone companies are more efficient. They are cheaper for those whose lives are entirely encompassed by a few big cities. For the rest of us, it has become more expensive to connect and travel. This has the secondary effect of reducing the level of education and sense of cultural connection in less dense ex-urban and rural areas.

A relatively few made millions, even billions, of dollars buying and selling telephone and airline stocks and bonds. These are the same folks who approve of, and support, the Great White Bandit. They are also, by and large, the same folks who encourage and support the reactionary politics now dominant in the Red States. All these things, economic, political and cultural work together.

So, what was accomplished by the great deregulation movement? I think nothing. For the twenty years, we were probably better off had none of it ever happened. What we lost was a nation connected by air and an integrated telephone network. We also lost millions upon millions of good jobs. The question which has not been asked for a long time is whether there is any reason for deregulation?