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Comment by xenihn | Hacker News Reader

I consider myself anti-monopolist but lately I've been thinking...wouldn't breaking up American big tech companies put the US in a worse position to compete against Chinese tech companies?

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Being in a more competitive industry generally reduces margins but increases the size of the market. Vertically integrated companies lose to aggressively competitive non-integrated competitors when they exist (and a monopolist is proscribed from buying them all up), because the existence of that competition means they can't be abusive or collect monopoly rents.

Vertically integrated monopolies are sticky because you can't replace any individual part of the stack by itself. You can't compete with iMessage just by creating your own messaging app, because to be on a level playing field you would also have to create your own mobile operating system and design your own phone hardware and microprocessors and convince all the customers to switch despite the existing network effect.

If we made it to a market where anybody could create a new OS and have it run on the existing installed base of hardware, or create a new app in a write once run anywhere language and it could run on every existing device, vertically integrated competitors are at a disadvantage because they have to be best in class in all of their individual markets or else customers find themselves better off to have the ability to mix and match.

I'll give an example of a Canadian vertically integrated monopoly: BCE (Bell Canada Enterprises). BCE grew out of the incumbent phone company (Bell) in most of Ontario and Quebec. Over the years it has used the massive profits from telecom to extends its reach into other sectors of the economy. Over the past 10-15 years, it has made quite a few acquisition of various content producers. Most notably to me was the purchase of CTV and Discovery Channel.

Back in the 1980s, Ottawa had a local independent broadcast named CJOH. They produced their own local news at 6pm and late night. The CJOH news team was well respected and an active participant in the community. CJOH eventually got purchased by CTV and ultimately landed under the control of BCE / Bell Media. Shortly after Bell Media gained control a few years ago, they laid off longtime anchor Carol Anne Meehan. Not a good move in my view, as they brought on an entirely new and young team. Further cuts to the news staff have happened over the last few years as increasing use of technology has allowed further staff cuts -- everyone from camerapeople to editors and technical support staff. Each cut means one less means by which the news organization can learn about things that are happening in our community.

The acquisition of Discovery Channel was even worse in my opinion. From 1995 to 2018 Discovery Channel ran a show called Daily Planet, which was one of the only daily science news shows. This was a wonderful way to find out about all kinds of cool things going on in the world of science and technology. It aired on weekdays at 7pm after the 6 o'clock news. Bell Media cancelled the show on May 23, 2018.

The loss of Daily Planet is, in my opion, worse than that of a local news channel. Daily Planet was part of the reason for the existence of Discovery Channel. There are no real replacements being broadcast that I know of.

The reason I bring all this up is to show how the priorities of a monopoly impact existing services that are a public benefit. In my opinion, the BCE layoffs were not the result of the company losing money. The reasons were to free up cash flow to pay for Bell Canada's massive investments in building out its Fibre To The Home network. Bell has spent billions of dollars thus far building out FTTH across Ontario and Quebec, acquired the incumbent in Manitoba. Purchasing content producers that were once separate entities, then gutting them and using the savings to pay for FTTH construction is a brilliant strategy. Money that was previously an expense gets turned into capex that builds a new asset.

Sadly, our phone and TV bills don't go down in price despite us getting less new content. I had the chance to speak to folks at Discovery Channel at a conference back in the 1990s when I was a teenager, and their enthusiasm about bringing real science content to the public was amazing. I'm sad this has been lost at the alter of corporate greed.

Your alternative is YouTube science channels like scishow

Daily Planet was indeed a great show. I wasn't aware it was cancelled.

But, I'd be surprised if many science-minded people from Gen-X or later, were still watching cable in large numbers. Same for the local 6:00 news for that matter.

I despise Bell as much as the next Canadian, but this shift is likely more due to the increased competition (internet, wireless phones) for mindshare.

>Sadly, our phone and TV bills don't go down in price despite us getting less new content

I was thinking about this recently. Every other area of technology gets cheaper and cheaper (relative to their capabilities) but internet keeps getting more expensive. At least in Canada.

Not if you remove China's swiftcode which the USGOV can do and China is very nervous because it would lead to mass unrest.

How do you compete when nobody is buying Yuan and the demand disappears overnight in the foreign exchange markets?

Not in search or advertising.

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