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Comment by lulzron | Hacker News Reader

AT&T argued that breaking up its monopoly would harm consumers by reducing service quality, increasing costs, and stifling innovation due to the loss of economies of scale. However, the breakup in 1984 led to increased competition, which drove innovation, improved services, and lowered prices, proving AT&T's claims largely false. The market's diversity and consumer choice expanded significantly post-breakup, contradicting the monopoly's dire predictions.

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I agree with this view; the breakup of the AT&T monopoly was a boon for consumers. However, I also agree that Bell Labs was a casualty of the breakup. Once AT&T was split, Bell Labs was pressured to demonstrate its value by focusing its research on areas with more immediate ROI. Unfortunately, when a research lab focuses more on the short-term instead of fostering long-term, riskier explorations, the magic of the lab fades away, and often the work becomes evolutionary rather than revolutionary, since it’s hard to do revolutionary research when management, executives, and shareholders demand quarterly progress and a promise for ROI in the near future. Bell Labs wasn’t the same since 1984, and the same situation occurred with Xerox PARC after the 1980s when Xerox no longer enjoyed monopoly-level profits on its photocopiers due to increased competition.

I believe that fostering long-term, unfettered research is an important element for revolutionary work, though I don’t believe it’s the only way for revolutionary work to happen. However, it’s difficult for most companies to consistently fund this work for an extended period of time. Bell Labs and Xerox PARC in their heydays were special, and I struggle to think of any modern-day equivalents in industry.

Back in the 1980s, long distance couples sometimes wound up paying more in long distance phone calls than rent, and 30 miles away counted as long distance. No one could attach anything to the precious network, so acoustic coupler modems had to be used, resulting in very low bandwidth. Yes, a lot of good stuff came out of Bell Labs, funded by the huge amount of monopoly money that came into the company, but that needed to end.

I was in that situation. I was thrilled when Sprint long distance became available at $0.10/minute and I also remember when you could stop renting your home phone from AT&T and plug in one that you bought and owned.

Heh - My first online experience was 1995 (obviously, pre-98 telecom deregulation). Not only did the price include the insane per-hour pricing of Compuserve, but the long distance fees pushed my bill up to 300 dollars the first month. I worked at Taco Bell at the time and made like 4 bucks an hour. Thankfully I lived at home rent free at that point.

This analysis might be selective and hindsight biased. Are there any cases where government intervention to slow or stop monopolies actually impeded innovation?

Government antitrust actions aim to promote competition but can sometimes slow innovation by disrupting large companies' ability to invest in R&D. Cases like IBM, AT&T, Microsoft, and Qualcomm illustrate how such interventions, while fostering competition, may also delay technological advancements or make companies more risk-averse.

While antitrust actions might temporarily disrupt a company's innovation, they ultimately foster a healthier market by encouraging competition, which drives more diverse and widespread innovation across the industry. Breaking monopolies often unleashes creativity and technological advancement by empowering smaller players and preventing market stagnation.

Total market share, you can’t generate more time to steal from people which is effectively what these companies like Google have done to generate revenue.

If the government steps in they would have to break them all up and expect to make entering those sections possible. At the moment it’s nearly impossible.

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