I wanted to share some thoughts on the role of bigness and monopolies in our lives today. I want to preface this by noting that what you’ll read here are things that many of you have almost certainly experienced yourselves. They are most definitely what we call ‘first world problems.’ My point in sharing them is not to say ‘woe is me’ but to describe some basic and recurring experiences which illustrate a larger point.
Let’s talk about buying cable and Internet service, shall we?
TPM leases two offices – one in New York and one in DC. We’ve been in the New York office for just over eight years. For maybe seven of those years we got our Internet connectivity from Time Warner Cable’s business class service. (For clarity, nothing to do with the TPM website is tied to this office. It’s not housed on a server here. What we’re talking about is purely how the staff in this office accesses the Internet.)
The service was quite simply a disaster – a slow motion seven year disaster. It frequently went out. Or it got ridiculously slow for no reason. We’d call and be told it was out neighborhood-wide when we later learned it was a problem with our connection. Or a problem supposedly with our modem was actually the whole block. Or we’d be told it was a routing station down the street that was being worked on only to find out from higher ups that they didn’t even know our connection was down. Suffice it to say we routinely had problems with our connection and when we’d call to get help we’d routinely be told a different things by each person we talked to. It was less than fun.
To be clear, this wasn’t the connection you have in your home. This was a business class and rather pricey connection. It’s also not in the boondocks. This is in the center of one of the most wired parts of Manhattan, surrounded by numerous tech companies and digital journalism outfits you’ve heard of. It’s probably fair to say that we are in one of a handful of the most tech-centric and wired neighborhoods on the East Coast, probably in the country.
The problem for us as a business was that our Internet needs for this office are really not very complex or great. So it simply made no sense to upgrade to the kind of connection that say a brokerage making live trades or a medical facility might have. It meant an order of magnitude more money and would add things we simply had zero need for. Could we just pay two or three times the money and get better service? We would have happily done that. No. This is the service.
Even so, about a year and a half ago we decided the situation was intolerable and we decided to spend a lot more money and get the next level of service. Since we had zero confidence in Time Warner Cable we decided to get the service from Verizon, the only other telecom who offered service in our building. I have Verizon FiOS at home. And it’s pretty good. But Verizon stopped installing FiOS in new places when the regulatory heat was lifted. So it wasn’t in our building. (New York City is currently suing Verizon over breaking its promises about wiring the city with FiOS.) But obviously, a huge part of our work experience and efficiency is tied to having reliable and reasonably speedy Internet. So we decided to make a change. It would cost us a lot more money – maybe seven times what we’d been paying. But it seemed worth it.
It was a joke.
The process entailed the following: 30 days to schedule installation, an additional 60 days to do the installation, and finally an additional 30 days for “testing.” That sounded nuts. But we were desperate for the cold sweet water of reliable connectivity. In the event, the process took roughly six months – August 2015 to March 2016: August to December to get it installed; December to March to try to make it work.
If I recall correctly, we were originally told that three separate visits to the location would be required to manage the process of installation – mainly looking at our office to see how to do it. Stage two of the process was literally this: install a four foot by four foot piece of wood on a wall. Once a contractor installed the piece of wood, a another person from Verizon would come at to look at the board. We’re having an installation conversation across continents dealing with multiple visits to inspect the installation of a technology that is at least 10,000 years old. For reasons which I don’t completely remember, our building wanted us to have a board slightly smaller. That wasn’t okay. We end up doing it anyway. In the event, they didn’t seem to notice that it was a 3.5 x 3.5 foot board. There was maybe six weeks tied up with the board issue.
The process was managed by a person at a call center in Manilla, who tried to be helpful but was hampered both by language difficulties and time zones. The person who sold us the service left Verizon after a few months. Through all of this, I would say it’s a fair estimate that half the scheduled appointments no one showed up for. (...)
Six months after the decision to make the switch, we had Verizon Internet service. It didn’t work. It was slow, went out as often as Time Warner had. They actually had a billing error in which they started charging us for service before it was installed. That went on for months trying to get our money back.
It was, in short, a comical disaster that cost us thousands of dollars and six months.
Now here’s the funny part of the story. During the Verizon Long March, the super in our building mentioned to me that another company would soon be wiring our building. Supposedly it was cheap and fast. Whatever … Too late for us and I’ll believe it when I see it. We had already paid upwards of $10,000 on a mix of contractor fees and deposits to Verizon. So it seemed like we’d sunk way too much money to switch again. But after we had the ridiculous Verizon service that was terrible, we figured “Let’s try. How bad could it be?”
As it turned out, it was pretty good! It cost probably 20% of what the Verizon service cost. It was fast. It was always on. On the rare occasions when there was an outage it never lasted more than a few minutes. We hear from the company immediately by email when an outage happens. And we actually get small refunds for those outages.
It’s frankly amazing.
But it’s not really amazing. We pay a reasonable fee for a service. It’s reliable. We pay the bill. We have Internet. It’s still what we use. We even installed their modem on the Verizon mandated board.
The point, I trust, is clear. No company like Time Warner Cable (now rebranded as ‘Spectrum’) or Verizon could possibly stay in business if they weren’t monopolies or duopolies in which customers are essentially captive. It’s not the people. Everyone I’ve described in this post, comical as they may sound in context, was a great person working in a ridiculous system. It’s the system.
Let’s talk about banks. (...)
There are lots of little complications in running a small business. These were the most first world of first world problems. I live a blessed life. My point in telling these stories is that they’re somewhat comical – except when they’re happening. But because they’re comical I think they help to illustrate a basic and not at all comical point. These businesses could not exist, they could not stay in business run as they are, if they did not function as monopolies or in monopoly settings where consumers have little ability to take their business elsewhere. Are these just examples of bad luck or bizarre stories? No, they’re just particularly amusing (now) examples. I could tell you literally a hundred more. They are examples of what I’ve seen change even over the last decade and a half. The industries we work with get more concentrated, the service gets worse and more expensive.
The telecom and banking industries are among the most concentrated and monopolistic in our economy. Our current Internet service provider is that rare exception that proves the rule. They provide really good service at a reasonable price – not because they’re nice or moral but because their business is not based on coerced consumption.
They’re not a monopoly.
If this were just a matter of annoyances with cable service, it would just be another of life’s many minor annoyances. But these anecdotes are examples of something much larger. We are living in a new era of monopolies and one in which anti-trust enforcement is all but doesn’t exist. Monopolies provide bad service at high costs. They stifle innovation. We’re used to this kind of anti-sclerosis, anti-bigness rhetoric coming out of the tech world and Silicon Valley. But two of the biggest monopolists are Google and Facebook. Their monopoly power shows up in different ways. But they’re ways that are no less negative for the economy in general. As we’ll discuss in the coming days, there is also a growing body of hard evidence that the growth of monopolies is one of the drivers of wealth and income inequality.
Let’s talk about buying cable and Internet service, shall we?TPM leases two offices – one in New York and one in DC. We’ve been in the New York office for just over eight years. For maybe seven of those years we got our Internet connectivity from Time Warner Cable’s business class service. (For clarity, nothing to do with the TPM website is tied to this office. It’s not housed on a server here. What we’re talking about is purely how the staff in this office accesses the Internet.)
The service was quite simply a disaster – a slow motion seven year disaster. It frequently went out. Or it got ridiculously slow for no reason. We’d call and be told it was out neighborhood-wide when we later learned it was a problem with our connection. Or a problem supposedly with our modem was actually the whole block. Or we’d be told it was a routing station down the street that was being worked on only to find out from higher ups that they didn’t even know our connection was down. Suffice it to say we routinely had problems with our connection and when we’d call to get help we’d routinely be told a different things by each person we talked to. It was less than fun.
To be clear, this wasn’t the connection you have in your home. This was a business class and rather pricey connection. It’s also not in the boondocks. This is in the center of one of the most wired parts of Manhattan, surrounded by numerous tech companies and digital journalism outfits you’ve heard of. It’s probably fair to say that we are in one of a handful of the most tech-centric and wired neighborhoods on the East Coast, probably in the country.
The problem for us as a business was that our Internet needs for this office are really not very complex or great. So it simply made no sense to upgrade to the kind of connection that say a brokerage making live trades or a medical facility might have. It meant an order of magnitude more money and would add things we simply had zero need for. Could we just pay two or three times the money and get better service? We would have happily done that. No. This is the service.
Even so, about a year and a half ago we decided the situation was intolerable and we decided to spend a lot more money and get the next level of service. Since we had zero confidence in Time Warner Cable we decided to get the service from Verizon, the only other telecom who offered service in our building. I have Verizon FiOS at home. And it’s pretty good. But Verizon stopped installing FiOS in new places when the regulatory heat was lifted. So it wasn’t in our building. (New York City is currently suing Verizon over breaking its promises about wiring the city with FiOS.) But obviously, a huge part of our work experience and efficiency is tied to having reliable and reasonably speedy Internet. So we decided to make a change. It would cost us a lot more money – maybe seven times what we’d been paying. But it seemed worth it.
It was a joke.
The process entailed the following: 30 days to schedule installation, an additional 60 days to do the installation, and finally an additional 30 days for “testing.” That sounded nuts. But we were desperate for the cold sweet water of reliable connectivity. In the event, the process took roughly six months – August 2015 to March 2016: August to December to get it installed; December to March to try to make it work.
If I recall correctly, we were originally told that three separate visits to the location would be required to manage the process of installation – mainly looking at our office to see how to do it. Stage two of the process was literally this: install a four foot by four foot piece of wood on a wall. Once a contractor installed the piece of wood, a another person from Verizon would come at to look at the board. We’re having an installation conversation across continents dealing with multiple visits to inspect the installation of a technology that is at least 10,000 years old. For reasons which I don’t completely remember, our building wanted us to have a board slightly smaller. That wasn’t okay. We end up doing it anyway. In the event, they didn’t seem to notice that it was a 3.5 x 3.5 foot board. There was maybe six weeks tied up with the board issue.
The process was managed by a person at a call center in Manilla, who tried to be helpful but was hampered both by language difficulties and time zones. The person who sold us the service left Verizon after a few months. Through all of this, I would say it’s a fair estimate that half the scheduled appointments no one showed up for. (...)
Six months after the decision to make the switch, we had Verizon Internet service. It didn’t work. It was slow, went out as often as Time Warner had. They actually had a billing error in which they started charging us for service before it was installed. That went on for months trying to get our money back.
It was, in short, a comical disaster that cost us thousands of dollars and six months.
Now here’s the funny part of the story. During the Verizon Long March, the super in our building mentioned to me that another company would soon be wiring our building. Supposedly it was cheap and fast. Whatever … Too late for us and I’ll believe it when I see it. We had already paid upwards of $10,000 on a mix of contractor fees and deposits to Verizon. So it seemed like we’d sunk way too much money to switch again. But after we had the ridiculous Verizon service that was terrible, we figured “Let’s try. How bad could it be?”
As it turned out, it was pretty good! It cost probably 20% of what the Verizon service cost. It was fast. It was always on. On the rare occasions when there was an outage it never lasted more than a few minutes. We hear from the company immediately by email when an outage happens. And we actually get small refunds for those outages.
It’s frankly amazing.
But it’s not really amazing. We pay a reasonable fee for a service. It’s reliable. We pay the bill. We have Internet. It’s still what we use. We even installed their modem on the Verizon mandated board.
The point, I trust, is clear. No company like Time Warner Cable (now rebranded as ‘Spectrum’) or Verizon could possibly stay in business if they weren’t monopolies or duopolies in which customers are essentially captive. It’s not the people. Everyone I’ve described in this post, comical as they may sound in context, was a great person working in a ridiculous system. It’s the system.
Let’s talk about banks. (...)
There are lots of little complications in running a small business. These were the most first world of first world problems. I live a blessed life. My point in telling these stories is that they’re somewhat comical – except when they’re happening. But because they’re comical I think they help to illustrate a basic and not at all comical point. These businesses could not exist, they could not stay in business run as they are, if they did not function as monopolies or in monopoly settings where consumers have little ability to take their business elsewhere. Are these just examples of bad luck or bizarre stories? No, they’re just particularly amusing (now) examples. I could tell you literally a hundred more. They are examples of what I’ve seen change even over the last decade and a half. The industries we work with get more concentrated, the service gets worse and more expensive.
The telecom and banking industries are among the most concentrated and monopolistic in our economy. Our current Internet service provider is that rare exception that proves the rule. They provide really good service at a reasonable price – not because they’re nice or moral but because their business is not based on coerced consumption.
They’re not a monopoly.
If this were just a matter of annoyances with cable service, it would just be another of life’s many minor annoyances. But these anecdotes are examples of something much larger. We are living in a new era of monopolies and one in which anti-trust enforcement is all but doesn’t exist. Monopolies provide bad service at high costs. They stifle innovation. We’re used to this kind of anti-sclerosis, anti-bigness rhetoric coming out of the tech world and Silicon Valley. But two of the biggest monopolists are Google and Facebook. Their monopoly power shows up in different ways. But they’re ways that are no less negative for the economy in general. As we’ll discuss in the coming days, there is also a growing body of hard evidence that the growth of monopolies is one of the drivers of wealth and income inequality.
by Josh Marshall, TPM | Read more:
Image: uncredited
