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| reply to footballdude
Re: Members of "Handsoff.org"
said by footballdude  :I would open a spoon making business and sell mine for 75 dollars. I'd kill the other businesses off.
I respectfully disagree - a startup will not have the resources of the companies who have been retaining profits from the $150 spoon. Historically, market incumbents use the money to thwart entry through legal actions, delays, access to politicians through their lobbyists, or engage in temporary price cutting to drain the resources of the startup. We've seen lots of that from the telecom and cable industries as they delay implementation of local services by small companies or communities through lawsuits and legal appeals, lobby for protective legislation, then lobby for selective deregulation.
If they have deep enough pockets they'll weather the storm and lower their prices as well. I'll respond by lowering mine.
Conversely, you will need deeper pockets than the big guys to weather the storm. Again, startups don't have the resources of established companies.
Three things can stop this from happening:
1) government interference
2) skullduggery from existing spoon manufacturers keeping others out of the business
3) price of entry into the spoon business prohibitive
Government can stop problems #2 and #3 but if they go too far they become problem #1. Unless your market is in near anarchy, calling for more government regulation is usually a really bad idea.
The lobbyists who cry for less "government interference" also cry for regulations and subsidies that favor their companies and industries.
The consolidation strategy has become clear in this and other industries. The goal of the telecoms is not to foster a monopoly, but rather an oligopoly. An oligopoly provides the ability to limit competition and maximise profits by implicit cooperation while staying under the radar screen of regulators who look for monopolies. (also see The Wikipedia version.
At this point, the telecom industry is very near oligopoly, and is working to clean out, hog tie or buy up the remaining smaller companies who would threaten the planned oligopolistic structure and pricing model.
Whether it's big government, big business or big labor, domination by any of these diminishes the freedom of entry and competition in markets to favor whichever of these entities is in control.
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