An Oligopoly Does Not Free Market Make
Image of an Arrow with Most Competitive and Least Competitive business types. Image Source: https://www.reviewecon.com/oligopoly1
Oligopoly
Oligopoly–noun–a state of limited competition, in which a market is shared by a small number of producers or sellers.
So, this blog post has been sitting around on my hard drive for a while, but I decided finally to write this as I was going through advertisements for Internet services in my area. I have a Fiber-optic connection at my home that delivers “Gig” speeds– it can transfer data at very fast speeds and I currently have it set up for 1 Gigabit transfer speeds, although they offer 10 Gigs, 100 Gigs, and I believe 1000 Gigs (but that is primarily for businesses and requires special equipment) for additional prices. Considering that Comcast Xfinity and AT&T are still in the Megabits (Megs), I have all of the speed that I need for streaming, gaming, etc. As I don’t bring my game system or streaming devices with me, I don’t really need a full fledged Internet when I’m at school (between my GTA office and the library, I have pretty much enough internet access to do schoolwork & other school-related access). So, for me, I only need a basic internet package to check email and the like when I’m at my apartment. But–guess what I can’t buy–yes, you win a prize! In a capitalistic country, I can’t buy the product I need, I can only buy the (over-priced) product that the company wants to sell.
Things that make you go Hmmm . . .
So, the reason that I can’t buy a simple 19.95/19.99 per month dollar internet package, but instead must buy an overpriced 40 dollar plan, is that Internet companies got local governments to classify them as a “Utility.” Once that happens, that means that only one or two companies get to be in the market and those are the only companies through which you can have service. Now, as this is local in nature, not everywhere in America does this, but in Murfreesboro–a college town, mind you–there are only 3 main choices for internet (really 2, as the 3rd is a small company that seems to have “satellite” based internet.) The two main sources for home internet (2, mind you) are, yes, you guessed right again, Comcast Xfinity and AT&T. Both offer, as their lowest cost packages, 40 dollars for internet (home). Hmmmmm. Let’s see, 2 companies, who are competing for business have the same price for their respective products. Hmmmmm.
Okay, I’ve seen this before–when two gas stations are on the same corner, they tend to have the same prices. But, when I’ve seen other gas stations around the city, the prices are highly variable. Prices, when there are multiple competitors, vary all across the city. Internet is NOT a utility, it is a service, just like cell phones or any other consumer item. However, the Internet service providers (you’ll notice how the term ISP has gone away since the 2000s when it was at its height because of the ability to get local governments to give them a virtual monopoly or oligopoly). In this case, the loser is the consumer–in this case, me. I know what I want, but because of the “tricks” used by corporations, they get to bypass the normal “market forces” that economists always claim will keep capitalism rolling along.
Call me a (Free) Radical
I’ve complained about this topic before, but this is essentially why I feel that there is currently an imbalance in power between corporations and consumers. Like the post on AMC that I did last year, corporations now have too much power to side-step rules and market forces because the government no longer feels that monopolies/oligopolies are detrimental to consumers. In essence, “those who forget the past are doomed to repeat it.” The seeds for Tomorrow’s Robber Barons are being planted in these policies where the corporations are allowed to sidestep the “market forces” that would constrain their profits by allowing consumers to choose what is best for them, rather than having the corporations choose for them. At some point, these monopolistic/oligopolistic practices are going to come back and bite us all in the rear, but for now, and for as long as I can, I going to be a radical and say No! I refuse to purchase internet service for 40 dollars when I don’t need it because I have another service that is far superior in price and speed elsewhere. Until either Comcast or AT&T offers a lower priced option in my market that is more in line with what I–as a consumer need–instead of what they–the corporation–wants me to purchase–I do not plan to participate in an oligopoly. Step up corporations, do what’s right by your consumers, not what’s right by your shareholders.
Sidney
