Readers Talk Back on Microsoft and AT&T
P> Who should antitrust regulators watch more closely? Microsoft or AT&T?
We asked this question at our World Wide Web site, WT Online (http://www.wtonline.com/wtonline). The answers took nearly every conceivable position, which is perhaps to be expected given the uncertainties in the infotech industry. Following our own introductory comments on this issue, we publish selected responses.
For years, the computer industry has been driven by Moore's principle, so named after Intel's legendary founder Gordon Moore. That principle holds that the number of circuits available in a given space and at a certain price will roughly double every 18 months. Now Netscape, in less than two years, has produced three generations of products.
Both phenomena speak to the ever quickening pace of technological development. And that pace has strained the ability of regulators to keep pace -- particularly in the area of antitrust enforcement. Just as regulators at the Justice Department, Federal Communications Commission or Federal Trade Commission acquire the modicum of knowledge necessary to understand -- much less regulate -- a new industry, along comes an entirely new technology market.
The regulators seem to have fallen as hopelessly behind as we consumers. Laissez-faire advocates could applaud this situation, while those with a more regulatory bent seem concerned. For instance, the Clinton administration, in its early years, embarked on high-profile efforts to restrain Microsoft -- first for using its operating system dominance to monopolize the applications market, and later for leveraging that same advantage to take over the on-line services business.
Both the Department of Justice and the Federal Trade Commission have failed -- so far -- on both counts. And it is perhaps worth noting that despite these failures, Microsoft has scrapped its proprietary on-line services strategy and fully embraced the Internet, through which it now plans to offer competition as a news service to the nation's major city newspapers. Did competition succeed where regulators couldn't? And what about Microsoft's latest plans?
Microsoft's news venture will leverage the built-in link between the Windows 95 operating system and the Internet. Readers will get the service free and advertisers, presumably, will pay to reach them. Scores of journalists and editors have already gathered in Redmond to run this service.
Should antitrust regulators again be concerned? One could argue that Microsoft will inject competition into an area -- daily journalism -- where competition in the nation's major metropolitan areas has all but disappeared.
Or take the case of AT&T -- which for much of the 1970s was the target of antitrust attention along with IBM. It has split into three companies in a move that brings to a formal close the court-imposed division of AT&T in 1982. Yet the remaining, core AT&T business has just announced a move into Internet services that sent the stock price of Internet service providers plummeting. Is it possible that AT&T's offer of five free hours of Internet access to AT&T customers is a loss leader? Should regulators be concerned about the decline of entrepreneurial business in Internet services -- one of the nation's biggest job-growth generators in the last few years? Here's what readers say:
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Assuming that you believe market forces are better managed by Antitrust Watchdogs, Microsoft is more likely to become a monopolistic player in the economy. With virtual control of the PC operating system and primary application markets, the possibility that others will risk the extraordinary entry costs is very low. It is far more likely that new technology could reshape the market before Microsoft can respond and thus reduce their stronghold.
Timothy M. Schur
Microsoft MS is trying to gain complete control over software developers. They also have an on-line service that will move them into communications. Recent mergers and acquisitions confirm this. Notice -- all software must be Win 95 compatible to run.
AT&T should be watched, not Microsoft. Microsoft sets the standards and runs all of the software worldwide, except for the small percentage of copycats and wanna-bes out there. AT&T may try out a few loopholes, but won't be able to catch the uncatchable. Trying could be fun, though. With the wide open Internet, there's bound to be a niche to get into, instead of competing with the biggest dog.
AT&T. AT&T wants to get back to being the communications leader of the world again. To do so, it will buy up every communications company along with related companies. Current downsizing is a way to generate ready cash!
Charles Johnson Co.
BOTH! The profit potential from the Internet and related activities is so large that any company with the funds and management people to take over this market should be watched.
Gordon L. Bladwin
Wexford Missaukee ISD
Antitrust is a concept that economics research has shown to be intellectually bankrupt. It is nothing more than domestic protectionism that voids the right of a consumer to contract and buy services from the companies of his choice. Enforcement of antitrust laws is an assault on individual rights.
Neither. Antitrust laws passed in the era of the nation-state no longer apply to any U.S. company. Both AT&T and Microsoft operate in that ethereal territory called "the global market." Any lawyer who would try to fill his begging bowl by trying to halt their progress would soon find himself or herself parking cars in the suburbs.
Tom O' Hanlon
Microsoft. It is positioning itself to corner the market in developing markets -- like the leading supplier of photographs on-line. It has done a lot for the market, but it should not exclude the little guy.
Microsoft by far. AT&T basically has telecommunications at heart. Connectivity and dispersal of information via varied and non-corporate controlled systems. Microsoft, on the other hand, wants to control both information access as well as the systems to manipulate that information. It is a dangerous thing for a single entity to dictate in what direction we may look, as well as give us the compass to go hunting with.
Jestor Software Services
I both love and hate what Microsoft has done to the PC world. It seems to have advanced it and inhibited it at the same time. Microsoft needs to be watched, restricted and controlled. If done properly, it could be a win-win for everyone. Left unchecked, Microsoft has the potential to kill free enterprise and control the marketplace.
Melvin L. Brandstetter