The Telegraph And Natural Monopolies In Communications

from the how-do-you-deal-with-them? dept

A bunch of folks have sent in Matthew Lasar's excellent look back at some of the early days of the telegraph system and how it parallels some questions that we face today over things like net neutrality. The basic story is that Western Union worked out a way to gain a monopoly on the telegraph, and then worked out a deal with the Associated Press, whereby all AP papers would use Western Union, and none would support the creation of a competing telegraph company. From all of this, there is even the suggestion that a presidential election was stolen. It's a worthwhile read.

Of course, the parallels are not perfect, and there are lots of other questions to be raised, but there are some good points to think about, when you're dealing with a communications system that is, effectively, a natural monopoly. As the FCC suddenly seems open to the concept of line sharing again, after being down on it for so many years, it's at least worth looking at the history on things like the telegraph, to understand why competition really is a good thing, especially when it comes to the major means of communication.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: history, natural monopolies, telegraph
Companies: western union


Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. identicon
    Anonymous Coward, 8 Dec 2009 @ 3:17am

    Monopolies are always bad.

    They distort the market and always end up benefiting one side more then the other.

    Still some claim that it helps.

    There are natural monopolies that form and take over the market that have some checks but they don't drive innovation as they kill all competition(Standard Oil and the Telegraph).

    There are coercive monopolies or De Jure monopolies that are coercive monopolies that take all options from others inside society.

    reply to this | link to this | view in thread ]

  2. identicon
    Trails, 8 Dec 2009 @ 8:17am

    I am entitled!

    I pointed this out in comments a few days ago!

    I demand proper attribution, $20,000,000 punitive damages, $30,000,000 statutory damages, Mike's internet connection be pulled for a decade, and that he be extradited to Canada, that he may be publicly flogged with a maple branch (we call it Canada Style up here).

    reply to this | link to this | view in thread ]

  3. icon
    Danny (profile), 8 Dec 2009 @ 2:58pm

    Victorian Internet

    The article indirectly references _The Victorian Internet_ (1998) by Tom Standage. For those interested in this topic, that book is a must read. It is short, and full of interesting stories.

    I use material from it in my Social Issues of IT class.

    reply to this | link to this | view in thread ]

  4. icon
    Michael Price (profile), 8 Dec 2009 @ 5:11pm

    Aint no natural monopoly.

    If Western Union managed to get a monopoly with government help it's a breakthrough in economic theory since no other natural monopoly appears to have existed. All monopolies were the result of government interference and the claim that e.g. electricity is a "natural monopoly" contrasts sharply with the facts. Thomas DiLorenzo's "The myth of natural monopoly" sets out those facts including "natural monopoly" business that competed for 80 years.

    reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Advertisment

Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Loading...
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.