Thursday, August 29, 2002

Paul Starr in The American Prospect has an article about the telecom implosion. Of the 7 trillion dollars in lost market capitalization since the peak, 2 trillion of it comes from the telecom industry alone.

One reason Starr gives for it is the lessons unlearned from the past, oh, 150 years of telecom. With every new advance (telegraph, telephone, Internet), there has been an explosion of competition on only one set of routes. In the race for everyone to get big, there ends up being a monopoly while the rest are swallowed up. But with the internet, they said that that wouldn't happen, so they should get a whole bunch of gieaways from the government to facilitate themselves getting big. Well, look what's happening. One by one, most of the companies are going under, feigning surprise as they hit the shower rod.

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