11/14/2010

Tim Wu on Monopolies and Information Industry

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Info-monopolies tend to be good-to-great in the short term and bad-to-terrible in the long term. For a time, firms deliver great conveniences, powerful efficiencies and dazzling innovations. That’s why a young monopoly is often linked to a medium’s golden age. Today, a single search engine has made virtually everyone’s life simpler and easier, just as a single phone network did 100 years ago. Monopolies also generate enormous profits that can be reinvested into expansion, research and even public projects: AT&T wired America and invented the transistor; Google is scanning the world’s libraries.

via In the Grip of the Internet Monopolists – WSJ.com.

I agree with his analysis. However, it is clear that we could set up legislation, think of limiting the length of time on copyright and patents, that would make it more likely that up and comers could at least get a toehold in the market. Oh, perhaps we could change the way government regulates to actually move in the direction of promoting a free market by stopping subsidies of the existing markets and big players.