One of the comments left by a reader (Bob Danielson) of the Net Neutrality article presented an interesting point. In a footnote regarding AT&T today I stated, “In the end however, it is still their network and their property to use as they wish.” The reader had the following question:
Tim, I wonder if you would entertain this possibility: there is a difference between property accumulated as the result of decades of astute competition, and property accumulated as the result of decades of congenial regulation and rent-seeking.
This is an important question. While my article was written to discuss the economic side of property rights, I think Mr. Danielson raises a valid point, albeit ethical in nature.
In addition, one should also ask will the government make a more fair property assignment? Will the market correct for past injustices? I think the answers are No and Yes.
Like all State-subsidized monopolies, I also think AT&T’s property is highly questionable. And at the time of the breakup, I’d have been happy to see them disbanded and their possessions homesteaded. However, that’s not an option, and we have to ask what’s the most likely fix going forward.
This is interesting timing, because earlier today Christopher Westley sent along a note regarding telecom deregulation in New Zealand. The announcement alone, that the State-protected monopoly would be opened up to outside competition, knocked the stock price down over 10%; over $1 billion in market capitalization. This in part shows how the market as a whole truly values an entity without the legal monopoly. [Update: see Peter's comment below]
Special thanks to BK Marcus for his insights.