title: A confluence of events

by: Scott Bradner

All sorts of things seem to be happening right about now. It's U.S. Independence Day, the judgment that Microsoft is a monopoly has just been upheld, it looks like the Bell-etts have won the game, we have had two successive evenings of Texas-intensity thunder storms, and the country music station plays soft, but there's nothing, really nothing to turn off.

I'm sitting here with www.khyi.com's Sunday night oldie's show waxing nostalgic in the background ("Your just a Coca Cola Cowboy" is playing now) wondering if there is a connection between monopolies old and new, freedom and torrential rain highlighted by more lightening and thunder than I've seen in quite a while.

A few days ago the United States Court of Appeals for the District of Columbia Circuit issued a split decision on Microsoft's appeal of its conviction on acting like a monopoly. It upheld the conviction but because the judge was a bit too forthright in expressing his personal opinion of what he had seen, they sent the case back to have a different judge figure out what penalty should be assessed for the transgressions. So Microsoft has a monopoly in operating systems? Shocking indeed, say I as one of the less than 10% who use Macintoshes. The economic theoreticians are saying that this is some kind of new monopoly - a product of the network effects on the Internet. I don't quite know what that means but I think I'll refrain from starting a software company that aims to sell some little software gadget to use on Windows machines.

But not all monopolies are new or the product of the Internet. The Boston Globe reports today that now that the dust has mostly settled the telcom winners in the new world are the guaranteed-by-regulation winners from the old world. Looking back with clear hindsight this should not be too big a surprise. We were all blinded by the cluelessness of the regional telephone companies. They seemed too dumb to live. We forgot that it does not take all that much clue to win if you own the air. And the air for telecommunications is the connections to the customers.

But the fundamentals of these two types of monopolies are as different as they can be. I don't know anyone who looks to the baby bells for innovation (don’t hold your breath for aggressive deployment of broadband Internet connections) but Microsoft has been anything but static - often being in the forefront of adoption of new Internet technology.

There was a lot of bombast out of Redmond Washington after the decision but it did seem a bit like hot air spawned thunder storms that blow over quickly. We will see what the end game is there. Sadly, I doubt that the outcome there or with the Bells will be all that compatible with individual or national freedom but I could be surprised.

disclaimer: Harvard has plenty of hot air but not so many storms but the above linkage is my own.