The New Oligopoly by Al Sikes

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It is hard for those who have been in the forefront to imagine becoming increasingly irrelevant. But, a statistical glance across a variety of media measurements show that is exactly what is happening. Market share, audience statistics, gross revenues, net profit, time spent with devices of one sort or another all tell a story of disruptive loss. The new media has been rapidly miniaturizing traditional ones.

I arrived in Washington in 1986 — a generation ago. My first job was heading the National Telecommunications and Information Administration (NTIA). At the time, NTIA was preoccupied with the consequences of the 1984 breakup of AT&T.

AT&T had largely monopolized telecommunications, and by 1986 it had, under Consent Decree provisions, divested the local phone companies. Its book value declined by 70%. While the aftermath of the breakup was often disruptive to consumers, it nonetheless led to extraordinary new opportunities for telecommunications entrepreneurs to provide new hardware and services. And provide they did.

Today the most consequential commercial power is in the data business. Data oligopolists enjoy enormous advantages of customer knowledge, scale, and access. This advantage grows daily.

While Washington has been obsessed with “Net Neutrality,” the power of Amazon, Alphabet (Google’s parent company) and Facebook, in particular, the beneficiaries of the so-called neutrality policy, has grown exponentially. The Federal Communications Commission (FCC) should devote some time to understanding what this means, and I would suggest reviewing recent rulings from the European Commission regarding the power of data to not just offer new services, but to displace media and squeeze out competition.

If I were a young entrepreneur, my concern would be the data oligopolists and the leverage they enjoy. If I could parachute into the FCC today, I would initiate a competition policy process aimed at a more open data structure. I would not be interested in halting innovation within Amazon, Alphabet, and Facebook, but would want their gains to come from creativity, not raw data and access power.

The data oligopolists know our names, computer identification numbers, search interest, buying habits and much more. They know more about us than most of our immediate family members. They enjoy an enormous advantage in shaping, marketing and selling their services. And their advantage cannot be easily regulated or broken up by antitrust agencies.

Disruption arrives with many faces. But, and this one fact is indisputable, the creative media community—publishers, producers, recording artists, journalists and the like, are quickly becoming miniaturized by the digital revolution and in time, consumers will find the oligopolists less and less benign.

Al Sikes is the former Chair of the Federal Communications Commission under George H.W. Bush. Al recently published Culture Leads Leaders Follow published by Koehler Books. 

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Letters to Editor

  1. MARY WOOD says:

    Chilling comments & unfortunately true. Back to slowing down & privacy via pen & ink

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