In the golden age of the old PTTs (which was virtually all of the last century), their dominance of all things telecom was explained away as a “natural monopoly”.

 

Free marketers were laughed away on the grounds that building a rival network was wasteful, unnecessary - “un-natural” even.

 

The telcos are fading but new quasi-monopolies are emerging to take their place.

 

In a new book (The Master Switch: The Rise and Fall of Information Empires) law professor Tim Wu argues that information industries have always been dominated by oligopolies.

 

AT&T was the sole telco for 70 years until its court-ordered breakup in 1984 – a “natural monopoly” built out of ownership of the infrastructure.

 

But even without a physical network, Hollywood has been the prime channel to the movie market since the 1920s and the big TV networks still dominate television.

 

Now each internet sector is dominated by one or two firms.

 

“The internet has long been held up as a model for what the free market is supposed to look like — competition in its purest form,” Wu writes in a column in WSJ. 

 

“So why does it look increasingly like a Monopoly board? Most of the major sectors today are controlled by one dominant company or an oligopoly. Google ‘owns’ search; Facebook, social networking; eBay rules auctions; Apple dominates online content delivery; Amazon, retail; and so on.”