Text messages cost 20 cents to send, even though they use a fraction of a penny of bandwidth. What gives? Antitrust authorities want to know.
Over at The American Spectator, I explain that it is likely a case of unbundling:
Maybe phone companies are unbundling texting from their other services. That way the only people who pay for text messages are the people who use them. If phone companies don’t have to provide texting service for people who don’t want it, they can keep costs down and charge lower prices.
This is much more fair to customers:
Why not just give all customers unlimited texting and charge a higher monthly bill? That would punish people who don’t text, such as this writer. By eschewing the flat rate and tolerating a few texts per month from family and friends who haven’t been properly trained, non-texters can save $50 or more per year.
Monopolists (and oligopolists) don’t behave that way. Companies competing against each other on price do. Trustbusters are forgetting something else, too. If a monopoly exists at all, it is very temporary.
It turns out that a young company called Beluga makes a free texting application for smartphones. Few things are as temporary as monopoly (or oligopoly) power. Since Beluga bypasses the texting cartel, you can have unlimited texting without the $5 monthly fee. Think of it as Skype for the text messaging set.
Read the whole article here.
Do Corporations Have Human Rights?
Intel’s defense in its EU antitrust case has taken the surprising line that the company’s human rights were violated. Over at Real Clear Markets, CEI colleague Hans Bader and I take a closer look. We conclude that Intel actually has a pretty good argument.
Corporations have human rights because doing so greatly reduces transaction costs: “suppose your company wants to buy some computer chips from Intel. You could have each shareholder sign the sales contract – good luck finding them all – or you could treat Intel as a person with the right to sign a contract, and the obligation to honor it. To deal with one person or millions? That is why corporations have legal standing as individuals.”
In short: no corporate rights, no modern economy. No exaggeration. There is a reason why legal conventions emerge as they do, even if they appear strange at first glance.
Iain Murray was kind enough to point out to me that the idea of corporate human rights has very deep roots. The 18th-century legal scholar William Blackstone, in his revered analysis of the English common law, wrote that corporations have the right “[T]o sue or be sued,, implead or be impleaded, grant or receive, by its corporate name, and do all other acts as persons may.”*
*William Blackstone, Commentaries on the Laws of England, Volume 1: Of the Rights of Persons, (Chicago: University of Chicago Press, 1979 [1765]), p. 463.
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Posted in Antitrust, Economics, Law, Publications
Tagged Antitrust, cei, coase, commentaries on the laws of england, contract, contract law, eu, hans bader, human rights, iain murray, intel, ronald coase, transaction costs, william blackstone