This morning, I was about to leave my apartment building to head to work when I noticed an 8 1/2 by 11 piece of paper taped to the exit door for everyone to read. It was a message from the apartment complex managers, indicating that anyone who was currently using the video services of U-Verse by AT&T must discontinue using it immediately because they are in violation of the apartment’s “contract” with some cable service called Suite Solutions. Not being a user of U-verse, I didn’t give it much concern, but then it had me thinking. What if I was a user of U-Verse and decided to get my television programming that way? What if I decided I didn’t like Suite Solutions (which I don’t) and chose to get my television programming through my phone line? What right does some housing complex or some cable operator have to choose how you get your television programming?
For the longest time, I’ve been receiving flyers in the mail from AT&T, promoting U-Verse as the answer to bad cable companies, and I just ignored the stuff because, to be honest, I don’t think television is all that worth subscribing to in the first place. While some people remained glued to their television screens every night they get home, I don’t think I’ve turned mine on to television programming in over 8 or 9 months, so to be honest, I’m not even sure I even have a television signal these days. And honestly, I don’t really care.
But what started to bother me was this anti-business message that was being pushed on potential customers by the people who manage the place where I live. It’s one thing if Suite Solutions was a good company, but let me tell you about my experience with that company. When I first moved into my apartment over two years ago, I chose that company to get my television and Internet service. At one point, I remember counting on a calendar to see whether or not it my service was down more often than it was actually up. I paid for the highest speed service, and when it worked, my download speeds were atrociously slow. I remember beating a download with my cell phone once (which ironically never actually succeeded with Suite Solutions because the Internet crashed during the download and didn’t come back up for another three days).
This was the company that my housing complex thinks that I should be emboldened to because they signed a contract with them somewhere in the past. Now, I don’t mind this being an option, but if they eliminate all of my other options, so that Suite Solutions is my ONLY choice, I think we have a horrible problem that really needs to be solved by the SEC, the FCC or maybe Elmo and the other characters of Sesame Street (they are notorious for advocating for consumer rights in the fantasies I have about Elmo and the gang).
Of course, no story about monopolies should be complete without a little bit of irony. I mean, we are talking about some unknown cable company using its monopoly to cut out the little guy, specifically a little guy named AT&T, who happens to be going through a little bit of monopoly trouble of its own these days. Now that the government has stepped in and told AT&T that it is creating an unfair monopoly by trying to buy T-Mobile, does anyone see the ridiculousness of some small cable provider shutting out AT&T through its contracted monopolies? I’m sure there are some people who are thinking this is a good thing because they just hate AT&T, but when AT&T becomes your alternative source to a crappy choice, something’s seriously wrong with this picture. I mean, I’m not exactly the poster child, greatest fan of all things AT&T. Just last week, AT&T refused to transfer my Internet service (not U-Verse) to my new apartment because of some flag that showed up with an old bill for $189 that HAD BEEN paid over two years ago; unfortunately, because it was so long ago, they couldn’t find a record of the situation, nor could they offer any way of alleviating the problem because the situation occurred too far back in the past to be solved by any simple transaction (like me just giving them $189 to make the problem go away). That’s the kind of problem you get from a monopolistic company that is so big that it can’t handle its own financial problems that emerge from its own lack of correct record keeping (you can always spot this problem when some customer service person tells you: “There’s nothing I can do about it. The problem seems to be coming from another area of the company that doesn’t exist anymore.”).
So, I ask, are monopolies good or bad for consumers? So far, my experience with them has been nothing but negative. You constantly hear economic pundits talking about how monopolies are good and how they drive innovation (or some other big proclaimed statement that has no basis in reality), but how do they really help us? Okay, there is one area, and that’s price, in that a company with a monopoly has the ability to lower the prices by handling all of the means of production and distribution, but how many times has that monopoly also gone the other direction, to where the only source of a product decides to raise its price because it realizes that no one else can fulfill the need? We’re kind of seeing that right now with Netflix, that erroneously thought that it was a solitary producer of content services so that it could pretty much do whatever it wanted to do by raising prices and splitting its company into two so it could eventually raise prices at its own leisure (possibly by raising it twice as much, as both companies can now raise prices as the same time, and thus, increase profits twice as fast). But what really happened was that Netflix realized too late that its customers WERE its product, not just the users of their product, and without customers, they have no income. I expect to see Netflix become the next Myspace in an era of Facebook.
For me, I have no real solution other than to boycott all of the products of companies that are hostile towards customers, which is why I gave up on Suite Solutions shortly after feeling like I was being cheated month after month. Fortunately, I am not a consumer of U-Verse, so I don’t have to worry about this proclamation from the emperor, but at the same time it also keeps me from ever wanting to do business with Suite Solutions again because instead of trying to compete with AT&T by providing a great customer experience and a good product, they decided to go the punitive route instead.
That companies never realize this strategy is a blueprint for failure is a footprint that forever haunts me. There’s a reason that message was tacked on our door like Luther’s 95 Theses. The company is failing to attract and keep customers, so it needed to crack down on anyone who decided to use alternative choices. Unfortunately, that strategy rarely brings in new customers or business. Instead, it leads you closer and closer to becoming obsolete. That this is 2011 and a company still doesn’t understand that is ridiculous. But why innovate when you can demand business? Need I say more?