'The End Of The Level Playing Field' (avc.com)

Venture Capitalist Fred Wilson writes in a blog post: When the Internet came along in the early 90s, we saw something completely different. Here was a level playing field where anyone could launch a business without permission from anyone. We had a great run over the last 25 years but I fear it's coming to an end, brought on by the growing consolidation of market power in the big consumer facing tech companies like Google, Apple, Facebook, Amazon, etc, by the constricted distribution mechanisms on mobile devices, and by new leadership at the FCC that is going to tear down the notion that mobile carriers can't play the same game cable companies played. It is certainly true that consumers, particularly low-income consumers, like getting free or subsidized data plans. There is no doubt about that. But when the subsidies are coming from the big tech companies, who can easily pay them, to buy competitive advantage over that nimble startup that is scaring them, well we know how that movie ends.

Comments

Subsidies

[DontBeAMoran]

But when the subsidies are coming from the big tech companies, who can easily pay them, to buy competitive advantage over that nimble startup that is scaring them, well we know how that movie ends.

No we don't know because that movie isn't on Netflix yet, you insensitive clod!

It's never been level

[Anonymous Coward]

You can make money up to a certain point, but if the big companies notice you and can't buy you out, they will destroy you with legal proceedings. The broken patent laws are enough to put anyone out of business, pretty much everyone is breaking some unknown law.

Re:It's never been level

[interkin3tic]

But it has been closer to level before now. Something doesn't need to have been perfect to get worse.

Local problem?

[Anonymous Coward]

and by new leadership at the FCC that is going to tear down the notion that mobile carriers can't play the same game cable companies played

Isn't that mostly a local problem in the single country where the FCC has authority?

Re:Local problem?

[Zontar The Mindless]

Most of the issues cited are specific to the US. Most of the "innovation" coming from the US these days consists of adding more bells & whistles and/or gaming the system. But there are lots of places that aren't in the US.

Re:Local problem?

[interkin3tic]

The rest of the world seems to have benefitted from some of the upstarts that came from silicon valley and elsewhere in the US that arguably existed only because of the more level playing field. That can likely work in a bad way too now. Giant media conglomerates, facebook, google face no real threats in their home which is the biggest market in the world, I have to believe they'll reach their tentacles everywhere else and entrench themselves there too.

So no, I think allowing an infection in the US could cause a worldwide problem.

this happens in most mature markets

[Idisagree]

its almost like you could describe it as a cycle of sorts, funny that....

see here for more info - www.inc.com/encyclopedia/industry-life-cycle.html

Re:this happens in most mature markets

[Archtech]

As soon as you start thinking in terms of "winners" and "losers", you are passively accepting the picture of the Internet as a commercial marketplace in which corporations compete for profit. There are already far too many aspects of modern life of which this is true.

Regardless of its commercial excrescences (which we are free to ignore if we wish) the Internet continues to be of huge value as a common medium of communication. It's all too easy to overlook the enormous amount of learning and discussion that goes on every day, without anyone paying much notice becuase there is little or no money involved.

Rather like FOSS, in fact, the true extent of whose adoption is very hard to establish because there is little or no money involved. (How big is the "market" for Linux distributions? N times zero equals zero for all values of N).

Re:this happens in most mature markets

[bazorg]

We can always take lessons from the past and compare auto industries with whatever we like (in good /. tradition!).
Nevertheless there are significant differences... and that's just taking the examples from the summary.

Facebook is not an early internet company... they've turned up after others looked mature enough to get some cash from their products/services... but failed.
Amazon is an early internet company (IMHO) but which industry cycle pattern applies if they went on a huge horizontal expansion and then vertical integration that leads them to where they are today?
Google I don't understand and never will...
Microsoft does not get a mention even though they've been an early internet-related company before 3 out of 4 in the list, and now gets a higher sales total now than when their OS was in 90%+ of devices. They've become a smaller fish in a much larger pond.
The company formerly known as Apple Computer made their greatest product line by beating established companies in a mature market.

What cycles do we see there if these companies are all actors in multiple markets precisely to avoid being overtaken by newcomers? The patterns are not *that* obvious and predictable as the grandparent poster suggests. If some new company invents something really great that gets them millions of paying customers, net neutrality rules changing will be a pain but won't stop them completely. More likely the hurry to be acquired will be a bigger factor.

reap what you sow

[mschaffer]

Seriously, a venture capatalist is complaining about the state of things? VCs created this very environment so that they could profit from it. It was only possible by tying up all of the IP and suing everyone into oblivion if they infringed over the smallest detail.
You reap what you sow.

Just scratching the surface here.

[140Mandak262Jamuna]

The article talks only about start-ups vs established players, comparing it to the cable TV operations in 1980s to the current situation in internet companies.

But there is a more insidious, a more disconcerting tilting of the playing field is happening. Before big-data and this level of data consolidation, commerce/trade happened between large mass of anonymous consumers and service/goods providers. The price information was public, and a few diligent consumers who compare prices, the informed consumers were mixed up with general public. Now the companies are able to cherry pick diligent informed consumers and give them special coupons, special deals and then raise the rack rate, the posted prices. So much of the consumer behavior is being captured, analyzed and the power of the general consumer is getting increasingly diluted.

So the established big companies are not only able to keep competition away by giving away most common services people want, they are also able to find the consumers who are likely to look for alternatives and keep them in the fold too.

This kind of power is not similar to cable tv operator vs giants in 1980s. It is more like 19th century London traders who had information about rainfall and estimated harvests from all over the world, and were dealing with uninformed local farmers in various parts of the world. Especially cotton and sugarcane. Say a bumper crop of cotton in South India might be happening while Egypt and south USA were hit by drought. But the Indian farmers might be selling to the agents of London traders at pennies instead of pounds. Today the companies can price products knowing exactly how much they can push you individually not as part of a large collective mass. The implications should frighten people.

it's not that new.

[Anonymous Coward]

When the Internet came along in the early 90s

Don't mistake when you personally became aware of it with the beginning. I was on the net in 1983, and it wasn't new then. I know a person who was on arpanet in 1979, and it actually started circa 1969 or 1970.

But yes, it is becoming more centralized, centrally controlled, and proprietary all the time. That's being driven by the choices of several billion non-technical users who don't grasp how critically important it is to maintain openness and decentralization. I do not believe Facebook would have succeeded with the tech-literate users of the 1980's internet. It took the eternal september crowd to make that happen.

Not for long

[Comboman]

Isn't that mostly a local problem in the single country where the FCC has authority?

Not for long. The US is very adept at exporting its horrible laws to other countries by writing them into trade agreements.

Re:Not for long

[dpilot]

This too may have passed. I expect the rest of the world to be more resistant to the US exporting much of anything, policy-wise, for the near future.

Re:crony capitalism

[mvdwege]

Dear God, you are stupid.

Re:crony capitalism

[JustAnotherOldGuy]

Hopefully, Trump will first direct the FCC to stop enforcing the net neutrality rules, and then Congress will permanently remove FCC authority over the Internet.

Oh yeah, what could possibly go wrong by removing any kind of regulatory oversight? Surely none of the large, multi-billion dollar corporations would ever unfairly use a lack of regulation to their advantage.