The rise and fall of monopolies in America Research Paper

The rise and fall of monopolies in America - Research Paper Example One fact everyone seems to be able to agree upon though is that the slowdown has to do with the market forces. Capitalism, the alleged basis of the economic system of the United States and a large part of the world, invokes the theories of competition and supply and demand among others. However, when a small number of very large corporations control not only supply and demand, but competition too, then capitalism is no longer the type of economic system in practice by those corporations or anyone else for that matter. Instead the economy in that situation is operating under a monopoly, in which one company controls the entire market segment, or under the similar structure of oligopoly, where two or three companies control the portion of the market in which they do business. Think Home Depot and Lowes, Office Depot and Staples, PetCo and Pet Smart, and Perot Systems and NeuStar (aka Lockheed Martin Information Management Systems). Those last two may not be familiar, but they are the perfect example of why oligopolies are just as unfair as monopolies. Perot Systems (yes, Ross Perot) and NeuStar were awarded control over the Number Portability Administration Center (NPAC) in 1996, making the two of them essentially a telephone number oligopoly says Tim McElligott in the June 18, 2007 edition of Telephony. When this two party control of the telephone number industry took place, everyone seemed to be pleased, mainly because it was not a monopoly. No one company had majority control. Most thought the Telecom Act of 1996 would regulate the two companies and make the market fair for both them and consumers. However, that belief did not last long. Perot Systems disappeared from the picture leaving NeuStar the one administrator of NPAC. The inspiration for McEll igott’s article was that in 2007 Telcordia Technologies petitioned the Federal Communications Commission (FCC) to enter the market with NeuStar and end the monopoly currently enjoyed by that company.1 One would think this was a no-brainer: one company controls all of a market segment; the FCC can remedy that; it should be a done deal in no time. Think again. According to Telcordia Technologies’ website, the battle between the FCC and NeuStar—as well as others now—to end the monopoly of phone number distribution reached an important point in May of 2011. The FCC issued an order that implemented â€Å"a multi-vendor competitive procurement process for NPAC.†2 Of course, now a round of appeals will ensue. They may already be in the courts now. It will most likely take another year or two before it is decided. We may all be walking around with microchips in our heads before the FCC decides whether NPAC should be regulated by monopoly, oligopoly, or cap italism. Capitalism requires competition to regulate. Consumers want to be able to feel as if they control the way they spend their money. One way they can do that is to â€Å"vote with their wallets/pocketbooks.† If bargain pricing is their aim, then they want to be able to purchase products at low costs. Some consumers are willing to pay more for better service or higher quality products. Consumers may also want variety so that everybody’s tastes are addressed, even the most eclectic. In a capitalistic economic system, consumers have the power to make or break a corporation. In a monopoly or oligopoly, corporations have the power to