President’s Corner – Avoid a Monopoly

My wife and I spent Easter Sunday at home waiting for AT&T. We had been without landline phone and Internet service since Wednesday of that week. Our phone and computer outage corresponded with work being done on the street by AT&T technicians that week, so we were pretty sure where the problem originated. When the outage occurred, my wife walked down the street and asked if the technician could check if they accidentally disconnected our line. The technician’s response was gruff and not service-friendly. “That’s not my problem. Call for service.”

We did call for service, and waited, and waited, and waited. Appointments were made and broken. We had lunch while sitting on hold. I jumped on my cell phone, which did work, and researched phone provider alternatives. Finally, on Monday, day five of our adventure, an obviously overworked technician showed up at our house and admitted his colleagues disconnected our line accidentally. At that moment, my wife and I felt somewhat vindicated. We both figured out the problem as customers, not as employees.

My research yielded a big (Easter) goose egg. Essentially, in our area, there are two major phone providers and a couple of small ones, all with reputations for very bad service. For the first time in my life, I felt stuck. There was nothing we could do. Moving from one provider to another would not gain anything other than more frustration and more meals listening to our phone stating, “Your call is very important to us” over elevator music.

I recall from my formal education days an entire unit on monopoly laws with regal sounding names like the Sherman Antitrust Act. Somehow, antitrust law seems to be falling out of favor. There appears to be no viable competition in certain industries with high infrastructure costs like telephones and electricity. The purpose of antitrust laws is to preserve a competitive marketplace to protect consumers from abuses. Clearly, this concept is eroding.

If certain members of Congress and employees of the Federal Reserve Bank had their way, there would be only five banks for consumers to transact business, the so-called “Too Big to Fail” banks. It is much easier to regulate five banks rather than 12,000 credit unions and community banks. A financial world of five banks would create the same type of oligarchy, which is simply a monopoly of several companies, as the telephone industry. If we don’t fight local entities being taken over by mega corporations, consumers will hear more of “Your call is very important to us” and less “Yes, we would be happy to do that for you.”

The only way to fight this is to support small institutions which are in many cases more capable than the major banks. The only disadvantage is a smaller branch network, but with all the remote services, there is almost no reason to visit a branch. Certainly, a Bay Area resident does not need a bank or credit union branch in Salina, Kansas. Consider that the next time you’re on hold for two hours.

David M. Green
President/CEO (925) 335-3802