Look friend, if you can’t understand that a guarnteed monopoly on phone service, with rates that covered the printing of phone books, gave an insurmountable advantage to the phone company, then I’m almost at a loss to help you. If you don’t think you are paying for that printing of that phone book that lands on your front door via your rates, then again, I can’t help you.
Why did other companies enter? Because, as I pointed out initially, the phone company had so exceeded any reasonable ad rate that there was some room for margin; however, that margin was always thin compared to the phone company, which made them uncompetitive.
1. The cost of the phone company printing the books and distributing them was paid for by the customer. That is a huge cost. The competition had to take that cost out of profits.
2. The phone company had a system by which new advertising customers had to immediately register with them. The competition had to go and look for clients. Not cheap.
3. A business had a choice of paying the phone company an outrageous amount for advertising, paying less to a competitor that never had any chance of suceeding, or paying both. It turns out that extortion works, when its not a bluff.
I’m not sure what business you’re in, but you wouldn’t be in it for long if the government gave your competitor the type of advantage that the phone company had with the yellow pages.
Of course they had the advantage, I never said they didn’t have an advantage, they have an advantage like google has an advantage or verizon has an advantage or even microsoft has an advantage.
Your point was that the phone company had a monopoly, they didn’t in regards to phone books and they certainly didn’t in terms of advertising. In order to build a business you didn’t have to have an ad in the phone book, in fact many people built a business simply off of word of mouth, or maybe they used billboards or radio or tv.
Your point is it’s extortion which is worse a lie and at best naive. The advertising market in any city was simply run off of supply and demand like anything. If people decided to use a 3rd party publisher balking at their own telephone company 3rd party rates would have been driven higher.
So point by point.
1st the monopolies were closing looked at for their phone rates just like utility companies are. Publishing phone books was a cost like any other that was viewed independently of phone lines themselves.
2nd Just because a line was activated at the company didn’t give them a distinct advantage on advertising because the company didn’t have to pay the rates they were asking for. If a new business felt like they HAD to advertise in order to bring in customers they had many media types are their disposal. Also, all companies including the home phone company had outside reps that would go and visit new businesses, an expense shared by all.
3rd Now you are just casting stones, Yellow book was a successful company all on it’s own, many phone companies did overlap for example Verizon overlapped with Qwest(Centurylink) to compete for the same area. A 3rd party publisher didn’t have to be a small company, in fact some were large phone companies that reached out beyond their phone subscriber base. The home base phone book was always the most popular but not the only one used.