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Have you priced Microsoft Office lately? Better yet, price Microsoft Project. Or look at their compilers. Now compare to what they charged when they had competitors in Borland, WordPerfect, Lotus, etc.

I would argue that Microsoft was in competition (with Borland, WordPerfect, Lotus) because they offered similar products. The newer, more expensive, products are as a result of Microsoft's own innovation. What stopped Borland, WordPerfect, Lotus, or anyone else from coming up with their own Microsoft Office? Did Microsoft send someone over there to "rough them up"? Lastly, if Microsoft products were too expensive they wouldn't sell.

(sigh) Why does everyone always bring Ma Bell into these discussions? We won't write a novel here, but I'd like to point out a few things:

A number of competing telephone systems had blossomed in the early part of the century, and in some cases people served by one system could not be connected with people hooked to another in the same area. Moreover, the most serious threat to AT&T was not competition from other companies; it was the threat of being taken over by the federal government to be run as an arm of the Post Office. This was a very real concern, and in view of the fact that other major countries ended up with government-owned telephone systems which often performed badly, we owe Ma Bell a great debt for keeping the U.S. telephone industry in private hands.

What the government did to Ma Bell was to place it under tight control, with bureaucratic management, and then suddenly expose it to competition from other firms who are free to select their markets. They were following pricing (or rate-making) rules that had been worked out over time by public authorities. The company's assignment had been to promote widespread use of an essential necessity, the telephone. It carried out this mission and then, abruptly, FCC and federal court decisions brought a radical change in the rules. Cool huh?

The mistake, which both the public and Bell accepted, was in believing that anybody should be granted a business monopoly enforceable by law. It's true that the early telephone industry appeared chaotic and inefficient when two telephone systems in the same area could not connect with each other. In short order, however, the needs of the customers, merger, or improved technology would have overcome this problem. And "natural" monopolies, to the extent that they exist, become outmoded. The railroads, for example, once had a monopoly on fast overland transport; this was quickly bypassed by the trucking industry in the 1930s.

As I said earlier, most people would argue that my views on government regulation of business are nuts. I beg to differ (naturally).

I would argue that Microsoft was in competition (with Borland, WordPerfect, Lotus) because they offered similar products. The newer, more expensive, products are as a result of Microsoft's own innovation.

I disagree. A lot of the "innovations" that Microsoft adds to Word or Excel are negligible for most users. Many users were upgrading Office simply so they could open files created by newer versions. They weren't upgrading for the features. Of course a lot of home version of Office are pirated and it's largely businesses that now pay for it. They're the only ones usually buying MS Project, too, which is why the price is so steep. And they better license or else.

What stopped Borland, WordPerfect, Lotus, or anyone else from coming up with their own Microsoft Office? Did Microsoft send someone over there to "rough them up"? Lastly, if Microsoft products were too expensive they wouldn't sell.

While I blame Lotus for what happened to Lotus, you are aware that there are still lawsuits being filed over this ,right? Also, when Microsoft's products are too expensive, people pirate them. There is plenty of that going on, much to Microsoft's annoyance. I think that's part of the reason why they started selling lower cost "Small Business" and Word-only licenses.

(sigh) Why does everyone always bring Ma Bell into these discussions?

Because it's the classic recent case of monopoly busting.

The mistake, which both the public and Bell accepted, was in believing that anybody should be granted a business monopoly enforceable by law.

Well, if it's a mistake, then someone should tell the people regulating the cable television industry.

It's true that the early telephone industry appeared chaotic and inefficient when two telephone systems in the same area could not connect with each other. In short order, however, the needs of the customers, merger, or improved technology would have overcome this problem.

You are assuming that the competitors would have switched to a cooperative model rather than trying to drive each other out of business with proprietary technologies. I don't have a lot of faith in that sort of cooperation, and even where open standards exists, Microsoft and other vendors keep trying to change them in their own products so they can control them and shut competitors out of business. I'll also point you back toward what happened to WordPerfect with respect to the Windows API controlled by Microsoft.

And "natural" monopolies, to the extent that they exist, become outmoded. The railroads, for example, once had a monopoly on fast overland transport; this was quickly bypassed by the trucking industry in the 1930s.

I'm not concerned about a natural monopoly that exists because nobody else wants to compete. I'm concerned about monopolies that exist because nobody else can compete. It's only a matter of time before that sort of power gets abused.