Natural Wireless Monopolies - the downside of the iPhone's cool factor

I've avoided all talk of the new iPhone, mainly because the contract on my current phone doesn't expire for another year and I will avoid all conversations about new phones until it does. But Columbia Law Professor Tim Wu makes a rather good point on Slate about what the new iPhone means for the current wireless market: once thought to be a model of competitive balance, the wireless industry has become a natural monopoly due to costly spectrum auctions imposed by the FCC.

Two things about this interest me. First, that anyone who's been to a country like Japan, Germany, or South Korea recently knows that America is seriously lagging behind in telecommunications infrastructure. I first realized this when I was living in Berlin in the summer of 2006 and called my dad from the U-Bahn—not from the platform, but from a moving underground train (and this was an international call). Monopolies are never any good for society as a whole, and it seems that FCC's regulations in this case are already making a problematic domestic market worse. It's no coincidence that, 26 years after the AT&T monopoly case, AT&T and Verizon are the only real two major players in the market.

Secondly, it shows that Apple's hip, underdog reputation should be abolished at this point. Once pushed to the underground by IBM and Microsoft, it's now as much of a major player in the American economy as its ever been, and the iPhone's exclusive deal with AT&T and requisite contract can hardly be called "hip," nor could the fact that Steve Jobs neglected to announce that Apple and AT&T increased its Data Plan by $10/month with the new phone. I think most Apple users no longer see themselves as cooler than the rest (that attitude has been taken over by Linux/Unix users), but any remaining Apple users that have this attitude should be smacked with a 17" monitor MacBook Pro.