Regulated Software Monopoly

This is a DevilsAdvocate page. This does not reflect my own opinions, but does represent some ideas I felt should be publicly aired and critiqued. Also, this is primarily addressing the American IT industry, and may not apply to circumstances elsewhere. -- JayOsako

Proposal:

In certain areas of the IT industry, MicroSoft, InternationalBusinessMachines and OracleCorporation each hold (or have held) a monopolizing share of the market, primarily on the strength of marketing rather than on the quality of their products. The majority of computer programmers and technicians, quite understandably, feel that this is a negative force in the IT industry, and it is the source of a great deal of resentment towards these companies.

However, monopolies are not necessarily undesirable. Regulated monopolies exist for a reason. According to some analysts, many types of services can better provided by a single source rather than by the free market. As a result, there are some fields where regulated utilities are granted legal monopoly status. This was once true about telephone service; it is still the case with water and power services in most areas. Furthermore, there are strong historical and economic reasons to think that the computer field, and software in particular, tends to favor monopolies over diversity.

So the question becomes, would certain areas of the IT industry - or even the whole industry - be better served by a formal, regulated monopoly rather than by competing vendors in a free market?

More importantly, would the consumers of the IT products be better served by a regulated monopoly?

True, there wouldn't be any competition. However, the government could place restrictions on pricing, add use restrictions (i.e., professional licensing of computer programmers, user competency licenses), restrict the fields they could operate in (e.g., permit Microsoft to produce only operating systems, and force them to divest their other products) and perhaps more importantly, force strict quality and oversight rules on the monopoly, such as requiring and third party code reviews and publication of source code before a product could be legally distributed. If the company failed to comply, they would be fined, stripped of their protected status, or even have their monopoly grant given to another company.

It would also rein in the footloose and rather chaotic IT industry, forcing it to 'grow up' and take its professional obligations to heart, and end the wild speculation that surrounds start-ups. While it may lead to stagnation, perhaps a period of steady, quiet inactivity is exactly what the IT consumers need. The 'running on a tread mill' moving-quickly-but-getting-nowhere pace of the change is one of the reasons the majority of users have difficulty learning and understanding current systems; no sooner do they begin to understand one version of a program, than another incompatible version comes along which they will have to learn over again. No wonder nearly half of all Windows users still run Windows 98, four years after it was officially replaced.

Discussion:

Okay. As I see it, the question here isn't about legalizing a monopoly or anything like that. It's about standards. Right now there are few standards for operating systems, GUIs, application interfaces, database transactions, or anydurnthing else out there. Of course we can point to SQL and Linux and PARC and a few other things that have become sorta de facto standards, but how it that stuff enforced? By whom? In what domain?

If there were a benign emperor overseeing all this stuff then we could have standards for everything. The Emperor could appoint XP types to create acceptance tests for all new products being submitted to the market. No need to share your source code with the world -- just make sure the bar is green.

It's been tried. Those of us who are old enough to remember that there was a Berlin Wall have seen it tried and seen it fail spectacularly. I don't know what the IT equivalent of a factory turning out only left shoes is, but I don't think we want to find out.

The last time the US Government tried to bring fairness into a market it was to ensure fair access to home mortgages. How's that worked out for you?

--MarcThibault

Another point is that regulation is only effective when the regulators are not beholden to the regulated. When the corporate coffers fund second careers for those leaving the regulatory agency, it's difficult to see the regulators blocking any request from the monopoly.

See: RegulatedSoftwareIndustry, ProfessionalLicensingOfProgrammers, ComputerDriversPermit

Contributors: JayOsako, MartySchrader

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