Andy Kessler writes in the Journal today about how a commercial arrangement between companies producing complementary products (wireless service and wireless handsets) can shut out an innovative competitor which requires access to established infrastructure to provide a competing service.
One can’t really expect Goliath to feed David knowing full well what will happen in battle, but this reminds me of a paper I wrote while at NYU in 1996 about the impact packet switching technology would have on prices for long-distance telephone service. The paper looks sort of prescient after 12 years, since it predicted a sharp fall in prices and furious lobbying by wireline providers to restrict alternate voice providers access to call completion (i.e. the last mile).