Tuesday, July 26, 2005


It was inevitable that the big wireless carriers like Verizon and Sprint, in the face of numerous consumer complaints and lawsuits, would have to give up their legal blockades to cellphone number portability. Now that you and I can switch from one carrier to another and still keep our phone number, the carriers will have to figure out fresh, compelling ways to build customer loyalty.

It was inevitable that the National Association of Realtors, under threat of a Justice Department lawsuit, would have to drop the practice of limiting the home listings that some discount online brokers could display on their website. Now, intermediaries like the NAR will have to figure out new ways to create value for their customers.

For the future, I can assure you that despite the huge lobbing muscle of the giant telco’s and cable companies, they will not be able to stop the growing movement towards allowing municipalities to provide ultra-cheap Wi-Fi wireless high speed internet to their citizens. It’s inevitable. I can also assure you that despite its armies of lobbyists, it's inevitable that American Airlines will not be able to preserve its long-haul flight monopoly against Southwest Air in the Dallas area. The old protectionist Wright amendment, which prevents Southwest Air from launching domestic long-haul flights from its Love Field hub in the Dallas area, will be repealed. That’s how things work these days.

What’s going on is that in the face of an increasingly transparent and elastic economy, protectionist and legal barriers will continue to melt, and companies will have to succeed on their own merits. Certainly, there remains an important place for lawyers and lobbyists. A company would be foolish not to judiciously use them. But the moral of the story is this: A company that is serious about achieving sustained competitive advantage proceeds “as if” there is no legal and government “protection” any more, because ultimately, in a global free-market environment, there isn’t.


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