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- Dec 2022
They didn't block new features for shits and giggles, though – the method to this madness was rent-extraction. The iron-clad rule of the Bell System was that anything that improved on the basic service had to have a price-tag attached. Every phone "feature" was a recurring source of monthly revenue for the phone company – even the phone itself, which you couldn't buy, and had to rent, month after month, year after year, until you'd paid for it hundreds of times over. This is an early and important example of "predatory inclusion": the monopoly carriers delivered universal service to all of us, but that was a prelude to an ugly, parasitic, rent-seeking way of doing business:
Predatory inclusion is a form of rent-seeking in which one preys on customers using monopoly power to extract excessive value for small add-on services.