In 2008, getting your hands the new iPhone meant signing a two-year AT&T contract

a. How did AT&T, the exclusive provider of wireless service for the iPhone in 2008, influence the wireless telecommunication market? The exclusive arrangement between Apple's iPhone hardware and AT&T's network changed the relationship between the two entities. The hardware became just as important to consumers as the network it was used on.

b. Explain why the wireless market might tend toward either a single firm or a small number of firms. Why might this justify allowing a regulated monopoly to exist in this market? In my lifetime, we have seen AT&T declared a monopoly in what is now known as the landline market, then we saw it broken into smaller companies, then we saw the coming of wireless technology where there were many competitors. What we are seeing now for the second time in the telecommunications industry is the consolidation and shared use of the expensive infrastructure needed to make cellphones viable. It seems as though we should conclude that this is an industry that definitely experiences economies of scale. In turn, that may mean that a regulated monopoly is the best option, similar to other necessary utilities like electricity, gas, and water.