Are social networking sites the telcos of the future?

Billy Bragg writes on The Royalty Scam over at the NYTimes, complaining that social networks aren’t rewarding music artists who helped make them popular:

“Social-networking sites like Bebo argue that they have no money to distribute — their value is their membership. Well, last week Michael Birch realized the value of his membership [selling it for $850 million to AOL]. I’m sure he’ll be rewarding those technicians and accountants who helped him achieve this success. Perhaps he should also consider the contribution of his artists.”

Because of economic principles like the network effect, social networks move quickly from zero value to millions. And once there, the networks can become the big gorilla in the supply chain, defining the rules or play and who gets paid how much. This starts to remind me greatly of telcos like AT&T or Verizon, dominating there customers and suppliers like old west railroad barons. The one nice difference for social networks is that they can often fall as fast as they rise; locking-in customers is a very tough feat.