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| reply to sonicmerlin
Re: Verizon obviously doesn't hire math whizzes You're correct in your assessment that what we have in the telecom industry is not "free market." I'm not arguing that it is, I was only trying to point out that the free market is not this evil force that many make it out to be.
The reason the telecom industry is not a true free market is because the government made a conscious decision that everyone should have access to the telephone grid, whether or not you live in BFE Timbuktu or Manhattan. While the gov't helped the telecom build out their networks, they also regulated the hell out of them, and for this reason there are only a few competitors. The same goes for the cable industry and franchise agreements.
In a true free market with far less regulation, there would probably be many more competitors (more choice leads to lower prices), but there would also be a lot more people without access to these services in the most unprofitable areas. These unprofitable areas would be paying more of the true cost for any of the services they do receive. | |
| said by lakerfan82:You're correct in your assessment that what we have in the telecom industry is not "free market." I'm not arguing that it is, I was only trying to point out that the free market is not this evil force that many make it out to be. The reason the telecom industry is not a true free market is because the government made a conscious decision that everyone should have access to the telephone grid, whether or not you live in BFE Timbuktu or Manhattan. While the gov't helped the telecom build out their networks, they also regulated the hell out of them, and for this reason there are only a few competitors. The same goes for the cable industry and franchise agreements. In a true free market with far less regulation, there would probably be many more competitors (more choice leads to lower prices), but there would also be a lot more people without access to these services in the most unprofitable areas. These unprofitable areas would be paying more of the true cost for any of the services they do receive. That's a complete and utter lie. Basically you've looked at the last 8 years of telecom oligopolies spurred on by a pathetically weak, corrupt, and industry-friendly FCC and concluded getting rid of even more regulation would be good for everyone.
It's the equivalent of a man hitting his head on a wall over and over again, and when it hurts deciding to simply hit harder.
The reason the telecommunications market doesn't approximate a free market is because of the huge barrier of entry to such a market. It's incredibly expensive to start a new ISP, especially when there's an incumbent already present. Not only do you need the vast initial capital to build the network, but the customers you want are already paying your competitor and will be incredibly hard to convert.
It's easy for a new competitor to attract the first 10% of the incumbent's customer base. But from then on it's a HUGE struggle for more. Educating consumers on the benefits of your service requires a giant marketing budget, and even then that's often not enough to overcome the inertia most people have when it comes to switching providers.
Your claim that without regulation "unprofitable areas" would pay for the "true cost" is ridiculous. You're making baseless assumptions about the cost of providing internet access to more remote areas. And yet for the last few years almost half of all small, rural telecoms have been building out fiber to their customers. This is without any help from their local or state governments, and they've managed to maintain profitability. Their experiences have also demonstrated that fiber to rural homes is only slightly more expensive than fiber to urban areas, in large part because almost all rural homes are situated right next to a major road.
The whole "expense" argument is tired and pathetic. | |
 pnh102Reptiles Are Cuddly And PrettyPremium
join:2002-05-02
Mount Airy, MD | reply to sonicmerlin
said by sonicmerlin:There seems to be relatively irrational belief among many conservatives that corporate taxes are simply passed on to consumers in the form of higher prices. It is hardly irrational because it is a 100% irrefutable fact. It is the economic version of the law of gravity.
And it isn't just taxes, every business expense is recouped from the customer.
said by sonicmerlin:It leaves out the obvious - if companies felt they could simply raise prices, they'd do it whether there were taxes or not. You ignore the fact that a business charges the highest possible price for a given product or service already. If a business raises its prices at this point, it risks losing sales. If sales decline and profit is lost or if after paying the tax there is too little profit (or a loss), the business might decide that providing the given product or service simply isn't worth the money.
Either way, the consumer pays the bill.
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Blagojevich / Madoff 2012! | |
| reply to sonicmerlin
Your claim that without regulation "unprofitable areas" would pay for the "true cost" is ridiculous. You're making baseless assumptions about the cost of providing internet access to more remote areas. And yet for the last few years almost half of all small, rural telecoms have been building out fiber to their customers. This is without any help from their local or state governments, and they've managed to maintain profitability. Their experiences have also demonstrated that fiber to rural homes is only slightly more expensive than fiber to urban areas, in large part because almost all rural homes are situated right next to a major road.
The whole "expense" argument is tired and pathetic.
Baseless, tired, and pathetic arguments? Oh please... Look at Fairpoint and some of these other "rural" broadband providers. They are folding like crazy. Verizon can't sell their rural customers fast enough...You're going to try and convince people that rural broadband is profitable when the government is regulating (capping) how much they can charge? Maybe a few "rural telecoms" can make a small profit in few pockets here and there, but they can't make a living serving only large swaths of rural area. The only one making baseless claims is you, as there is article after article on this blog demonstrating how unprofitable and how costly it is to provide rural broadband. If it was as profitable as you claim there wouldn't be people crying for universal broadband on an almost daily basis. | |
bicker
join:2007-05-10
Burlington, MA | (Sorry for the sarcasm...) Don't confuse the issue with facts! Don't you know that consumerists deserve to have the world handed to them on a platter, forcing some mythical "other" people to pay the bill for them having whatever they want, however they want it, and inexpensively? | |
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