Canadian Caps Aren't Economically Justified > Covering cost vs profit

Covering cost vs profit

It is ALWAYS about that even in a "monopoly" situation.

Companies want more accounts not less as there is a chance to do more cross-selling.

Also;

If the government beats down the ISPs it will IMO set you back as potential competitors will not bother to set up shop or even try.

reply to fifty nine
Market economics don't work if you have an addictive product like heroine or if you have a monopoly with regulatory collusion on a product that is rapidly becoming a necessity. You can argue that internet access is a luxury, but with each passing year, in a competitive global economy, immediate access to global information is such a competitive advantage that it really is becoming a necessity.

So what are you saying? That the internet should be funded by the Gov't and run by Gov't employees (like you?)

Good luck keeping costs under control if that's the case.

reply to Racket
Which private corporation is going to sell internet access at cost?

reply to fifty nine
The difference here is that they're getting government sanction raping of customers. There is no competitive for here. Everyone has caps, so there is no choice for the customer other than do without.

reply to fifty nine
This is true but just as the telephone and the telegraph line before it this i more than just "it's too expensive I don't need it". Internet access has become more of a neccesity than anything else. The reason for going to charing per byte has been the same it's inception, they are trying to cover their arses. They realized too late in the game that there are other services out there cheaper than their own they can get through the internet and they don't want to be a dumbpipe. They fear this more than the anything.

reply to fifty nine
Well, of course, economically speaking there certainly should be profit in even a decently competitive market. No one is suggesting that the price = marginal cost of atomistic competition.

But at $2/GB, and their cost at 3 cents a GB, that's a 98.5 percent profit margin. That is wildly obscene. And even that is downplaying it, as the substantial majority of users won't come close to hitting the 25GB/month cap. So these overages are pure profit.

So it's not financial need. And it's not congestion pricing, or they'd only invoke it during times of actual congestion. It's just pure greed, which is fine, that's capitalism, but in this case the regulator's job is to protect the interests of the entire country, not just a few powerful companies.

reply to Racket

reply to fifty nine

reply to fifty nine
No, I guess the private corporations should continue operating with government supported anti-competitive behavior.

reply to TheWiseGuy
In many major metropolitan areas you have a choice.

In fact, I live in a rural area and I have three choices:

Cable
DSL
fixed wireless

I have additional choices:
Cellular
Satellite
commercial broadband options (T1 etc)

In a city you may have several choices:
Cable (more than one provider in some cases)
DSL
wireless
telco fiber

The idea that there is no competition really has no basis in reality whatsoever.

reply to fifty nine

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NO U

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NO U

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reply to TechieZero
What is it with people who can't even do some basic research into monopolies in the past? Rockefeller mean anything? Old PacBell/AT&T? The only reason these companies could have accounts was because it WASN'T a CHOICE for the consumer.

And guess what, they were beaten down by the government. So naturally all of our petroleum supply, railroads, and phone services have all but disappeared right?

reply to Bill Dollar

reply to fifty nine