The companies that go under may be the one's currently providing the 'last mile': services for millions of americans. You cannot abandon the current ability to provide reliable communication service at a reasonable price to many rural and even suburban areas. Many of these people cannot afford cell phones (if available) or obtain any other alternative to land-line. I'm sure it is not cost-effective to solely serve them, while allowing major custoemrs to go elsewhere.
This is where the government bailout would help, by allowing access to areas that would be under-served, and allow time for solutions to that problem.
Jeez, pretty hefty rant this early on a Tuesday. Must be fear of sniper-related traffic in DC.
The companies that go under may be the one's currently providing the 'last mile': services for millions of americans.
Note that the companies will go under. No-one will go around digging up the fibre and copper which are already under ground. Companies that fail will have their assets bought by someone who is not failing. Control of the last-mile will move. The companies are trying to avoid corporate failure. The reason there is an argument, at a philosophical level, is not that some companies will die, but that control of the last-mile will move to companies which have a different paradigm entirely. That is what the corporates are trying to make the government fear, not the actual economics of bankruptcy for certain specific players.
...but that control of the last-mile will move to companies which have a different paradigm entirely.
Yes, I see a new paradigm. I'm not going to let competitors use my assets to compete against me. I'm not going to provide any services that are not cost effective. I'm not going to subsidize residential service by higher business line rates.
If you want economics to rule the last mile, don't be suprised by what you get.
This new paradigm will have to deal with the following:
Who is the provider of last resort? Who subsidizes those costomers?
How do you un-do the current business subsidization of residential service?
At what point do you insist that new capital investment be made?
The big bad greedy phone companies are playing the complex rates and regulation game that the people/government gave them. If you plan to replace them with little greedy phone companies with different rules, I don't think things will have improved.
A certain amount of confusion about what I was actually saying seems to have entered your post, but there are a couple of points to which I can sensibly respond:
How do you un-do the current business subsidization of residential service?
... Why would you want to?
At what point do you insist that new capital investment be made?
... Why should you need to? (an example: who 'insisted' that AT&T spent capital in the 50s? No-one needed to. AT&T needed new equipment to keep their business running, so they bought it.
If you plan to replace them with little greedy phone companies with different rules, I don't think things will have improved.
I don't recall saying I planned anything. I recall saying that the infrastructure which was built by one group of companies (which were divergent elements of an earlier stat-sponsored monopoly) would not be removed from existance or service were the company that dug the holes and pulled the wires to go bust. They would still be there. They would simply be owned by a different company. That was my point, in it's entirity.
I agree with this idea, somewhat. Once something becomes so vital to society it probably should be controlled by the government more - that is why we have it (the government) there, for the most part. Electricity, phone (for a long time), police, firemen, military, etc.
The problem, in this case, is that something that is so vital also changes so rapidly that the government couldn't keep up or even maintain it. This is a problem. Like when Microsoft hinted at taking their toys away if they lost the court case - how do you even control something this vital? Should the government totally take it over? Should the government stay out of the marketplace complete (as these companies would have wanted five years ago) and only come in to offer bailouts when those in the marketplace can't run themselves profitably?
The companies that go under may be the one's currently providing the 'last mile': services for millions of americans...This is where the government bailout would help
The "last mile" is still going to be there. As Albanac said, no one is going to come dig up the cables.
The problem is the companies that end up getting handouts are the ones that don't need it - those companies are the ones that should go out of business because they are inefficient, operating on an obsolete business model, or just corrupt. A quick look at the airline industry - and their reliance on the hub-and-spoke model of wasting money - should show how wonderful these bailouts truly are.
We shouldn't cry for the corporations that can't adapt, overspent based on faulty predictions, or went under because of fraud. That would serve no one, in the end.
The best way to help the "little" people is to let those businesses go under and allow others, with better ideas, business models, etc. use the infrastructure to provide what the "little" people need. The short term pain of some businesses going away and some bad debts being written off is nothing in comparision to the benefits. (who typically lays the power lines and water pipes? who typically profits from them the most in the end?)
You must be very young and/or naive to think that a bankrupt company simply disappears assets and all. What happens is that the assets are sold off, auction-like, at a fraction of the cost to build them from scratch. For instance, the Iridum satellite phone system went belly up, cost billions to shoot 77 (88?) satellites into orbit, plus spares, ground stations, all that, sold for pennies on the dollar or less, and still running, and now it can stay in business because the initial R&D expense has evaporated and is no longer part of the return on investment equation.
Who loses? The original investors. So what, they bet on the wrong horse.
EVERY bankrupt company goes out like that. Original investors lose, R&D is written off, lost, gone, evaporated. If any assets have remaining value, someone buys them up for what they are actually worth. If they have no worth, they go to the landfill. But they usually have soem value.
Think of what would happen if you declared bankruptcy. Would your house, car, computer, all disappear in a puff of smoke? Would the bankruptcy court order them destroyed? Of course not! They'd be sold to pay your debts. Same thing for bankrupt companies.
Great, thousands of miles of cable, thousands of telco stations, and they are going to be operated at a loss?!?!?
It's not just about the physical assets, but you need to be able to operate and maintain those assets utilizing a business plan that still keeps you afloat financially. Service along the coasts will never be a problem, but there a lot of miles in between the coasts. It will not be cost effective, so it will potentially be abandoned.P>
Unless you think those people don't deserve any access because the market doesn't make it affordable.
"Be there. Aloha."
-- Steve McGarret, _Hawaii Five-Oh_
'Little' people would suffer the most (Score:4, Interesting)
This is where the government bailout would help, by allowing access to areas that would be under-served, and allow time for solutions to that problem.
Jeez, pretty hefty rant this early on a Tuesday. Must be fear of sniper-related traffic in DC.
Re:'Little' people would suffer the most (Score:5, Insightful)
Note that the companies will go under. No-one will go around digging up the fibre and copper which are already under ground. Companies that fail will have their assets bought by someone who is not failing. Control of the last-mile will move. The companies are trying to avoid corporate failure. The reason there is an argument, at a philosophical level, is not that some companies will die, but that control of the last-mile will move to companies which have a different paradigm entirely. That is what the corporates are trying to make the government fear, not the actual economics of bankruptcy for certain specific players.
~cHrisRe:'Little' people would suffer the most (Score:1)
Yes, I see a new paradigm. I'm not going to let competitors use my assets to compete against me. I'm not going to provide any services that are not cost effective. I'm not going to subsidize residential service by higher business line rates.
If you want economics to rule the last mile, don't be suprised by what you get.
This new paradigm will have to deal with the following:
Who is the provider of last resort? Who subsidizes those costomers?
How do you un-do the current business subsidization of residential service?
At what point do you insist that new capital investment be made?
The big bad greedy phone companies are playing the complex rates and regulation game that the people/government gave them. If you plan to replace them with little greedy phone companies with different rules, I don't think things will have improved.
Re:'Little' people would suffer the most (Score:1)
A certain amount of confusion about what I was actually saying seems to have entered your post, but there are a couple of points to which I can sensibly respond:
How do you un-do the current business subsidization of residential service?
... Why would you want to?
At what point do you insist that new capital investment be made?
... Why should you need to? (an example: who 'insisted' that AT&T spent capital in the 50s? No-one needed to. AT&T needed new equipment to keep their business running, so they bought it.
If you plan to replace them with little greedy phone companies with different rules, I don't think things will have improved.
I don't recall saying I planned anything. I recall saying that the infrastructure which was built by one group of companies (which were divergent elements of an earlier stat-sponsored monopoly) would not be removed from existance or service were the company that dug the holes and pulled the wires to go bust. They would still be there. They would simply be owned by a different company. That was my point, in it's entirity.
~cHrisRe:'Little' people would suffer the most (Score:1)
Re:'Little' people would suffer the most (Score:2)
The problem, in this case, is that something that is so vital also changes so rapidly that the government couldn't keep up or even maintain it. This is a problem. Like when Microsoft hinted at taking their toys away if they lost the court case - how do you even control something this vital? Should the government totally take it over? Should the government stay out of the marketplace complete (as these companies would have wanted five years ago) and only come in to offer bailouts when those in the marketplace can't run themselves profitably?
Re:'Little' people would suffer the most (Score:2)
The "last mile" is still going to be there. As Albanac said, no one is going to come dig up the cables.
The problem is the companies that end up getting handouts are the ones that don't need it - those companies are the ones that should go out of business because they are inefficient, operating on an obsolete business model, or just corrupt. A quick look at the airline industry - and their reliance on the hub-and-spoke model of wasting money - should show how wonderful these bailouts truly are.
We shouldn't cry for the corporations that can't adapt, overspent based on faulty predictions, or went under because of fraud. That would serve no one, in the end.
The best way to help the "little" people is to let those businesses go under and allow others, with better ideas, business models, etc. use the infrastructure to provide what the "little" people need. The short term pain of some businesses going away and some bad debts being written off is nothing in comparision to the benefits. (who typically lays the power lines and water pipes? who typically profits from them the most in the end?)
Oh for pete's sake! (Score:2)
Who loses? The original investors. So what, they bet on the wrong horse.
EVERY bankrupt company goes out like that. Original investors lose, R&D is written off, lost, gone, evaporated. If any assets have remaining value, someone buys them up for what they are actually worth. If they have no worth, they go to the landfill. But they usually have soem value.
Think of what would happen if you declared bankruptcy. Would your house, car, computer, all disappear in a puff of smoke? Would the bankruptcy court order them destroyed? Of course not! They'd be sold to pay your debts. Same thing for bankrupt companies.
Re:Oh for pete's sake! (Score:0)
It's not just about the physical assets, but you need to be able to operate and maintain those assets utilizing a business plan that still keeps you afloat financially. Service along the coasts will never be a problem, but there a lot of miles in between the coasts. It will not be cost effective, so it will potentially be abandoned.P> Unless you think those people don't deserve any access because the market doesn't make it affordable.