Open Letter to FCC Chairman Powell 298
Adina Levin writes "An open letter to FCC chairman Michael Powell signed by internet and tech industry pioneers explains why the government shouldn't prop up the ailing telecom behemoths. Telecom companies bought expensive network technology with long bonds. That technology has been made obsolete by gear getting faster and cheaper all the time by Moore's law and Metcalfe's law. The telecom companies are asking for the equivalent of a bailout for their investments in sailing ships after the advent of steam. The way to speed the deployment of broadband to homes isn't to prop up businesses based on old technology, but to let uncompetitive businesses 'fail fast', and let new competitors play."
Legitimate reason for bailout? (Score:5, Insightful)
Re:Legitimate reason for bailout? (Score:5, Insightful)
Doesn't their existing infrastructure, and
social dependency on that infrastructure, give them a somewhat legitimate need for a bailout?
As far as I know, the citizens of the US are engaged in an ongoing "bailout" of the Baby Bells... that's what all of the tariffs, etc. on the standard phone bill are for.
We've *paid* for the infrastructure, allowing the telcos to profit from their regional monopolies for decades.
I think that it is time to reclaim our ownership of it, decouple the infrastructure from the services by making infrastructure maintenance the province of non-profit organizations, forcing the the Baby Bells to compete for services on a level playing field.
Of course, it will never happen - the Baby Bells spend enormous amounts of lobbying money at both the state and federal level to retain their "ownership" and control of "their" infrastructure, and the fact that our money was spent to build out their regional infrastructures is something they'd prefer everyone ignore.
Oddly, one of the justifications that the Baby Bells continue to use for tariffs is to guarantee services in low population density areas... yet these regions are still lagging far behind more populous locations in DSL availability (and even quality POTS lines) because it isn't "cost effective" for the Bells to roll out such services there, despite the fact that the tariffs are supposed to eliminate cost considerations in such places in the first place!
Further, the ILECs continue to prevent competition from CLECs whenever possible.
True story: Here in Upstate NY I had a customer that wanted high speed Internet access... they are located in a small rural town, and a T1 line wasn't an option due to the cost. The POTS lines are lousy (and have been for the nearly 2 decades that I've done service there), and the local cable company didn't offer cablemodem services because their infrastructure couldn't support it and the owner wasn't prepared to make the financial commitment to rebuild the cable plant in town.
The ILEC in this case (Verizon) wouldn't even offer them ISDN, which was in theory available, would have been at least acceptable for their Internet needs (which were basic email and light Web-browsing for some 20 LAN users).
Well, after some searching, I found a CLEC that could offer DSL albeit "only" at 256Kbps due to distance) and local business dialtone service as well. There was much rejoicing, and plans were made to roll it out. A few other companies in town discovered what this company doing, and they too expressed an interest in DSL for their Internet access. It looked like a "win-win" for everyone: My customers would get cost-effective Internet access, lower cost business telephone service, the CLEC would get business that Verizon couldn't (or wouldn't) provide and my company would make money installing the firewalls, routers, mail servers, etc.
When Verizon found out what was going on, they closed the POP from which the CLEC was operating, splitting the services between 2 small cities in the area, citing "lack of demand for services" from that location as the reason for their actions, thereby eliminating the CLEC's ability to deliver local dial tone and DSL services to that town.
This is the same Verizon that is now allowed to offer long distance services because they have sufficiently opened up the last mile to competition...
The more things change, the more they stay the same, at least here in Verizonland.
It's obvious to me that so long as the RBOCs have control of the last mile, continue to have it supported by tax dollars, credits and tariffs, and abuse their monopoly control over it, that they will *not* compete, but will simply continue to ask for more money from us and the government when their mistakes cost them money.
Time to wean them from the public teat. No more bailouts!
SBC too (Score:2, Interesting)
What the heck, over?
No, was Re:Legitimate reason for bailout? (Score:5, Interesting)
Doesn't their existing infrastructure, and social dependency on that infrastructure, give them a somewhat legitimate need for a bailout?
No.
In fact, quite the opposite. The ideal combination of market and regulated solutions would be to strip the infrastructure part of the task away from the ILECs and create a new category, WC. The Wiring Carrier would handle building out infrastructure, and would sell it to whatever LEC pays the bills. That would put CLECs like Covad on semi-equal footing with the ILECs, who currently use their monopoly over physical infrastructure to beat the competition down like a red-headed stepchild.
I say "semi-equal footing" because in all likelihood, the people constituting the WC will be ex-ILEC lifers, the type that have proven their willingness to creatively interpret job orders in such a way as to screw the competition. After time, though, they'll die off and the WC will deal with whoever pays the bills.
It's our infrastructure. Our universal service fees have paid to make sure it gets built. However, it's managed in a way that allows the incumbent to screw the competition and screw the customer. They've had their day. Let's take it away.
Re:Legitimate reason for bailout? (Score:4, Insightful)
I don't know about you, but I'd sure miss the powers granted to me by the fact that I live in a democracy right now, and the rights granted to me by my country's constitution.
Go back to the jungle, or participate in a free fight, if you think that's best for humanity. But please allow the rest of us to strive for some civilization. Thanks.
Re:Legitimate reason for bailout? (Score:3, Insightful)
I'd take your civic-mindedness at a higher value if you understood that the Constitution doesn't grant rights.
Pay particular attention to the 9th and 10th amendments.
Re:Legitimate reason for bailout? (Score:3, Offtopic)
I don't know of any rights granted to me by the constitution.
Read it again.
Compare the government of the United States with governments typical 250 years ago and with various contemporary governments in other parts of the world such as North Korea, Saudi Arabia, Myanmar, Iraq, Zimbabwe, etc.
Most U.S. citizens are spoiled by not having direct first-hand experience with a big league oppressive regime. Take a 6 month bus tour of Central America and tell me when you get back that we aren't lucky to have the luxury to be actually arguing over something like a ballistics database.
Personally, I rather enjoy the right to not be woke up in the middle of the night by jack-booted thugs displeased with my criticism of some leader in government.
Re:Legitimate reason for bailout? (Score:2)
Re:Legitimate reason for bailout? (Score:2)
declare that its citizens can do as they please within this framework.
Aye, there's the rub.
My government is powerful, so I'm grateful for restrictions placed upon its use of that power.
But my life is full of interactions with other non-governmental organizations, such as my employer, my telephone service provider, my credit card company, etc, that have a substantial impact on my life.
They are free to require quite a lot of things of me that the government is not permitted to do.
To be sure, if I don't agree with the terms of that interaction, I'm certainly "free" to go live a pauper's existence in a cabin in Montana. A rotten choice, though, to give up some privacy for material comfort.
Please piss in this cup as part of the pre-employment screening. Video surveillance of the premises is done for your protection.
Re:Legitimate reason for bailout? (Score:3, Insightful)
Which is why every day, I consider leaving the US.
Re:Legitimate reason for bailout? (Score:4, Interesting)
I did read it again. Apparently, I understood the words it contained. It doesn't grant rights; it recognizes them. The notion that rights exist only because a piece of paper says they do is rather horrifying. The Constitution exists to spell out the specific powers of the government, not the specific rights of the citizenry.
Here, look
Amendment 9: The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.
Translation: Just because we mentioned a few rights doesn't mean others don't exist. They do, because this document isn't the source of rights.
Amendment 10: The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.
Translation: This document says what the government can do. If it doesn't say the Feds can do it, then the Feds can't do it. If it says the states can't do something, than the states can't do it. Other than that, let the people decide how they want their communities to be run.
Yeesh. Before making pronouncements about what the Constitution says, maybe you should try understanding it .
Re:Legitimate reason for bailout? (Score:2)
Re:Legitimate reason for bailout? (Score:2)
Fundamentally wrong? What tablets of stone are you getting this from?
Methinks you should apply a little skeptism before making such broad statements as these.
Re:Legitimate reason for bailout? (Score:5, Insightful)
Like health care? "Sorry, sir. I know there's a gaping wound in your skull and that it hurts, but your credit is no good here. Please go away and die outside in the gutter with all the other poor people."
Like law enforcement? "I'm sorry, sir, but there's nothing we can do. You have not paid for our police services. We cannot dispatch officers even if there's a murderous psychopath banging on your door with a bloody knife in his hand."
Like rescue services? "I'm sorry to hear that your house is on fire, sir, but we are a business not a charity. You should remember to pay your bills next time."
And so on...
People like Friedman and Hayek have proved
You can't really prove anything in even hard sciences like physics. Saying that something has been proven in economics or sociology is just ridiculous. Like psychology, economics and sociology are not hard, predictive sciences (some would say that they're not science at all) in the same sense as physics or chemistry.
If capitalism were a scientific theory, it would have been dropped a long time ago because it has no real predictive power and often contradicts with the real world observations.
Re:Legitimate reason for bailout? (Score:2, Insightful)
It might not be that way with a head injury... but it's that way with AIDS patients in lots of cities. Not to mention those needing an organ donation. And lots of other cases since the HMO's became popular.
Re:Legitimate reason for bailout? (Score:2)
Re:Legitimate reason for bailout? (Score:2)
Like law enforcement?
Like rescue services?
LIKE PHONE SERVICE? "I'm sorry, but your account is past due -- no service for you. If you pay us all of the access charges, universal service charges, 911 charges, number portability charges, in addition to our wildy overpriced monthy rate, we'll be happy to restore your poor-quality analog line. Wonderful.
We subsidize certain services (Police Fire, sometimes health care) as a matter of public policy. Why should we subsidize a nice-to-have-but-not-essential service if it wasn't a public service to begin with, especially if it impairs the adoption of better technology that would probably cost less than the crap we have now? Investors bought telco stocks and bonds, knowing that certain risks were involved, premature obsolescense being damn near the top of the list.
For the most part, the US economic system does a wonderful job of purging itself of obsolete companies. The death of such companies creates opportunities for better competitors.
We think nothing of closing a factory and moving it to Mexico or China in search of cheap labor; how is this any different? It's tragic for individuals in the short run, but in the long run, we're all better off when people migrate to more competitive industries. If the telcos have to die anyway, get it over with. If we grant European-style subsidies to every industry that has a problem, we'll have sky-high unemployement, and a reduced standard of living (like the Europeans do). Once everyone is getting a subsidy, the tax burden will choke off any possibility of economic growith.
My retirement plan may be adversely impacted by the telcos demise, but it will have time to bounce back. Having subsidized telcos won't change my expectation that they will continue as a underperforming investment. Thanks, Uncle Sam, but no thanks.
Re:Legitimate reason for bailout? (Score:5, Insightful)
And I am happy to know that if I am burgled or mugged the criminal will rarely have a gun and that it's even rarer that the gun will be used. Regardless of whether the cops will catch the criminal, I can cope with losing some money or property.
Health care? You have only to go to a socialist country to see how that works. They won't throw you out in the gutter, but they will make you get in line, possibly for months to remedy serious ailments such as cancer.
Well, you could say I've been to a socialist country: I was born in a one with mostly state controlled economy. I am currently living abroad in a Northern European country which has had a large socialist party in the government for the last twenty decades. And you know what? The living standards are excellent in both countries. Working public transportation, no people living under the poverty line (check out the US and UK stats in the CIA worldbook for comparison), free public schooling, public libraries and goverment subsidized university level education to allow even the low wage blue collar workers' kids to have an advanced degree if they so choose. Crime is low because the social "safety net" will provide you with basic necessities even you go completely bankcrupt.
As far as your medical care argument goes, you couldn't be more wrong when it comes to Northern Europe and Scandinavia (UK public health care is in real shambles, though). As I've pointed out in one of my recent posts, I've undergone several surgeries. The latest problem with the eye was diagnosed at a private clinic (you know, private clinics are allowed even if the public health care is run by the government!), I got a referral to the local hospital (state run university hospital) and was under the knife in a week. I spent another week in the ward and paid $200 for that - the $8000 operation itself was paid by the society. I pay the progressive 28% income tax gladly for a system like that that is accessible to all citizens regardless of their income (unlike insurances).
You should know more about practical socialism before your spout nonsense like that. That's the kind of black and white reasoning that's not realistic. There is a middle ground between dog-eat-dog capitalism and total commitment to a government run economy, you know.
Re:Legitimate reason for bailout? (Score:2)
I wonder...I'm in the US, middle class. I pay about 30-ish% federal income tax, probably (ballpark, not pulling out the figures to look) 10% state income tax, social security tax, medicate tax, sales tax (6.5%), personal property taxes, etc., etc., etc.
I would estimate that over half of my earned income goes back to the government in some way, shape, or form. Would over 50% taxation make the US a socialist nation?
Re:Legitimate reason for bailout? (Score:5, Insightful)
I just moved back to the states from the Uk, having lived there for 3 years and 1 year in Switzerland.
I found the health care in switzerland to be excelent, even though it was private. You had to have healthcare, to be registered in a city.. which you had to be to legally rent an apartment. The taxes where I was living was about 14% total, not including taxes on things like Garbage (yes,a stamp had to be put on every bag you take out.. at 1 dollar per bag, it encourages you to recycle everything you can).
My wife went to the doctor a few times, for this and that, and was quite happy with the modern clinic. The doctors seemed progressive and would offer medicine that was both herbal and western in nature. (No robotusin for a cold, but a herbal concoction you get at the pharmacy).
Anyway, I loved the swiss method of handling things, and at 1% un-employement, and guarding their borders in a way that would make the queen of england prooud, they don't seem to have a lot of the problems that other EU countries have with the poor and destitute.
Now, england is a complete flip-side. I have spent more hours sitting in a clinic waiting for the bloody doctor to just show up for work. (No appointment at my local surgery). When the doctor does show up, they seem to not give a damn about what the problem is. My wife sat waiting to be seen for almost 6 hours. No joke. A co-worker waited 7 months for status on a testicular lump that he was worried might be cancer. Yada yada.
When we found out we where having a baby, our first, we decided to pack our stuff up and move back to the states. Pretty scarry stuff. I can't speak for the rest of the EU, I am sure that they are in better shape than Uk. I was watching a debate on Brittish TV, and there is a statistic that if you get stomach cancer, your chance of survival is 6%. In the US your chance of survival is 61%. Fricken nuts.
And as for shoving people out the door. When we came back the US, we didn't have a job or much money. We immediately qualified for medicade and even after I got my new job, the state took care of the child birth and all the expenses including 6 months of birth control after the child birth for my wife and 3 follow up visits. Now we are back on private health care with my job, but to say that the hospital kicked me out is plain false.
I don't think that my case is special. I don't think that a lot of people realize is that in the US, there is help if you really need it. I am not a bum out on the street, but when we moved back to the US.. we did need some help, and I am glad we had it.
Private sector will always be better off than public, even in healthcare. What they need to do is put legislation in to keep the mall-practive law-suits under control and help keep the costs down so insurance isn't expensive for everyone. Look at the mortality rates across the board, you will be surprised what america's health care is churning out. It was a big enough difference for me to move across the world to have our baby.
Cheers
Re:Legitimate reason for bailout? (Score:3, Insightful)
Re:Legitimate reason for bailout? (Score:5, Insightful)
The primary reason most people advocate capitalism is ETHICAL, not scientific. It was liberals and their endless dreams of micromanaging the perfect society that gave birth to that study.
Indeed - you only have to look at the fine examples of capitalistic ethics provided recently by companies such as Enron, Worldcom, Global Crossing etc to realise how unnecessary government regulation in the free market is.
As far as your other statements, many of us wish there WAS no police force. I am perfectly capable of defending myself, and have a license to carry a Ruger .38 to do so.
Ah yes, and of course the police do nothing that giving everyone a gun wouldn't. It's like I've always said: you can't beat a heavily-armed lynch mob for a meticulous and professional criminal investigation leading to a fair and open trial.
Health care? You have only to go to a socialist country to see how that works. They won't throw you out in the gutter, but they will make you get in line, possibly for months to remedy serious ailments such as cancer. Even dialysis machines are hardly easily accessible.
And of course, limiting access to healthcare according to personal wealth or employability is such a fair way of arranging things, isn't it? After all, it's obviously entirely your own fault if you're poor or unemployed. I'm sure many of the /. readers left jobless by recent events in the tech industry will back me up on this one.
Incidentally, which socialist countries are you thinking of? How about Cuba as a counter-example? The health service there is excellent, and completely free at the point of use.
Re:Legitimate reason for bailout? (Score:3, Interesting)
Fair and open trial?
You mean like the trial of in the UK in 1986 of Eric Butler, a 56-year old BP executive who was attacked in a London subway car? His assailants tried to strangle him and started beating his head against the door, and nobody came to his aid. He unsheathed an ornamental blade in his walking stick and stabbed one of his attackers in the stomach. He was tried and convicted of carrying an offensive weapon.
Or like the English homeowner in 1994 who used a toy handgun to detain two burglars who had broken into his home while he called the police, only to be arrested upon their arrival for using an imitation gun to threaten or intimidate? Or elderly woman who in the following year fired a toy cap pistol to drive off a gang who were threatening her, only to be arrested for "putting someone in fear"?
Or maybe you meant Tony Martin, who after having his house burgled 6 times in a village with no local police force used a shotgun to kill one burglar and wounded another, only to receive a life sentence for defending his life and property? And, of course, the wounded man who is now out of jail has received 5,000 pounds in legal assistance from the government in order to sue Martin.
You know, putting aside the fact that an armed populace doesn't denote lynch mobs and vigilante justice, but rather the ability and willingness of a citizenry to defend itself against injustice, a heavily-armed American lynch mob certainly does sound like an entity that's more familiar with the concept of justice than most European governments I can think of.
Capitalism is ethical? (Score:5, Insightful)
In what theory is capitalism ethical? Nothing in my readings has any statements about an ethical dimension.
> Health care? You have only to go to a socialist country to see how that works. They won't throw you out in the gutter, but they will make you get in line, possibly for months to remedy serious ailments such as cancer.
So what happens if I have cancer, but no money for treatment? How is this different to the "socialist" case?
> You need to think about more than one possibility. Chanting to yourself over and over again "Government can solve my problems, government can solve my problems" is not going to work.
As opposed to chanting "Government can't solve my problems" or "Only the market can solve my problems"?
neo-economic-liberal bullshit (Score:5, Insightful)
I sincerely hope that you are joking, or playing devil's advocate. The "market economy" is a fiction, created by government contrivance. Do you really believe that it is some sort of objective truth? or that it is the ultimate expression of human desire for advancement?
The market economy has done such an excellent job in protecting the environment and promoting individual liberty. Ironically enough, the "free market" has given us the most blatent interferences in market freedom that we have seen.
This is not to say that the market is undesirable or is not an excellent allocator of (some) resources - just that is it insufficient as a complete societal model.
Re:neo-economic-liberal bullshit (Score:2)
Perhaps if you weren't so busy trying to be patronisng to the parent poster you would have noticed that he or she wasn't denying the existance of markets.
Re:Legitimate reason for bailout? (Score:3, Interesting)
Economic 'proofs' aren't worth the paper they're written on, which is why the Nobel Prize for Economics is a joke. They may as well have one for psychology as well.
The Nobel Peace Prize is ludicrous as well, but that's because it's given as an encouragement prize... maybe Arafat could give his back now, for example. Oh, and because a Peace prize funded by the estate of an explosives developer seems... erm... inconsistent at best.
Re:Legitimate reason for bailout? (Score:2)
I understand that you were responding to a comment that was surreal at best, but I could not really let this pass.
The problem with proofs (economic or otherwise) is that they can only be used "in real life" when the axiomatic system and additional assumptions that underlie them are sufficiently close to reality. Hayek got a Nobel in Economics not for what a lot of Hayek fans think he did, but for a fairly general argument about the availability of relevant information to economic planners and their ability to set prices. It really is and was a useful result.
Interestingly, this year's winners of the Nobel in Economics were pioneers in the use of actual experimental data to address issues that were crucial to economics, and one of them was a card-carrying psychologist. I doubt this will create any huge shift in how economists do most of what they do, but I think that it is important to note that there is and will be a more empirical kind of economics being done that might make the science a bit less "Ivory Tower" than it has been.
Now, something that really worries me about the current line-up of Nobel Prizes is the extent to which the amount of actual science being done has "drifted" away from the set prize categories. I think this is particularly true for the "Medicine or Physiology" Prize, which is basically the only one anybody in medicine or any biological science can ever hope to win. To be completely frank about it, there are waaay more deserving potential recipients in those fields these days than can ever possibly win given the current rules. The pure science of Biology has absolutely exploded in importance in the last half century, and Medicine has made breath-taking progress as well, but the prizes were set up a century ago, so everybody has to queue up in these two vast fields. I can't help thinking that if Nobel were establishing the Prizes today, that this and similar problems would be fixed somehow. In the mean time, it's clear to me that while there are certainly some psychologists who would be deserving of a Nobel Prize (and Kahneman was among them), the field as a whole really has not yet reached the point where amazing progress is a yearly event, to the point where ignoring the field prize-wise is anything like the embarassing situation in the life sciences.
von Hayek (Score:2, Insightful)
I want to mention that Hayek, at least in "The Road to Serfdom", does not call for an abolishment of government. He seems to acknowledge, as many of us do, a need for it. Our founding fathers did.
The problem is, combined federal, state and local government here now represents about 50% of the market place, as opposed to around 5% prior to 1910. Truly this is *the* metric that shows clearly the US is now a collectivist / socialist enterprise.
History shows (Russia, National Socialist Germany, etc..) us that such a model does not work. It is a non competitive model. At best it can limp along, but will not provide liberty, self determination, self actualization. It cannot provide *opportunity* for a middle class. "We're in a tight spot!" - Oh Brother.
The states now feel the pinch (punch) of this last fed induced mania. For some excellent data and commentary on the current state, see Michael Hodges "Grandfather Economic Report". Best, Dave
Re:Legitimate reason for bailout? (Score:2)
Couldn't this result in massive amounts of money being invested in social engineering to get us all to like the same things, meaning huge profits for companies?
The market economy depends on a strong government. (Score:5, Insightful)
Without such a strong government, producents will join force in guilds, who keep the market closed to outsiders, by force if necessary. This was the situation until the development of nation states with a strong King as the leader.
Unfortunately, this violates the foundation for the Libertarian belief, namely that all evil is created by government and all good come from the market. And as always when belief and reality slashes, the believers are unable to see the reality.
Of course, this isn't an excuse for the government to take up other tasks than ensuring that players on the market follow the rules.
Re:The market economy depends on a strong governme (Score:2)
Re:Legitimate reason for bailout? (Score:5, Informative)
I suggest you go re-read Friedman. First off, he did not prove that free markets are the best solution, he merely made a (very compelling) argument that it is so. Second, Friedman himself pointed out various examples where 'Market failure' can occur. One example he cites is about public works, for example people might be willing to pay a fee for using properly maintained sidewalks, yet it would be economically unfeasible for a private company to collect these tolls. So instead we all pay a small amount of tax and the government takes care of the sidewalk.
There are other factors that may may prompt a government intervention: in case of the telcos, the government may decide that having a phone line is a basic right, and that telcos are supposed to hook everyone up for a basic fee, with the easy hookups subsidising the ones in remote locations. If governments did not do this, then all the telco's would tell the few customers living in the sticks to get stuffed if they wanted a phone hookup.
I am not saying any of that is right or wrong, but there is nothing fundamental about letting the market economy run its course. It may be the most efficient, and there is a strong case for any government to think twice before interfering with the free market, but not even Friedman suggested to leave everything to the market.
But what if they did? (Score:3, Insightful)
sidewalks: probably wouldn't exist - except along the lines of "gated communities", with boards far more oppressive than the regular governments could ever dream of. In the cities where sidewalks are absolute necessities, the quality of the sidewalk would be directly proportional to the affluence of the neighborhood - and might even help propel runaway gentrification and disinvestment (or not, since any functional society needs people from a variety of economic levels - that's why they've got rent control in New York).
telcos: until the advent of wireless/satellite communication, the rural areas would almost certainly remain poorly or completely unconnected, putting them at a significant economic and social disadvantage. Industrialized farming would have had an even easier time taking over the farming market. Populations would be much more concentrated in the cities. On the positive side suburban sprawl would probably be significantly curtailed.
If free market principles applied to roads (and to a lesser degree power) the exact same things as above would probably happen, only much more so. As for water and waste... those are two things where the community, up to and including the international community, gets involved because it affects them directly.
Of course there are countless examples on the books along these lines, and where real money is involved it gets much uglier. Unless the government regulates it into something acceptable at the behest of the (generally angry) people, the rich and powerful will increasingly manipulate and monopolize the markets (and the law, and the money) legally and illegally for their personal gain regardless of how badly it affects others. "Free Market" is an oxymoron. Those who want it the most are always either rich or think they could be - and if they actually got it almost all would be disabused of their hopes and money rapidly.
A meddling beauracracy versus a greedy oligarchy -fiscal democrats versus moneyed republicans.
Re:Legitimate reason for bailout? (Score:4, Informative)
When the government doesn't do anything to 'hinder' the economy, you get a situation like the roaring 20's, which leads to rapid inflation, and overvalued markets. Then you get the depression. The reason the world pulled out of the depression was because governments started spending lots of money (another interference in the market). The first economy to pull out of the depression was Germany, because their leader said, "I don't care if we don't have money - just build me a frickin' army!" Of course, they could have spent the money on road or schools too, and that would have worked, but hindsight in 20/20.
In more modern times, the central banks *agressively* set interest rates higher if the risk of inflation gets too high, so as to slow the economy, and governments will increase spending and lower interest rates if the economy slows down too much.
Get this through your head: the economy is naturally Unstable! This is what economists have learned in the past century. Economies have to be regulated by governments or they fail dramatically. You owe your prosperity to Greenspan and people like him (e.g. John Maynard Keynes).
As an aside... this natural instability, and our ability to control it with a feedback loop is why I think economists and control systems engineers like myself should spend some time working on the problem together. The problem of economic balancing and the control systems problem of balancing an inverted pendulum have many interesting similarities.
Ah (Score:2)
You must be talking of KennyBoy Lay who came whining to his good pal George W Bush (who of course together with his conspirator in crime Dick C. would prefer to forget that they ever knew this guy) for help when his mismanaged company was shit up creek.
Man, you should switch to another propaganda channel, fast!
Re:Legitimate reason for bailout? (Score:2)
Re:Legitimate reason for bailout? (Score:2)
Would letters from other people help? (Score:3, Insightful)
Well, yes and no... (Score:5, Insightful)
Would future network investment be made less attractive id this was the case. Apparently, "Moores Law" makes any investment depreciate so rapidly that all progress is futile.
This so obviously is not the case.
By all means, prop them up. (Score:4, Insightful)
Re:Well, yes and no... (Score:5, Insightful)
You realise we're talking about corporations? Businesses. Legal entities. Not humans. They're not war veterans. They deserve no special loyalty simply because they were first or paid 'too much' for their equipment. Do we celebrate and subsidize the construction companies who laid the first interstate highways? Well, maybe, but not for that reason.
The owners and employees who started the telcos and grew them and maintained them have already been amply rewarded - they were paid while they were doing it and they got to see the value of their stocks grow. If they want more money, they have plenty of other options besides being subsidized by the Federal Govt.
Re:Well, yes and no... (Score:3, Insightful)
I admit that I don't know the entire picture, but I know some of it, and the fact is that the government put the Baby Bells into this situation.
How? Well, up until 1996 the telecomm industry was heavily regulated by a mishmash of federal, state, and local laws, the local Public Service Commissions, and Judge Greene. It basically meant that any and all purchasing decisions had to be approved by the PSCs, who didn't understand technology and required the RBOC's to ammortize purchases over extremely long time periods - even when the RBOCs knew that it wasn't viable. The flip side to this is that the PSCs did, by and large, fulfill their obligation to the public by keeping costs down. Mostly.
I don't know that this is what caused the RBOCs to buy equipment with long term bonds, but if it was then damn right the government is on the hook. You can't tell someone they have to buy a long term contract, then ditch them when it doesn't work out. Or maybe you'd like to see that happen. Have a home mortgage at a low interest rate right now? Want the bank to ditch you when interest rates go back up? Didn't think so.
Do we celebrate and subsidize the construction companies who laid the first interstate highways?
Apples and oranges. The interstate highways are public throughfares. They are owned by the state governments. This is not true for the telecomm network - it's owned and operated by corporations. The government licensed them, gave them some right of ways, but did not pay in whole for the network as they did for the interstate highway system. If this had occurred then we'd pay our phone bills directly to the government - what fun that would be. We'd probably be employing the rest of the world to do operator based switching still.
I'm not arguing purely in favor of subsidizing them. What I am saying is that we don't have the full picture here. But, frankly, if you think letting the RBOCs go belly up would be a good thing then you really don't understand economics or how the telecomm system works.
Re:Well, yes and no... (Score:2)
You didn't understand my point. My point was not "The Baby Bells should go away", it was "They should not be subsidized out of a sense of reward or gratefulness." If they are the only thing keeping the infrastructure available, then yes, measures should be taken to keep them going, but not because they spent a lot of money and took risks in the early days.
Re:Well, yes and no... (Score:2)
I don't know that this is true though, but it should be checked before saying that the government isn't responsible.
Re:Well, yes and no... (Score:2)
Don't get me wrong, it's a valid point in its own right, but not at all germaine to what I was saying.
Re:Well, yes and no... (Score:2)
Indonesia.
Signed by Tech Industry Pioneers????? (Score:2, Interesting)
No bailouts (Score:5, Insightful)
Companies with failed business models should be allowed to fail: that is The American Way. This economy depends on the fact that failing companies die, and in their place better/faster companies are born. Just like any other healthy ecosystem, we need a certain amount of "churning" to keep things moving. Stagnation is bad, and will only lead to long-term problems.
The problem with airline failures (Score:5, Insightful)
If you allow unprofitable airlines to fail, there are side effects. Right now, you can get anywhere pretty easily and pretty cheaply. For a while, the regulated airline market had heavily regulated costs that helped keep all costs "reasonable."
The problem with "market forces" is that it ignores externalities. There is an overall economic benefit to having small cities connected to the nation's air travel grid. The nation as a whole benefits, but the airlines are only compensated for some of it.
You can't worship at the altar of market capitalism (and you SHOULD) without understanding and appreciating the problems that externalities create. Figuring out how to internalize externalities, which IS a legit role of the government, is VERY tricky business. The more you internalize externalities, the BETTER the market functions.
Let me give a hypothetical. Airline A services small towns in 10 states connecting them to business centers. The airline agrees to continue service with a $1 billion bailout because the routes are unprofitable. If the routes result in business of $10 billion, and alternatives like video conferencing would only produce $6 billion dollars, than the airlines are worth $4 billion to society. In this case, it's a no brainer, because it will also generate over $1 billion in tax revenues. What if alternatives would develop $9 billion? Society is a wash on the decision, economically, but the bailout might still make sense because of the side effect of making people in those states live better by being able to vacation.
We definitely need churning, but you need to look beyond the sum requested by the company, political ideology, and desire for churning. You need to understand what the full economic consequences are before judging an economic action.
Alex
Re:The problem with airline failures (Score:3, Insightful)
Why can't that $10 billion business afford to pay a little more for airline tickets?
It's really just a choice: who should pay that $1 billion: just those who benefit from it? Or everyone?
Re:The problem with airline failures (Score:2)
But to complicate matters there maybe other alternatives. Let's say that someone develops a jet [eclipseaviation.com] that can carry six people and is as cheap to operate as a luxury car. Then you could start an airline that can go to more places, work on demand, and be more efficient than the current model (i.e. hub-and-spoke and big jets). Plus such an airline could serve many more cities and towns that are currently not covered by the majors. Could it generate more income for everyone? Think of time lost at airports today...
If some of the big dinosaurs died off, there maybe a room for more fast mamals... :-)
Re:No bailouts (Score:3, Insightful)
PS. Unlike criminal law, which is incredibly unforgiving.
Can we add to the letter? (Score:3, Interesting)
1. Reverse Deregulation. Ever since deregulation occoured, our bills (phone, cable, et al) have doubled, and in some cases tripled.
2. Bring webcasting down to a tolerable level. The fees webcasters have to pay are just insane. How about listening to the people instead of just these big businesses who want to squash the small-time communications industry? It does fall under communications, after all...
3. Lay the smack down on the RIAA and MPAA. Please refer to #2. Originally, the two were created to oversee standards. Now they want to limit fair use and basically rule the industry? That's what happens when too much power is allowed to run rampant.
4. Free the Internet, or at least bring it down to a cost-effective level. We're paying entirely too much for something that could help advance all people. Why should the less-fortunate not be able to afford access?
5. This one's personal. Make MTV change it's name. It's not music television anymore, so why not change it to C(rap)TV. And for those who care, I'm not knocking rap. Just the crap (Real World, Road Rules, Jackass especially) that they put on that god forsaken channel...
Yeah, I'm asking alot of an inept Federal juggernaught. But hey, why not at least try, right?
Re:Can we add to the letter? (Score:3, Insightful)
Re:Can we add to the letter? (Score:2, Insightful)
1. Reverse Deregulation. Ever since deregulation occoured, our bills (phone, cable, et al) have doubled, and in some cases tripled.
Yes, but consumers have recieved increased value in a number of ways: 1)The price long distance has come down dramtically. 2)It's hard to argue that the cost of cellphone service is being entirely born by cell phone service users. 3)A lot of phone and cable companies have used increased revenues to establish Internet services.
2. Bring webcasting down to a tolerable level. The fees webcasters have to pay are just insane. How about listening to the people instead of just these big businesses who want to squash the small-time communications industry? It does fall under communications, after all...
You are right, but the solution is market_mechanisims_pricing_copyrighted_material. (See my coment below) Also, communities that grant local monopolies to cable companies should insist that monopoly holders provide public access channels and studio equipment to encourage production of independant/local content to compete with content controled by the RIAA & MPAA.
Lay the smack down on the RIAA and MPAA. Please refer to #2. Originally, the two were created to oversee standards. Now they want to limit fair use and basically rule the industry? That's what happens when too much power is allowed to run rampant.
Pray that the Supremes see the light on Eldred vs
Ashcroft, and send the case back to the lower court with instructions to phase out copyright extensions that have been granted since 1790. Ditto for patent term lengths. In this day of rapid technological change, 50 years seems to long for patent protection.
Free the Internet, or at least bring it down to a cost-effective level. We're paying entirely too much for something that could help advance all people. Why should the less-fortunate not be able to afford access?
I assume you mean deregulate the internet. There is no way to force suppliers to provide goods and services below cost; at least not in the long run. Regulation (with or without subsidies)eventually means higher prices, poorer quality, & reduced supply.
This one's personal. Make MTV change it's name. It's not music television anymore, so why not change it to C(rap)TV. And for those who care, I'm not knocking rap. Just the crap (Real World, Road Rules, Jackass especially) that they put on that god forsaken channel...
does seem personal
Re:Can we add to the letter? (Score:2)
Patents are either 17 or 20 years, I can't remember which.
'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: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:'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?
Moore's Law & Metcalfe's Law defined (Score:5, Informative)
Economics (Score:5, Interesting)
Re:Economics (Score:2)
As you point out, a telco asset is only valuable if it is complete, but if it is complete it is a very valuable asset.
The remaining telcos will buy the bankrupt assets for pennies on the dollar, gaining substantial marketshare and capacity. Since fewer players control more capacity, they can idle the existing capacity and raise prices (or not keep cutting them) to recover from their debt load. They also eliminate future debt by being able to bring on the idle capacity with drastically lower capital expansion costs.
"Bailouts" happen for a few reasons. (1) The misguided populist notion that we won't have phone service, (2) the egos and political capital invested in the current business, and (3) the demands of shareholders, bondholders and other investors who do not want to see their investments become essentially free investment in other businesses.
Short Term Impact (Score:5, Interesting)
This 'Open' letter (Score:3, Interesting)
We need to remember that the internet was designed to be able to communicate with defense authorities during times of national strife, as in nuclear war. It shines because it is nearly impossible to kill all the telco communications capabilities at once. Old, yet trusty technology. Just look what YOU are doing with this technology today!
Where are the Internet pioneers (Score:3, Insightful)
Who are they? Is it reasonable to call someone an "Internet pioneer" even if he or she hasn't (co-)authored an RFC carrying a three-digit number?
Bailout (Score:5, Interesting)
Result: their economy has been stagnant for a decade.
Let's hope the govt. has learned from their mistakes.
Re:Bailout (Score:2)
Traditional telcos aren't going bust (Score:5, Interesting)
It's precisely the next-gen telcos (CLECs, ISPs, xSPs) who invested in the new IP technology that ran into the boom/bust and are struggling or going bust. WorldCom is something of a special case - it had a lot of legacy technology that should have tided it over, but the accounting shenanigans were too much to survive.
This doesn't mean that IP-based networks are a passing fad, though - all that's happened is that the pioneers have gone through the normal bleeding-edge live/die cycle. Some of them have made it, some have gone bust, and all the old-line telcos have adopted the same technologies.
I agree that failing telcos should normally not be propped up - as long as someone can step in to maintain services by buying up their assets, particularly local loops that are hard to recreate, the customer shouldn't notice that much interruption. My problem is with the analysis that the legacy technology is why telcos are going bust.
Security of Internet-based phone system (Score:5, Insightful)
-
Phone hacking, the next generation [counterpane.com]
The problem is that if the telephone system becomes based on the Internet, there will be catastrophic security breaches in our telephone system.This is because every node on the internet can have packets directed at it by any other node. That's the whole point of end-to-end. But that means any joker with a PC can log in to his ISP and start up h4x0r scr1pt5 to start cracking phone switches.
With the current phone system, control signaling is out of band - end users can only control the phones at each end of the connection, and cannot control the functioning of the switches in between. You can command the switches by dialing a number, but you can only route your call this way, not control the basic functioning of the switch.
To a large extent security can be maintained by keeping the telco equipment in securely locked buildings.
But the protocols used for the phone system apparently aren't designed with security in mind, so that when they are adapted to the Internet, they become gaping security holes.
Potentially someone could do some clever work and bring down a whole nation's phone system, if it were on the Internet.
The convergence of the telephone system and the Internet has already been going on for a while. It is quite common for long-distance calls to be routed over the Internet, so you get phone-to-phone VOIP without the user being aware of it.
It is also common for telcos to be ISPs, and they just use the same fiber for voice and data. It's more economical to use the same data formats and protocols for voice as well as data, so they transmit all the voice calls with the Internet Protocol.
Re:Security of Internet-based phone system (Score:3, Informative)
No, I don't work for CISCO or the other companies, just explaing what they sell and why it works.
Who says these routers will be part of the internet, anyway. Its doubtful you'd be able to send packets to one. Hacking REAL SYSTEMS is a lot more difficult than the ignorant public believes it to be, in fact I'd say many true embedded systems cannot be hacked. (if you can't reprogram it because it has no writable memory, how exactly are you going to subvert it?)
Re:Security of Internet-based phone system (Score:3, Interesting)
Dial up modems can have a huge amount of security (dial back and wierd tones pairs come to mind.. hey we use both here!) I can make a dial up system that will keep out any cracker that has even good skills. and this isn't even the computer asking for the password... they cant even get past the modem it's self unless they social engineer enough information to hijack the phone numbers the modem automatically dials-back to. (Only 3 of them.) and then the cracker needs to modify his modem to use a different set of signalling tones.. either by hardware hacking or by social engineering me directly.
or the cracker can tap our private t1's and fiber connections to try and break in...
but only an idiot would put a critical or important system on the internet.... the worries in the parent post are unfounded unless the telcos are staffed with idiots for engineers.
Re:Security of Internet-based phone system (Score:2)
These are only secure if you trust the security of the telephone network. Why do you trust the security of your network to unknown third parties?
Telco crash (Historical) (Score:2)
The nature of the problem was that all the switches were running the same or very close versions of the software, and they all had the same bug. It's a good thing MS isn't making much headway in the server, firewall and router spaces, or we would have lots of problems like this one already. (ok, it's a lame joke really, but not too hard to imagine a real scenario)
Let the Baby Bells compete (Score:4, Interesting)
Why are the Bells forced to lease out their DSL connectivity to other companies at below cost? Does this really spur investment? The reason that most people do not have access to DSL is that the Bells will NOT invest until they are allowed to compete against cable companies DIRECTLY
Do cable companies have to let the telcos use their cable at below cost?
What will happen to the parasites (CLECs) when the hosts (Bells) die?
Deregulate the Bells and let true competition take hold. You will not regret it, Mr. Powell
Re:Let the Baby Bells compete (Score:3, Insightful)
Which sounds all fine and good, except that they're not allowed to charge for infrastructure costs. How much did it cost to upgrade the CO to DSL? To restructure wiring? To perform service upgrades? Doesn't matter, can't charge for it.
The flip side to this is that traditionally the RBOCs have used exactly these costs (and generally inflated them) to prevent competition. To put it bluntly - they fucked other companies for a decade and now they're being punished for it.
Of course, this doesn't help anyone who can't get DSL because it doesn't make economic sense for the RBOC to upgrade. Or the various telecomm supply companies who have seen their contracts evaporate because the RBOCs aren't willing to invest in infrastructure at this point.
Re:Let the Baby Bells compete (Score:2)
The real question is why do YOU believe anything the Baby Bells say? They are not being required to lease lines below their costs. Never have been never will. The original rates were set so the Bells would make a profit. The Bells then cooked the accounting to make it look like they were losing money.
The Bells complain about their unfair treatment under the telecom act of 1996. Bull. They wrote the telecom act of 1996 and they agreed to everything in it before it was passed. The telecom act of 1996 was referred to in the press as the Telecom Welfare Act of 1996. It has many clauses in it that make it nearly impossible for anyone to compete with the Bells on traditional telephone and gives the Bells the opportunity to make huge profits. BUT, the world changed, the Internet happened, and those clauses started to hurt the Bells, so they started crying about it and lying about it and went back on the deal they negotiated.
Go back and look at what was being said in the middle '90s if you don't believe me.
Four years ago I had the experience of trying to explain Moore's law to a Bell executive. He was amazed by it. He was in charge of R&D for SBC and had never heard of Moore's law. He later got fired for destroying Prodigy.
Stonewolf
Telecoms provide a needed service (Score:3, Informative)
Now, in many countries a telco has been forced to provide it's services to all parts of the country, even in sparsely populated areas, to get the telecom license. Now it is possible, with the new technologies, for startup telco replacements to start offering their services in big cities. By offering data connections and VoIP there, they can get all the traditional telco customers to switch to the new services. This may of cource take time, since big companies may have made investments in their own infrastructure and are unwilling to do a forklift upgrade.
But this leads to telecom companies going bankrupt and sparsely populated areas losing all service. A telco can easily make a profit in densely populated areas, but may run to red where there is only one customer every few kilometers.
Pumping money to failing companies is just rewarding badly run businesses, since there was no law that prevented incumbent telecoms from offering these same new technologies to their customers. They would even have been in a better position to do it, since they already had the customer base.
Sooner or later it becomes a problem when something that people need in their normal everyday life is run by market forces. Banks and railroads are good (or bad?) examples.
In fact the situation is even worse. (Score:3, Insightful)
Compare an OC3 from a Bell -vs- an OC3 from a native ethernet provider like Cogent. These are two different worlds of cost.
But hey, let the FCC do what they will, we'll just add it to the list of criminal frauds already commited when it's time to impeach and imprison Bush and his administration.
Re:impeach and imprison your attitude (Score:2, Interesting)
"With ties to"? Dude, I've "got ties to" Worldcom too. The packets in this /. post probably went through a router in uu.net land, after all. (Eeeew-eeeeew.net, I have to wash my modem :) More seriously, I've hung out with some folks in the wild wacky world of financial engineering, and none of us can figure out how any of the techniques employed by Enron could have worked in a free market.
The only reason the California Energy Crisis happened was because of laws that imposed price controls on one side of a transaction ("Thou Shalt Not Sell It For More Than $XYZ") but none on the other side ("You Must Buy At The Spot Rate.")
California's energy markets were akin to a law saying "This is a crime-free neighborhood. Citizens are required by law to leave their doors unlocked at night, burglar alarms and private firearms are banned, and telephone operators are prohibited from answering 911 calls between midnight and 6:00 am".
This doesn't make a thief any less guilty (it takes two to tango!) but a city council passing such an ordinance shouldn't be surprised when the burglary rate rises.
Now, if you wanna get political about it, if Gov. Davis was so sure he was being scammed by "Texas Energy Companies" (in a cheap politicial attempt to smear Bush/Cheney with the Enron brush - because he was deliberately overlooking the California energy companies that were doing the same goddamn thing), then why did he issue tens of billions of bonds to pay for it all?
It turned out he actually was being scammed - but his politicization of the issue cost him any credibility he had on the matter at the time. Nobody outside the extreme left believed him, they thought Davis was just politicking. Those thoughts were reinforced by Davis' actions - in perpetuating the broken partial-deregulation scheme by panicking and saddling the CA taxpayer with assloads of debt.
And if you really wanna get political, I'll even go out on a limb and say "...because there was an election coming up in 2002, and he knew that by shuffling the CA books, he could delay the resulting fiscal disaster until after the polls closed."
You can disregard my political points (opinion), but I think you have to concede the point (factual) about the analogy between CA deregulation, the "burglar-free zoning law", and free markets. The CA situation simply wasn't as simple as you're trying to make it out to be.
Finally - if Bush and Cheney were truly "friends" of Enron and Worldcom, as you speculate, then why are executives of those companies in jail, and their companies in ruins?
The problem.... (Score:2)
This doesn't mean that you should have one group of companies, and then start to die off as you have the next group of companies invest in the next wave of technology. Later, rinse, repeat.
Of course, this doesn't mean that they don't have things to fix. They most certainly do!
I have to wonder... (Score:4, Insightful)
"Please, please, don't bail out Worldcom! We all want to grab a piece of that 50% Internet backbone share for ourselves! Don't bail them out!" ?
It's Called Retirement Through Attrition (Score:5, Insightful)
Government's do not scrap entire fleets when a new technology improves over what is in existance, they strat building new ships and as the older, obsolete ships either sink, are lost in battle, or are too old to maintain they are replaced.
There is some old technology out there, and anyone seeking a bailout on that should be denied. Airlines should be denied bailouts, unless the money is used to go toward improved tech. The $100,000 switch of yesteryear can be replaced with a more relaible $25,000 switch that can handle more traffic, then that is what the money should go for -- improvements.
If their business model is failing, many airlines are in this boat only because of the lessed travel, then they need to adjust..close hubs, discontinue routes, etc. Yes, it would suck for the people that are affected, but what is to stop them from forming a local company to fill the void? It may be too expensive to run a daily flight from Los Angeles to San Francisco for a major airline using a big jet, because there are only 30 people wanting to go each day on average, but a smaller company with a 10 passenger leer could make 3 trips a day, and probably be very profitable.
Government should seek to involve itself in National Defense and Policies, and Proteciton of the Populace -- everything else should be a local matter.
Free markets (Score:4, Interesting)
But economics, psychologists and other liberal arts types realize that human beings defy "nature" all the time. People who study economics essentially study the cases where economics don't work! Psychologists study why people are not rational/utility maximizers.
As far as the broadband/telecom connection goes, did anyone else read this [businessweek.com] article in Business Week?
It talks about how broadband providers are keeping prices artificially high because they would rather deal with slower adoption rates at higher margins than faster adoption at lower margins because THEY KNOW EVERYONE WILL ADOPT BROADBAND EVENTUALLY and they can force us to pay more. Cable broadband profit margins are about 50 percent now.
Makes you realize how much companies like Comcast can prevent high-speed adoption and screw over the telecoms in the process.
(I canceled my Comcast modem and television service last week. Originally, I just wanted to get rid of the television service, but they told me that if I did, they were going to jack up my cable modem price by $15. I told them to cancel everything.)
Re:Free markets (Score:2)
This isn't a observation which I've made. I'm a chemistry PhD student, and have worked in a number of institutions, and have never met a libertarian in the flesh. Only a few scientists that I know have heard of them, and the ones that have generally think that they are a joke (as do I).
However, on Slashdot, everything changes. Maybe it is because the average slashdotter is much more knowledgable on computing than chemistry/physics/biology, or perhaps it has to do with the average age of slashdotters. Or perhaps slashdot simply attracts strange points of view.
A matter of national security (Score:2, Interesting)
How Corruption Works (Score:5, Interesting)
Their goal? Simple. Take tax money out of the government, and get it into their pockets.
Back in the Reagan days, their favorite was the defense industry. It was perfect; there's relative secrecy associated with defense approrpriations, and the military bureaucracy is so intense that it took quite a while for the few people looking to find those $10,000 toilet seats.
We also saw a lot of "foreign aid" disappear into the ether, split up between the corrupt foreign officials and the corrupt local ones, all of it more or less going to Switzerland and Grand Cayman. Still do, actually.
More recently it's been Enron ("privatizing" electric utilities was already absurd, and anyone who followed it the time - including me - called it a blatant invitation to fraud; who knew they'd go all the way to turning off the lights to convince people of a fake shortage! Gives you an idea how little these people fear getting caught), the "airline bailout," the "farm subsidy," and of course, don't forget the "tax breaks."
Now it's a "telecom bailout."
All of these scams netted their perpetrators billions, and in some cases tens or even hundreds of billions. Almost none of the people involved have been investigated, let alone caught. It's the new American mafia, ladies and gentlemen.
Michael Powell is a notoriously corrupt FCC chairman; he's blatantly carried water for both the cable and bell monopolists, and under his watch telecom (and especially internet) service has been abyssmal (remember Northpoint? and what happened to the CLECs?) while prices have risen. It was easy for him, a smug "regulator" in a plum job snagged with handy nepotism; all he had to do was stand back and wink while the bells slaughtered their competition. You don't get a job like FCC chair under a Bush administration without knowing how the game is played... Anyway, this goofy letter to him is pretty amusing; you may as well write a letter to Satan.
Until heads start rolling in quantity (and believe me, once we started, by the time it's over we'd need to build a new federal prison), it's open season.
double standard--one must die (Score:2, Interesting)
The big media companies have done an end-around by purchasing cable companies and denying others media companies access. Now many of them also provide phone service taking away from the phone companies when the phone companies can't compete back! Even AT&T was broken up as only the long distance only arm has used the system against it's former children by buying cable comanies and offering data services over them which compete against the locals while still supporting the ban on locals from carrying long distance directly.
One has to die--Cable or Local Phone--they are now redundant. As far as our rights go we want the phone companies to win due to their common-carrier status. They cannot be censored as easily. (versus the RIAA/MPAA run cable co) This means that rules to open up cable to competition must be pushed thru--and allow Local phone to buy them up as they fail--but still have to offer competition.
why don't we.... (Score:2, Funny)
who said this (Score:2)
USA != capitalism (Score:2)
If broadband is so compelling ... (Score:2, Interesting)
The answer is two-fold -- first of all, a dialup delivers more than my desired quantity of spam and the content-rich sites I desire to see at very low cost.
I think the broadband market is saturated because there is no compelling and inexpensive content to be had via broadband.
Finally, competition is only healthy when there are competitors. If we lose the telecom services then broadband providers can get all the revenue and deliver shoddy service at high prices. I say let's keep telecom companies healthy until they are redundant.
Re:Privatize them! (Score:4, Insightful)
You are trolling, aren't you. In case you don't know about it, go look up Railtrack - the UK privatised rail company that recently declared bankrupcy, leaving the UK govt with the options of a bailout of closing down the rail network. They chose the bailout. The sucessor company (Network rail) is a not-for-profit co.
Re:Privatize them! (Score:5, Insightful)
Riiiight. The streets around your house will look awful funny when only 70% of your neighbours pay their road construction bills. 30% of your street will be dirt road, the rest paved?
I suppose education should be completely privatized too. That way, the only chance a child from a lower economic class has to make something of themselves will be torn away because their parents can only afford to choose two of these three alternatives: 1) feed them 2) clothe them 3) educate them.
I suppose, by your logic, that I should have to pay for my own dedicated wiring from my house to the electricity provider of my choice, right? Would we really have, like, 99% of all houses connected to the electical grid (therefore, accelerating the growth of other technologies like electrical appliances) if distribution was privatized? Would there be any incentive to have a step down station in bumsville, nowhere?
Markets work, u know?
Markets work with quite a bit of help. Do you think they'd work if we didn't have laws regulating fraud, disclosure, etc.?
Re:Privatize them! (Score:2)
My issue is this - why should I have to pay for a substation just because somebody wants to live in bumsville? (I assume you are talking about a substation serving one or two houses located remotely from anybody else - not one serving a slum with 5000 families living in it.)
I submit that if people had to pay to be wired up, they would think twice before building a house out in bumsville in the first place.
In America houses tend to be dispersed all over the place due to cheap transportation. In Europe they tend to be clustered due to high gas costs. In this case, the gas cost is artificially imposed, and I do not agree with this. However, in cases where costs are genuine (such as running 300 kV lines out to the middle of nowhere) I think that people should be given incentive to cut costs. When people are shown the true costs of their activities, they will make choices to make the most efficient use of their resources - saving both them and the provider of those resources money.
Now, if bumsville is the site of gold and oil deposits and it makes sense to build out there, then whoever is doing the building would gladly foot the bill.
A sense of entitlement is dangerous. We should definitely give people opportunities to get out of circumstances that are BEYOND THEIR CONTROL (such as a child born in a poor family), but we have to preserve incentives for people to be innovative and to make wise choices.
Re:Privatize them! (Score:2)
I was responding to the original claim that everything should be privatized. I agree that privatization is good in some cases. However, there IS a reason for public funding of certain infrastructure.
You must admit that public education is better at establishing "a level playing field" than completely privatized education. Do you really think that the child of a wealthy person *deserves*, or has a *right* to a better education than any other child? Do you think it's acceptable that a child could miss out on an education because their parents can't afford it?
We have public funding for things we consider basic rights. We all think everyone has a right to an education, so we constructed systems to give everyone access to those services. We also think everyone should have access to clean water, so we have municipal water utilities. There is room for discussion of these issues, e.g. an American would say that health care is a priviledge, whereas a Canadian would say that access to basic health care is a right. That's why Canada has a universal health care system, and the U.S. does not.
The reasons why we choose to create public services is because of the argument that *everyone* benefits when access is available. To go back to previous examples: if you use public funds to connect everyone to the electrical grid, then you've increased the demand for electrical appliances. If you use public funds to build roads, then you make it easier for all companies and individuals to do business. If you use public funds to educate all children, then more kids will grow up to contribute to your economy, which makes everyone wealthier. So, in the long run, I would suggest that sometimes the private sector is *less* efficient.
Yes, except (Score:2)
I don't think the bailout is a good thing, but I'd point out an analogy.
Do you know why there are so many roads to every little hamlet, town, and farm in the United States? Courtesy of the US Post Office who would deliever mail to your mailbox only if the road was paved.
So there are examples of forced infrastructure upgrades having an economic benefit as a whole, so this is not without precedent.
Not all of Europe. (Score:2)
Stupid companies made stupid promises, and though they never paid a penny for the licences they still demand a bailout from their own completely voluntary promises from a few years ago.
Hopefully, the governments in those countries will just sit back and let the whiners fail. They dug their own hole, and now they get to sit and sulk in it.
Their places will be taken by the more realistic telcos, that didn't promise the princes and half the kingdom for a license and because of that are much better of now.
They can always buy their network from the loudmouth companies when they start to bleed.
This is a great example of how things should work. The people get a network, the smart companies trive and the stupid fail.
A little darwinism for the corps.
It's a sweet irony that the same companies who are now begging for a bailout are the same ones that used to be the strongest opponents to government involvement in the 90's.