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Subject: Degeneration of Capitalism in Internet Access rss

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Kelsey Rinella
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I am proud to have opposed those who describe all who oppose them as "Tender Flowers" and "Special Snowflakes".
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Op-ed: Verizon willfully driving DSL users into the arms of cable

From Ars Technica, normally a pretty reliable source. The op-ed nature makes me somewhat skeptical, but there are all sorts of interesting issues here. Capitalism seems to have degraded pretty seriously in this case: the basic idea is that Verizon Wireless doesn't have a union, but the DSL bits do. Partly because of this and partly because of the very high overage charges on their wireless LTE service, Verizon is making their DSL more costly and less available. This forces users away from their own DSL service because they make so much more money from those who move to their LTE service that it's worth the cost of sending a bunch of customers to their cable competitors.

There are a lot of elements in play here which I know almost nothing about, so mostly this is my attempt to get others to discuss the matter in an interesting and informative manner. I'm particularly interested to know whether people think this seems to count in favor of unions or against them, and the moral issues associated with the high overage costs.
 
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いい竹やぶだ!

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This is RSP. Unions bad. Capitalism good. Obama Commie.
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Mac Mcleod
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You can tell when your physical cable is bad or not installed.

It's harder to tell when they haven't put up enough towers.

My Sprint service varies from AWESOME to CRAP within 500'. They basically have all the major roads and the middle class and wealthy areas covered. Similar for most other phone services. AT&T had the most towers three years ago but they appear to have sold too many phones for them.

Nothing we can do as cell phone subscribers.
 
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Neon Joe, Werewolf He-yump
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RoverGuy wrote:
This is RSP. It is all George Bush's fault. Everything is.


You know, were it not for all the people reminding us about that in every other thread, I might not even notice all the Bush-blaming we still do
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Kelsey Rinella
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LeeDambis wrote:

That being said, the moral is caveat emptor - or due diligence if you prefer the English version. They can't get away with cheating you unless you help.


This seems to rely on a view of consumer/provider relations which is somewhat abstracted away from the real world. When government action promotes an oligopoly partly because the oligopolists have massive influence over legislators through lobbying and campaign contributions, the power dynamic is pretty far from the assumptions inherent in free market economics. Not only are they taking obviously anti-consumer actions like the bundling of landlines with DSL, they've deliberately set up the structure to encourage unintentional overage. I think there are legitimate moral questions about setting up nudges* you know will lead people to do what they want not to do.
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Mac Mcleod
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toku42 wrote:
RoverGuy wrote:
This is RSP. It is all George Bush's fault. Everything is.


You know, were it not for all the people reminding us about that in every other thread, I might not even notice all the Bush-blaming we still do


Well it is Bush's fault that we blame Bush and Obama. He basically pushed blame off by a decade during his term so now an extra decade's worth of blame is piled up here from 2009 to 2019.

My cable TV is down to $10 lifeline service on top of my internet service. Combined cable and internet is $80.

 
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Born To Lose, Live To Win
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RoverGuy wrote:
This is RSP. It is all George Bush's fault. Everything is.


I blame Bush for you posting this. If he wouldn't have screwed up the country so badly we wouldn't have anything to blame him about and there would be no complaints for you to reference.
 
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Exceptio probat regulam
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Communications technology still puts internet and modern wireless networks means one or few providers.

IIRC, in the absence of appropriate regulations, economics theory predicts higher prices and worse service than an ideal "free market" will provide. This is not a failure of capitalism - just an argument for good government.

Add in the providers buying convenient regulations from government, and it's a miracle you're not still on RFC 1149 or RFC 2549.
 
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Mac Mcleod
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LeeDambis wrote:
rinelk wrote:
LeeDambis wrote:

That being said, the moral is caveat emptor - or due diligence if you prefer the English version. They can't get away with cheating you unless you help.


This seems to rely on a view of consumer/provider relations which is somewhat abstracted away from the real world. When government action promotes an oligopoly partly because the oligopolists have massive influence over legislators through lobbying and campaign contributions, the power dynamic is pretty far from the assumptions inherent in free market economics. Not only are they taking obviously anti-consumer actions like the bundling of landlines with DSL, they've deliberately set up the structure to encourage unintentional overage. I think there are legitimate moral questions about setting up nudges* you know will lead people to do what they want not to do.

I'd agree with your overall point that there's a good deal of crony capitalism going on here, but on the specific point of overages you as the consumer can prevent it by monitoring usage. The phones usually have data meters, the providers usually do as well.

This business model has its own eventual failure built in. When enough subscribers pay too many over-cap charges or find their phones shut down due to cap limits, they'll move on to a better provider, stop using their phones as mobile entertainment platforms, or go back to landline at home and the office. Mobile access as a convenience rather than as safety/security is just too expensive for most people anyway.



Sprint has unlimited data.

And is reporting increasing profits.

I use a sprint phone because it has unlimited data. My usage has been under 2gb every month so far.
 
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Chad
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The days of unlimited data for a flat fee are on their way out in America - every single CSP is in the process of figuring out how to do this before 4G really gets going - they simply can't afford it once video access becomes the norm - especially in high concentration markets.

You will start to see the following:

Throttling after a certain amount of GB
pushing data access costs off to the content provided (net-neutral to the customer)
Fixed Data plans with significant promotional opportunities (fill out the survey and get 300Meg for example)

All of this will start to happen in the next 24 months.
 
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You can prove with mathematics that all of these variations of rigged prices are economically "worse":

* Lower total Consumer Surplus + Provider Surplus
* The split (of a smaller pie) shifts in favor of the supplier

As I understand US poleconomy this is entirely fair, so there's no room for complaint ... but it's not economically efficient, and it's not what a genuine "free market" would deliver.

Immoral? Not on the part of the providers, who are behaving rationally in exploiting their customers. Not on the part of Government, if you believe that less Government is better.

Of course if you're an evil socialist, and are against the inevitable use of economic power to move money from consumers to suppliers you might see it differently.
 
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LeeDambis wrote:
gyc365 wrote:
As I understand US poleconomy this is entirely fair, so there's no room for complaint ... but it's not economically efficient, and it's not what a genuine "free market" would deliver.

This isn't necessarily true.
[...]

I agree with the content of your post of course, but ...

... I didn't mean "fair" in any economic sense - fairness is a political concept, not an economic one, hence the use of "poleconomy".


What I don't understand is why so many Americans who claim to believe in the "free market" turn into socialists when they perceive the market is using unfair pricing. A company has every right to turn off existing and function infrastructure (factories, shops, networks) ... unless the "public utility principle" you raised at the end of your post applies, in which case it would be unfair.

If you want the best of both worlds, you have to pay for a potentially expensive and inefficient intermediary to bridge the gap between profit maximization and fairness (as defined by democratically-motivated individuals) ... but with the US political dialog in its current pathetic state, you can say "fair" but never "regulation" /lol. Yet it's naive - companies like monopolies, not free markets, so the freedom of the market has to be defended via "the regulation of Commerce".

Soon I won't be able to understand US English at all - politics is changing the meaning of most of the words
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Mac Mcleod
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Utrecht wrote:
The days of unlimited data for a flat fee are on their way out in America - every single CSP is in the process of figuring out how to do this before 4G really gets going - they simply can't afford it once video access becomes the norm - especially in high concentration markets.

You will start to see the following:

Throttling after a certain amount of GB
pushing data access costs off to the content provided (net-neutral to the customer)
Fixed Data plans with significant promotional opportunities (fill out the survey and get 300Meg for example)

All of this will start to happen in the next 24 months.


And while they are trying to do this, Sprint will be kicking their asses with unlimited data. Seriously- it's stock has doubled since February.

It feels creepy to have limited data and face unknown charges or not know if you might run out of bandwidth before the end of the month. And on top of that Sprint was $20 cheaper than AT&T's limited plan.
And now they have iPhone too.
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