Matthew Rosewarne on 28 Dec 2008 19:38:32 -0800

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Re: [PLUG] [OT] NYTimes article: What Carriers Arent Eager to Tell You About Texting

On Sunday 28 December 2008, Casey Bralla wrote:
> Markets set prices.  Producers either sell at the market price, or don't
> sell at all.   If they can make money at the market price, they will.  If
> there's lots of money to be made at the market price, then lots of people
> will figure out how to enter the market to get some of the big profit.  
> The price of the product is only tangentially related to the cost to
> produce it.
> Texting is expensive because lots of peopel are willing to pay the high
> prices for the right to do so.  (I don't pay it, but that's my choice).  
> If fewer people were willing to pay for the feature, or one supplier
> realizes they can make more money by selling more texting at lower unit
> costs, the price will fall.
> Adam Smith was right.  Nobody's been able to figure out how to overcome the
> laws of supply and demand over the long term, despite lots of very smart
> people trying very hard to do so for 200+ years.

Adam Smith and free-market economics has very little to do with the telecom 
industry.  Rather, the ability of the telecom companies to make a massive 
profit for a relatively small expense has far more to do with their ability to 
use government institutions to stymie competition and subsidise their 
infrastructure costs.

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