sean finney on 28 Dec 2008 19:45:13 -0800

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


On Sun, Dec 28, 2008 at 09:50:04PM +0000, wrote:
> behavior. Government should not be telling ATT to lower text messaging 
> rates just because they can from a financial standpoint. In fact, its only 
> logical that if demand for text messaging is high, then the rates should 
> go up. 

there's two things worth mention:

(1) my take on this is that the government isn't intereseted in "setting 
    a fair rate", but instead protecting the public from a small cartel who
    may be abusing their market position to fix prices[1].  not that i
    expect any results from this effort given the power of telco lobbies.

(2) "supply and demand" is a bit more difficult as a justification when the
    rising demand is against an almost unlimited supply (since the costs to
    scale the system are mostly required already from the increase in 
    normal usage/subscribers).   IANAE[2] but i imagine that the landscape
    would be a bit different if the bar for entry into the market weren't
    so high for potential competition.

On Sun, Dec 28, 2008 at 10:05:30PM -0500, Casey Bralla wrote:
> One of the truisms in modern manufacturing is that we have to lower costs to 
> improve profits, since we generally can't raise prices, since prices are set 
> by the market.
> 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.

this assumes a free market, which is a bit of a stretch here imho.  currently
you have a case were the competition is declining and the remaining players
are very large and possibly acting in an anti-competitive fashion.  also point
(2) above about "supply".


[1] of course depending on your political/economic views you might
    disagree with that too...
[2] i am not an economist

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