Toby DiPasquale on 28 Dec 2008 19:46:14 -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 10:37 PM, Matthew Rosewarne
<> wrote:
> 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.

Actually, in this case, Casey's very close to correct. While the
telco's do have something similar to monopoly power in the market vis
a vis SMS, there is no case in history where large numbers of people
handed over cash for something they didn't want for any extended
period of time. As such, the term "price that the market will bear"
describes this scenario quite well. While I think I speak for all when
I say I wish it was cheaper (and I've known for years that SMSs have a
marginal cost of 0 for the operator), I'm still willing to pay the $10
because the utility I get out of the ability to send and receive SMSs
is worth it to me. Many of my fellow human beings find it to be so as
well, as evidenced by the 110 *BILLION* SMSs that are sent in Japan
alone every day.

An arm-chair understanding of economics is no understanding at all.

Toby DiPasquale
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