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Open Letter to FCC Chairman Powell
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."
Doesn't their existing infrastructure, and social dependency on that infrastructure, give them a somewhat legitimate need for a bailout? If other, smaller, more efficient companies can replace everything the telecom behemoths do, then let the big boys suffer, but is that the case? Can smaller tech savvy companies do everything the large telecoms do or are we talking strictly about broadband internet?
sig.
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.
LETS DECOMPOSE & ENJOY ASSEMBLING
Nahh. Privatize everything. It works.
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.
My Karma: ran over your Dogma
StrawberryFrog
IANAE, but what happens when major telcos start to go under? As they struggle to maintain profit margins, how despirate will they get? Can replacement technologies and companies absorb the workforce that will be laid off? How often will this type of thing happen? Think about it, the current plain old telephone system is no good unless it is ubiquitous. That's why the telcos are in trouble. They needed to put entire systems in place before they where useful. Fiber is fantastic except when it comes down to two little wires in the last mile. In for a penny, in for a pound. Telecommunications systems need to be complete or not at all. How do we get the technoloy in place before it's obsolete?
It seems to me that the long term goal of replacing outdated infrastructure and ancient business models may be reached sooner by this "fail fast" proposal, but the chaos produced would be devastating to customers. Service outages, price fluctuations, and provider changes could cripple customers large and small. The industry that might come out of such a proposal may be worse off for the experience.
-- Minds are like parachutes... they work best when open.
Government subsidies are bad.
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.?
"I have never let my schooling interfere with my education." - Mark Twain
Seems like a self-serving whine by people with a vested interest in the 'failure' of older technology. No matter how carefully worded, I smell money in someone's pockets.
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!
signed by internet [...] pioneers
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?
The recent spate of government bailouts (airline, steel, etc.) reminds me of the S&L scandal in the 80's. I believe Japan had a similar problem as well. Instead of letting some 'creative destruction' take place, as our govt. did, the Japanese bailed the incompetent banks out.
Result: their economy has been stagnant for a decade.
Let's hope the govt. has learned from their mistakes.
If you look at all the telcos of various types, it is the incumbents (RBOCs, Baby Bells, ILECs, PTTs...) who are surviving quite well and even prospering. They didn't get sucked into the IP-based boom/bust as much as others, and more importantly their legacy phone switches make significant money through well-established per-minute billing. Wireless operators who charge per-minute are also doing OK, although 3G will probably kill some of them off.
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.
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Phone hacking, the next generation
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.
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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
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.
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
Telecom companies provide a needed service, a phone is considered a necessary household item, and an Internet connection is becoming that.
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.
It's not just that they got caught buying the wrong equipment, the big telecoms players have specficially resisted IP over ethernet in order to keep entry costs as high as possible. The most ridiculous thing in the world is these suggestions that they had to stick with ATM and Sonet in order to cash in on the huge potential of video conferencing and video on demand and all this utter crap that only seventy year old technophobe shareholders would believe.
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.
It is far more profitable to either kill or join with your competitors, than to compete with them by offering better products at lower prices. This is why a strong government is needed to ensure a working market, based a continues struggle to provide better goods at lower prices than your compatitors.
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.
is that the technology changes TOO FAST. Normal depreciation cycles just don't work well for the way things have been changing. Assets go to zero worth in a very short amount of time. This means a constant investment cycle is needed.
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!
...if some of the (hidden) corporate interest behind this goes something along the lines of:
"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!" ?
Following the Sailing to Steam Power analogy:
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.
Sig? What's a Sig?
The private sector, in the long term, is far more efficient than government services.
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.
"I have never let my schooling interfere with my education." - Mark Twain
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 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.)
For a number of years now, there has been a large effort to take the ownership and management of a lot of the telecom (data comm) infrastructure out of the hands of the federal government. Outsourcing. Unfortunately, because the ability to communicate over this infrastructure has become so important to national security, the federal gov must make sure it remains functioning. Look at some of the postings from a couple of days ago relating to the Navy-Marine Corps Intranet (NMCI). That project relies exclusively on the financial health of EDS, the prime contractor. These "Internet Pioneers" should remember that the federal government IS the internet pioneer and that the only reason most of them have a job to begin with is the fact that Uncle Sam was kind enough to give up most of the direct control of the infrastructure that the internet is based on. Wheew! Glad I got that off my chest....
You have people running big bussiness and people in the federal government. They're all friends. They went to Yale and Harvard and Princeton together... they drank at the same clubs. Their parents were friends, and their kids are going to Taft and Dalton and Exeter together right now.
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.
Want to Know How to Cheat the GPL? Read On!
The existing telecom infrastructure is too slow, and the RBOC's have no interest in upgrading it primarily because it upsets their existing infrastructure and business plan.
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.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
> The primary reason most people advocate capitalism is ETHICAL, not scientific.
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"?
What needs to happen is to remove cable companies from content providing or allow telcos to provide content. That's the real reason DSL is not more popular--all the profit to be made from the upgrade is denied to the local phone companies that have to make the investment. They are still banned from providing content-games, movies, ect... they have to set it up and give it away.
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.
You must be very young and/or naive to think that a bankrupt company simply disappears assets and all. What happens is that the assets are sold off, auction-like, at a fraction of the cost to build them from scratch. For instance, the Iridum satellite phone system went belly up, cost billions to shoot 77 (88?) satellites into orbit, plus spares, ground stations, all that, sold for pennies on the dollar or less, and still running, and now it can stay in business because the initial R&D expense has evaporated and is no longer part of the return on investment equation.
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.
Infuriate left and right
It's simple we should just pass a law that no business can go out of business, then no one will ever lose their job. And then the 40% we hand over to our respective governments can go for something good, like bailing out the company we work for. Wait why don't we all just start our own companies and when it fails the money we paid ourselves for doing nothing, we can give to the government to bail us out. What was I thinking!? Instead of that why don't we just work for the government! It just gets simpler and simpler.
The best way to force a redesign is to throw a monkey wrench in the works.
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)
But are libertarians willing to have the governent break up monopolies and "guilds" of producers that band together to drive everyone else out. Like a certain software maker? Of course, due to the way our "just" court system works the big corporations are very difficult to actually stop with legal means, but the goverment is at least trying.
Perhaps our schools should teach students about corporate bailouts/handouts right before the students learn about capitalism, so that the students grow up realizing that the USA is a SOCIALIST NATION!!!
"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?
Why are cable companies giving away service to compete with dial-up? Why aren't cable providers overloaded with customers?
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.
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.
In some places in Europe (for example Sweden) the licences was handed out for free to those who promised to actually deploy the network the fastest and widest.
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.
"First lesson," Jon said. "Stick them with the pointy end."
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.
You are citing real world examples. That isn't fair.
Objectivists have based their entire philosophy on Ayn Rand's fictional novels, of which The Fountainhead and Atlas Shrugged are just two. This is in contrast to other schools of capitalist, socialist, and even communist thought, which, however flawed they may be, at least have insight enough to cite serious academic studies as the foundation of their ethos and philisophical views.
Does this mean a world view based upon a fictional work is false, or one based upon a scientific or academic study will yield better results? Not necessarilly, any more than we can know with certainty that science will yield a more accurate understanding of the universe than religion (of whatever flavor) will.
However, the vast majority of evidence is that science does yield better practical results than religious dogma, and rigorous academic studies more useful insights than works of fiction.
Having said all that, in Ayn Rand's defense (and I say this despite disagreeing with many of her assumptions and rather myopic views on a number of subjects), she was nowhere near as extreme as many of her adherents.
BTW - When I lived and worked in Germany I made two interesting observations:
1. German taxes were not significantly higher for middle and upper-middle income people there than they are in the United States, despite their having an excellent social net, including a form of socialized medicine (socialized via a strictly regulated insurance industry and policies paid for with public moneys for those who cannot afford the premiums), and
2. The healthcare I was provided there was vastly better than what I have in the United States, despite having one of the better PPOs currently available. The American system appears to be designed to subsidize high-end medical procedures, available generally only to the very wealthy or very well insured (two groups which are quickly becoming synonymous) through vastly higher costs for standard medical procedures (like getting a checkup or an allergy shot).
We in the United States pay three times as much for our less adequate healthcare than the rest of the industrialized world does for the "less effecient" socialized healthcare -- a fact which should put to rest once and for all the myth that the free market is always more effecient than a public works equivelent. In the area of healthcare, where the customer is captive by nature of the fact that without it they will suffer and possibly die, clearly the power of the customer to choose, or reject unacceptable conditions of service vs. the power of the provider to coerce or set their own conditions, is so degraded as to make a "free" marketplace in any meaningful sense impossible. This leaves corporate oligarchies and trusts vs. socialized medicine as the two real choices we face, and the experience of the entire developed world, outside of the united states, indicates that the socialized approach is vastly more effecient and effective.
The Future of Human Evolution: Autonomy
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."
Give me a second to go call the media so the people in this town can get all riled up and come and firebomb your hospital... oh, or what were you saying about treatment?
"Your superior intellect is no match for our puny weapons!"
Was I being unfair to someone? What an interesting debate that would make.
"sarcasm"
Why don't you read what happened under Clinton's FCC and then, when you have any idea what you'd be getting into, come back and drop a line.
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Basically what i'm getting at, is you probably have a better chance of stopping crime if nearly everyone carried a gun. Effectively, you have a 99% of the population as a police force.
No, you have 99% of the population as an untrained armed mob. Would you really feel safer if you knew that every junkie, angry drunk, borderline sufferer of mental illness and road rage perpetrator you met was packing heat? Reducing crime by arming the whole population is like limiting the probability of nuclear war by giving everyone their own atom bomb!
A lot of the problems with the recent Enron and WorldCom, etc. scandals were caused BY government regulation. That is, government regulation that was being written by the very companies it was supposed to control.
Corrupt and biased regulation is far, far worse than no regulation at all. The Bernie Ebbers and Ken Lays of the world may claim to lay their alllegiance at the feet of the free market, but a system where the ground rules are written and rewritten by the biggest players to ensure their own profits is far from a free market.
In theory, government regulation would be fair and impartial to all competitors. But then, in theory communism works too. The real world is quite a bit different.
All movements for social change begin as missions, evolve into businesses, and end up as rackets.
Separate infrastructure from services completely. Let your regional ILEC become an entity that does only one thing...own copper. Thats it. Maybe you wouldn't really have to go that far. If the infrastructure portion was self-sustaining, charging everybody the same fee's whether it was themselves or somebody else; giving everybody the same installation cycles and access their regulatory environment would lessen considerably.
Apocalypse Cancelled, Sorry, No Ticket Refunds
In my "burglary-free zone" analogy - a city council ordering me to leave my door open, disarm myself, and shutting down the 911 phone service - are they blameless when I get robbed?
As I said in my post, it takes two to tango. The criminal (my burglar / Enron) is guilty of his crime, but these are crimes that couldn't have happened without the government as enabler (a law that makes burglary trivially easy / California's partial deregulation scheme that guaranteed the trades profitable.)
To clarify, I never meant that California's partial deregulation was intended to have this effect. Just like my analogy to a "burglary-free zone" law - it was passed because it made folks feel good.
If I pass a law that says I have to buy my lemonade in bulk from people at market rates, but can only sell that lemonade from my own lemonade stand at $0.10 per glass ("Because no child should ever pay more than a dime for a glass of lemonade!"), it doesn't take an economics degree to figure out that I'm gonna wind up broke.
So Enron burns down the lemon grove and charges me $1.00 per glass, which I have to pay, and then I sell the lemonade back to FooCorp - at $0.10 per glass, because I'm prohibited by law from passing my costs on. Foocorp then pours it into another glass and sells that glass to Enron $0.50 (Foocorp makes $0.40). Enron then sells the $0.50 glass to me for $1.00 again (Enron makes $0.50).
In a fully-dregulated lemonade market - world without that stupid law - I could say "No way, Foocorp, lemonade's going for a buck a glass, so take your $0.10 bid and stuff it up your ass! I'll sell it back to you at $1.00 and not a penny less", and the scam collapses. The scam only works if you have a law that obstructs the normal rules of supply and demand in a free market.
Maybe you wouldn't really have to go that far.
They have to be separated. Consider this: I'm Joe Telco Lineman. I've been working for my ILEC for 20 years, I've got another 20 to go, and I like that pension thingy. I've been working in a monopoly environment where I could more or less get it done without any competition or quality control, because hey, what are they gonna do? Go to a competitor? hahahaha....
Then these upstart CLECs come along, and the gawddam government says that we have to share OUR copper with them so that they can take business away from US. Well shit Billy, I don't know about you, but I've got 21 work orders today and 15 of them are OURS and 6 are from those CLEC bastards. Seems to me I'm only likely to have time to get... oh... 15 or so of them done today... Sound about right? Damn straight... We'll get those others done tomorrow. Mebbe the day after that.
If the above scenario doesn't sound likely to you, you haven't talked to enough ILEC telco workers. I've had to deal with a number of them over both voice and data, and had discussions with a few others who didn't know I had anything to do with data or telco and were happy to let their hair down. They OWN the copper the way a mean doberman owns that bone between his paws that you were hoping to get a hold of.
It is insanity to believe that you can have company A owning infrastructure and services, company B owning services, and expect company A to give "the same installation cycles and access" to their competitors. Fortunately for the ILECs, the government has so far been insane.
Ah, a republican AC troll. So pleased you guys still take the time to respond "personally." You're an audacious liar, so much so that it's obvious to me you wont benefit from attention to your little fantasies, so I will keep my responses brief...
Reaganites were notorious cost cutters
Like saying Nazis were notorious for their hygiene. Actually they were notorious deficit spenders; oh yeah, and the Iran/Contra affair was rather notorious too... The only costs they ever cut were in civil rights enforcement. MILSPEC was one way they tried to cover the procurement corruption, laughable, really. The kickbacks, and who profited, even made the news (the "Ill Wind"). Oh yeah, you drink that water, don't you.
The president has no recollection...
Electric utilites were not privatized, they were degregulated
Actually, you're wrong again, moron; even your own propoaganda machine doesn't split that hair... You're really funny - I love that you guys are still trying to find cover on this one - you shut off the lights in California with a fake shortage - and the fact got covered on CNN! Well, the show must go on, I guess. Please, read a summary of a rational position on Calif/Enron. You know, the utility privatization scam is widely documented enough now that almost everyone knows about it... you might want to find another dodge, or just pretend you missed it altogether rather than respond with this drivel.
NorthPoint goes out of business and this is proof that Michael Powell is "notoriosly corrupt".
Yep; since you're obviously ignorant, or hoping we are, I'll give you the executive summary: to the RBOCs, Northpoint was a "competitor" and a "client" at the same time. Like most CLEC's, it was brutally abused via service sabotage, but the deathblow was some clever Verizon fraud. Then the bells made a huge show of pulling the plug on 12 hours notice, creating the most widespread, massive and prolonged (months?) downtime in the history of the commercial internet; millions nationwide were affected, including MSN's customers. The message was loud and clear: Don't deal with CLEC's. You might get shut off. Federal regulators? Off somewhere sending faxes from the beach, approving massive RBOC mergers while counting their bribe money.
You know, Verizon settled Northpoint's fraud claim for 175 million dollars...
So if beef prices rise
Slow down there cowboy. Telecom is regulated; the RBOC's prices and service quality aren't based on how well they wrastle their cows, they're based on how good their oversight is. But of course, you knew that, since your whole point here is just to make disingenuous comments that sound like arguments. I don't have to convince anyone Verizon is outrageously overpriced or offers abysmal service - any professional whose dealt with them knows that... Now that he's overseen the final days of behind the scenes sabotage of TA96, Powell has actually gone on record opposing the CLEC concept... backpedaling on the entire idea of competition in the industry. As I say, notoriously corrupt.
So you seem to believe that the proper role of government officials to pick winners and losers in the marketplace.
Thank you - I could have just accused you of having no idea either what I was saying or how the post-TA96 telecom industry works, but you've made my point better than I ever could.
You don't have any specific allegations of wrongdoing.
Thank you - I could have just accused you of either being senile or blatantly ignoring parts of your screen, but you've made my point better than I ever could.
just gratifying his own political bias
This is conservative dogma 101: Any attack is a partisan attack. Any criticism is a political bias. Unfortunately the facts dramatically point to Satanism. But I'll settle for cronyism and nepotism. And to your ignoring all the evidence in a goofy attempt to paint these clear and egregious failures as something other than grounds for criticism... poitical bias? You're gunning to have your headshot next to the definition, aren't you?
I'm sure you were out there dumping offal on dems and their appointees, too. At least there we have some common ground. It's not that dems wouldn't deserve your hypocritical contempt, just that you usually want to have some better reason for your arguments than drooling-fanboy-sports-team-loyalty.
I am not trying to shut down criticism of Bush
Yeah, right, AC Troll, you're just a freelance righter of wrongs, who gets 100% of their facts wrong and has no idea what they're talking about on any of the issues, but sure is fired up "bigtime" that someone may have disrespected your president and his friends.
Hail to the chief. Hit another one for the gipper, ACTroll! I'm waiting! And you can add why you don't log in - modded down too often?
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