Study Finds Regulation Good For Telecom Customers

jfruhlinger writes "Customers are always better off when government bureaucrats get out of the way and let the market work, right? Well, maybe not in all cases. As described at ITworld.com, a recent study compared the regulatory regimes and telecom environments in various European countries. The study concluded that in countries where regulators had more power to levy fines and punish monopolistic behavior, customers paid less and got more services." From the article: "The report, conducted by Jones Day and Strategy and Policy Consultants Network Ltd., showed that investment in telecommunications, which leads to better services for end users, is lower in countries where there is little competition."

Comments

Linkage

[headkase]

Here's a condensed version of Adam Smith's: An Inquiry Into The Nature And Causes Of The Wealth Of Nations.
And it's still read in Economics 101 BTW.

Re:I knew this years ago

[TubeSteak]

Payphones are dissappearing in a lot of areas. Cell phone use has skyrocketed to such an extent that phone companies are actively removing low-yield payphones.

Try asking a few people for change to make a quick payphone call home, one of them just might say "here, use my cellphone"

http://www.google.com/search?q=payphone+cellphone+ removal
The #1 result is: Save the pay phone - a suddenly endangered species | csmonitor.com

From result #3 (circa Canada 2003)

Both the Companies and TELUS argue that payphone availability has in fact improved over time, when measured by the ratio of payphones to payphone usage.

This not a correct measure of payphone availability. First, it is not the overall number of payphones, but rather the number of payphone locations served, that matters from the perspective of availability.

Re:Slashdot doing downhill

[Dr_Barnowl]

And here's a link to the full text.

Re:I love it!

[Anonymous Coward]

Sure, Sweden is "a pretty small country" (a whooping 53 countries are larger. Sweden is also a country with very low population density (154 countries are more densly populated.

Re:You're kidding, right?

[Money for Nothin']

After 9/11, the airline industry, which isn't regulated,

What??! Does the FAA not exist in your parallel dimension or something?

Re:You're kidding, right?

[Cl1mh4224rd]

Also...

Airline Deregulation Act of 1978

Re:Question:

[strider44]

Market deregulation is good and all until someone wins outright and gains the monopoly then you'll be complaining about the skyrocketing prices and bad service, because, after all, it doesn't take very much when you own a monopoly to change the way you do things to ensure that other people can't compete with you. This happens in every single field, be it manufacturing, phone systems, electricity systems, or (I have to bring this up because after all this is Slashdot) Operating Systems.

Besides this for true market deregulations you cannot regulate safety. In your system aeroplane manufacturers would be continually cutting costs including safety and when a plane carrying a few hundred people falls out of the sky they will just say "whoops, hopefully that won't happen again" and begin cutting safety costs again.

Regulation is around because it is good and protects the consumer. Free market only works to a certain extent because after a certain point instead of improving their product the corperations creating the product start trying to figure out how much money they can grab.

Re:I love it!

[jakethecake]

The deregulation in sweden is a mixed success, on the broadband side of things, things could not be better,
100mbit FiberLan is now 25$-30$ depending on where you live, and 8/12/24Mbit ADSL is 20/40/50$ a month. And one of the two options is available to 80% of the swedish population. Or as some guy said in the 2600 mag a while back, if you are in the warez scene, you either have a server at a university/isp, or know someone in sweden ;)

The Swedish deregulation of the power grid failed, since three large corporations own all of sweden's nuclear powerplants, and the hydroelectric power companies are to small and divided. Prices have risen on average 50-60%, I don't think they are as high as in the states, but a lot higher then before. 0.05-0.1$/kWh is around where it's at now and before the deregulation the price where around 0.02-0.04$/kWh. So now naturally profits have dubbled/trippled for the three corps. that now is in this 'three divided monopoly position'.

We don't know to what make of it, since we have had so many markets that have growned enormously after deregulation, the telecom market with ericsson, and our scandinavian neighbour finland with Nokia, which deregulated about the same time. And the deregulation of the defence industry, sweden now being the biggest per capita exporter of arms in the world -I don't know if that is a success, or a failure. Almost all of the artillery radar units that now is stationed in Iraq is swedish.

Sorry in advance for any borked english ;)

Re:You're kidding, right?

[jfruhlinger]

dude, did you, like, read the rest of the thing I submitted. I was being sarcastic. As the thrust of the story indicates.

jf

Re:Phobia

[rsheridan6]

Folks who talk about deregulation or decriminalization being "dangerous" do so because they fear their neighbors. They project that because some "government" wouldn't be holding a gun to other peoples heads, those people will act in irresponsible and evil ways. It is a very pervasive irrational belief.

On Planet Libertarian, people only want to enrich themselves through the Free Market, which ultimately benefits us all. Meanwhile, back on Planet Earth, the world is full of irresponsible, idiotic, or just plain evil people who are out to do harm to others. Hell yes, I want the government holding a gun to the head of my neighbors keeping them from driving drunk down my street, looting my house, contaminating my water, etc, etc.

It's actually very easy to imagine deregulation. No more excuses that "we were following regulations, so you can't sue us." The airline's insurance company does not want to pay out, neither do passengers want to die. Therefore, they will make efforts to be safe and reliable in order to get more business. It might indeed raise the price of a ticket on a reputable airline, but that price is paid only by those who choose to use that service. No tax-supported bureaucracy, no regulatory overhead. The actual "costs" to "society" are reduced dramatically, and there are more resources available to do something productive.

This is wrong in several ways:

1. You're not describing deregulation - you're describing regulation by the courts. Courts have a non-zero cost, and lawyers are quite expensive. Probably more expensive than the regulators we have now. And what are the courts but a gun to your neighbors head, anyway?
2. There is also a non-zero cost to knowing all of the "good" brands and companies. In your perfect libertarian world, I have to do research to buy a damned toaster if I don't want it to catch on fire and burn my house down, or buy an expensive one. In my imperfect world, I can buy the cheapest toaster at Wal-mart, confident that it meets safety standards.
3. Somebody else's safety choices can affect me. When the apartment below mine caught fire due to faulty wiring, it affected me. If a driver chooses to buy an unsafe vehicle and we have a collision, it's my problem, not his choice. Even in your airplane example, somebody is going to be on the ground when it crashes.
4. It's not always possible to know which businesses are reputable and which ones aren't. A "good" brand could become a "bad" brand if some manager decides he's going to throw away the companies reputation to increase this quarter's profits, and it'll take awhile to figure that out even if you do your homework. It wasn't long ago that Arthur Andersen and Enron were considered reputable.
5. Finally, you're probably lying. People who think like you are generally in favor of tort reform, which would eliminate your idea of regulation by the courts.

Re:Phobia

[Woldry]

Finally, you're probably lying. People who think like you are generally in favor of tort reform, which would eliminate your idea of regulation by the courts.

That's the way to debate the issues! Accuse your opponent of lying about the viewpoints he has expressed, on the basis of viewpoints he has not expressed, but you assume without any evidence that he holds anyway! Then make a huge leap of logic (tort reform = elimination of regulation by the courts ?!?) without making any attempt to connect the points at either end of the leap.

Boy, your rhetorical prowess is just breathtaking. Or maybe just dizzying. Or maybe just dizzy.

Re:You're kidding, right?

[vanyel]

What people seem to forget is that a free market doesn't mean anarchy: if you have anarchy, you don't get competition, you get power struggles doing their best to avoid competition. It's not "regulation" to ensure a fair playing field any more than it's "regulation" to say you can steal from your neighbor. It should also be pointed out that the reason wireless in particular took off in Europe is because of the government monopoly on the land lines. "We're the phone company, we don't have to care" Wireless wasn't subject to the regulation and offered services cheaper and faster. The cost and restrictions on telcom also held up deployment of the internet there, and I'm pretty sure is why you find internet cafes everywhere --- it was the only practical way to get it.

Re:False Headline.

[Bob_Robertson]

Good sir, the telecom market entry price is has been dropping like a stone, ever since it was "deregulated" to some extent. Those areas, such as local telephone service, where government granted monopolies are still the rule rather than the exception is where little to no innovation exists.

If you're actually interested in why the "free market" functions better than a regulated one, you are welcome to read the materials available on the Ludwig von Mises Institute home page.

http://www.mises.org/

It is in fact a mathematical model, a logically provable statement that a free market will be more efficient than a command-based one.

I do find this statement interesting:

As long as there are people who are willing to fuck over other people for their own good, we need regulation.

Good God Why Would You Trust Such People With The Power Of Government? Or does being in government somehow make people saints? By your own words you state that you are concerned about the evil tendencies of others, yet you put into their hands the power to kill you at will. This is irrational.

Bob-