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  1. The ends on U.S. Officially Gives Up On WMD Search In Iraq · · Score: 4, Insightful

    I thought about writing a long list to document where Bush or a member his administration said that we had to go to war with Iraq because of Iraq's weapons of mass destruction. This was about protecting America, right?

    Iraq even allowed the weapons inspectors in to prove they didn't have anything. Remember how the Bush administration mocked the U.N. weapons inspectors whose search turned up nothing? Remember the ultimatum that Bush gave Iraq -- disarm within 72 hours or else? And Fox News gleefully put a countdown clock on the screen? Remember the forged documents--not the ones from CBS; the ones supposedly from Nigeria saying that Iraq tried to acquire fissionable material? Remember the aluminum tubes?

    Remember how reasonable, rational people said there was no proof Iraq had WMDs? Remember how millions of people all over the world protested this war before it started? Remember when scores of diplomats resigned from the U.S. Foreign Service because of these false claims of WMDs? John Brady Kiesling wrote in his resignation letter, "We have not seen such systematic distortion of intelligence, such systematic manipulation of the American people, since the war in Vietnam."

    However, I think I speak for nearly 50% of the country when I say that my head exploded from the incredible sense of "I told you so." I'm not happy to be right -- I'm sad for our country and what it turned into.

    And to all the Conservatives who say, "The weapons of mass destruction may not be found, but hey Iraq is now a peaceful democracy, so it was worth it," I respond with, "The ends do not justify the means."

  2. Re:Car List Please on Gran Turismo 4 JP Launch · · Score: 1

    > No vintage Mustangs?

    They can't have everything. If you're hungry for a vintage Mustang, they have a Mustang Shelby GT350, which looks the same as a '65 Fastback Mustang

  3. Re:Bowtie on CNN Cancels Crossfire · · Score: 1

    > CNN isn't centrist. It leans to the left.

    Anything "leans to the left" when you're looking from that far on the right.

    Washington Times? Fox News? Rush Limbaugh, Sean Hannity, Ann Coulter? Talk radio? All right leaning.

    The mainstream media? CNN, MSNBC, ABC, NBC, CBS, NYT, Washington Post: all painfully center, who try so hard to be "objective" that they don't even report on facts any longer; they just report "both sides" of the story. Not surprising since all these organizations are owned by large corporations who would not wish to anger ~50% of the population by having a political leaning.

    NPR: center, but reports on stories that more intellectual people want to hear.

    If you're looking for left-leaning, take a look at Mother Jones or something like that.

  4. Re:Employee-serfs on Conspiring Against Your Employer? Watch What You Email · · Score: 1

    So, a private entity shouldn't be able to monitor it's property? If I'm company A, and you're sending e-mails when you should be working for me, it is absolutely my right to know that, and to fire your ass for it.

    If you came in my house and sent e-mail on my computer, I'm entitled to read it. It's not your computer it's MINE. Explain how this is different (keep in mind I'm referring ONLY to this case and the emails)


    First, I think it's stupid to use company resources to conspire against the company. But let's talk about a company being to monitor an employee with impunity or even without limitations at all.

    The situation you described is fairly understandable with a sole proprietorship. One person owns the company, so they own all the assets. It gets a little gray when you have a corporation.

    With a corporation with millions of shareholders and thousands of managers of some sort, who owns it?

    Can a shareholder say, "I own one-millionth of that computer, so let me see what you wrote?" Of course not; that's the reason managers are hired.

    Okay, so what if your direct line manager wants to know absolutely all your emails? Okay, that's a little easier. Companies are set up so you have direct managers who report to their manager, who eventually reports to a CEO. So by proxy your manager can look. If you don't like it, leave, right?

    But what if you have two managers? What if you dotted line to multiple people? What if you used to work for one manager and you get transferred to a second?

    Or what about the case where you you have no control over whether you work for a manager? Have you ever worked for a good company, but worked for a poor line manager for a short amount of time? Of course, the easy answer is to leave, but what if you were transferred unexpectedly and you expect to transfer soon? Or you're one year away from your company pension?

    That's where things get really sticky. So having a situation where there are limits to how a company (or its various representatives) can monitor employees isn't crazy after all.
  5. Re:Apple should make up rumors! on Apple Sues Think Secret · · Score: 2, Interesting
    > how do you know they haven't been spreading their own
    > rumours... ;)

    I think they've done this before.

    Back in 1998, rumor sites started talking about a new product Apple was going to launch dubbed "Apple Media Player", with a code name of "Columbus". Eventually mainstream news outlets picked it up. For example, C|Net wrote an article "Apple stakes future on new device".

    Apple Computer (AAPL) is working on portable and TV set-top entertainment devices that offer Internet access and play everything from music CDs to DVD movies, as the company refashions itself for the convergence of consumer electronics and PC technologies.

    The idea was it was supposed to compete with WebTV.

    So everyone went into MacWorld thinking that Apple was going to get into the "set-top box" business. Instead, Apple introduced the iMac.

    Some people thought that Apple allowed the rumors of the "Apple Media Player" themselves in order to distract from the iMac's launch. It was even thought that the name was chosen to suggest that Apple was playing the media.
  6. Re:The funniest headline... on Apple Sues Think Secret · · Score: 2, Insightful

    > I mean, if they really wanted to deal with this more effectively
    > they'd wait until AFTER the 11th.

    I think this is more than squelching a rumor so as to not blow Steve Jobs' "oh, one more thing" that he uses to introduce whatever is the centerpiece of the show. Investors and competitors pay attention to Apple's offerings, too.

    If investors (or potential investors) hear a rumor of a possible Apple product, the price of AAPL can be affected (either positively or negatively). What if the rumor is more interesting than the actual product? Remember when the iPod was about to be announced? People on Slashdot were speculating that Apple was going to deliver nothing short of a perpetual motion machine. When it was a more mundane MP3 player (albeit, the most successful one introduced to date), people were let down. I can imagine even a sell-off of AAPL happening after this. So Apple's job is to protect the price of AAPL, too.

    Also, competitive intelligence is pretty hard, but Apple's competitors must love all these Apple rumor sites, because they do their job for them. Even just getting wind of a product that Apple's planning to build can give them an advantage. They can either shift product plans, or at least not get caught with their jaw on the floor when they see a new Apple innovation (think about people's first reaction to Aqua).

    I like hearing Apple rumors, too, but I realize that Apple has every right to protect their intellectual property.

  7. Re:Only 25 years? on Laser Painting Could Lead to 25-Year Prison Term · · Score: 1

    > Except for the fact that he's an American citizen, while the
    > savages locked away at Gitmo are not.

    What's disturbing is people have been released from Guantanamo Bay, but few (if any) were charged with any crimes. The BBC has a story talking about British citizens who were held for more than two years, but were not charged with any crime when released. That makes one wonder if they was a legal reason why they were held.

    >The US Constitution applies to US Citizens ONLY

    That is true, but holding anyone years (or even forever) for no legal reason and torturing them seems to be against the idea of human beings being endowed by their Creator with certain unalienable rights, such as life, liberty, and the pursuit of happiness. Regardless if they are U.S. citizens or not.

  8. For Free on How Company Employees Use The Web · · Score: 5, Interesting

    I admitted just did a quick glance, but I didn't find their figures to be credible. I looked the company I work for, and it was listed as 100% Windows 2000 and 100% IE6.

    However, we have a mix of Windows 2000, Sun Workstations, Linux machines, and more than a few Macintoshes. Our IT-supported browser is Netscape, not Internet Explorer. So I expected a little more diversity than what they're showing.

    Also, their web site says they provide "company specific marketing information". Technically they are providing "market information" not "marketing information". There is a difference. "Market information" means just raw data (which is what they're providing). "Marketing information" means information that helps you make a decision: Should we avoid Flash because too few users at our site have it enabled? This is probably a nit-pick to many people, but for a company offering their research, the difference is nontrivial. The people whom they are targeting their information (besides people just curious for trivia) likely know the difference.

    However, based on what I saw reported for my company, their data does not seem to accurately reflect what browsers/etc. people are actually using. Thus you could draw incorrect conclusions from their data.

    Maybe that's why the information is free. You get what you pay for.

  9. Correct on Is Your Development Project a Sinking Ship? · · Score: 2, Insightful

    > management tries to replace good ol' fashioned thinking with
    > process

    That's because that's what they teach in business schools. Businesses are about repeatability and consistency. It's good if you can make a cup of coffee. It's great if you can sell a cup of coffee for more than it cost you to make it. If you can make a good cup of coffee and sell it profitably one million times, you have a healthy, sustainable business. Obviously, the third action requires a process.

    That's why sometimes people make a distinction between management and leadership. Management is about incremental cost reductions and process improvement. Leadership is about changing directions and determining new courses of strategy.

    The problem is managers often confuse themselves for leaders and leaders confuse themselves for managers. That's why many start-ups fail: the person who started it had great leadership skills (coming up with a new idea for a product), but poor management skills (taking that product and building a sustainable business out of it).

    Management is always looking for a process. The problem is creative people can feel stifled by the process and poor performers can hide behind it. A good idea is to have a mixture of people (managers and leaders) in different roles so you have elements of strategy combined with repeatability. Obviously to do that you have to have effective teamwork and people that can get along with each other. I think the relative scarcity of all those elements (managers, leaders, teamwork) is the reason why failure is so common.

  10. Re:Oh, Please Let It Be So! on Apple's Rumored Office Suite · · Score: 3, Insightful

    >> The integration between Apple applications and the system
    >> is simply amazing.

    >it is amazing when its Apple but evil when its Microsoft?

    Integration isn't inherently bad. It's can be good or bad depending on how it's done.

    There's a big difference between the way Apple does it and the way Microsoft does it. Often times, Apple does it to make the consumer's life easier and to provide a benefit. Microsoft often does it to bundle applications together so that you only get the benefits if you use all their stuff.

    Case in point: Apple versus Microsoft for personal information management (PIM).

    In this corner, we have Apple!
    email: Apple Mail
    address book: AddressBook
    calendar: iCal

    In the other corner, we have Microsoft.
    email: Entourage
    address book: Entourage
    calendar: Entourage

    Apple uses open standards to store their data. They use an open mbox standard to store messages in Apple Mail. They use vcard to store addresses. They use vcal store calendar stuff.

    Microsoft allows you to export messages, but they're Entourage formatted documents, which can only be opened in Entourage. You can't easily move addresses out of Entourage. For example, in AddressBook, you can drag a group of names out, open the file in a text editor, make changes, save it, and drag the vcard back into AddressBook where it will update the changes. I can drag that vcard to any application and do whatever I want with it.

    On top of that, any application can access the AddressBook's database in order to use contacts. That's cool.

    On the other hand, we have Microsoft's integration. I upgraded to Office 2004, and I would like to use Entourage for email (we're using Outlook for mail at work), but I want to use AddressBook for my contacts (because of its support for Bluetooth phones). Microsoft has tightly integrated their own technologies so I can't switch easily.

    Maybe Apple would do the same if the situation were reversed, but the courts (prior to the Bush administration) already convicted Microsoft of abusing its monopoly and illegally bundling applications for the purpose of locking out competition. Clearly Microsoft has a history of illegally bundling in order to control a market.

  11. Re:eMac on The Ten Worst Products of the Year · · Score: 3, Insightful

    > His reviews mostly made sense except for the eMac rip

    Agreed. If you wanted to play this year's hottest games, first you wouldn't get a Mac anyway.

    If you want to play one of last year's hottest games, like Knights of the Old Republic, you wouldn't pick a $799 eMac (where the "e" stands for "economy", I guess). However, a $1299 iMac or even a $999 iBook could fit the bill (with a bit more memory). Not cheap, but it's nowhere near buying a dual G5 Power Mac with a 30" screen.

    The eMac is more for people like my mother-in-law who just wants to write emails and go to those horrible greeting cards web sites. Calling the eMac one of the 10 worst products of the year because it has a relatively small hard drive or no DVD burner is simply missing the intended market for the product.

    Apples aren't cheap, but they do provide a lot of value (i.e., quality in relation to price). This doesn't mean that it provides the fastest processor for the cheapest price; it means that it delivers the the highest valued attributes for a particular market segment for the price the segment is willing to pay. For example in one of my Marketing classes we studied how the iMac provided the highest price to quality of any product, to the point where Apple could have increased the price by 20% and still maintained sales. By keeping the price point where it was, Apple was able to gain market share. In fact, the two companies that gave the highest value were Apple (with the iMac) and Dell. The lowest were Gateway, Sony, and NEC.

    Maybe PC Magazine was just looking for an obligatory bash against Apple since the iPod is so popular.

  12. Re:Tax Implications? on Employee Stock Options Must be Treated as Expenses · · Score: 1

    > I'm pretty sure that income from stocks, be they employee
    > options or simply purchased, are taxed as income AFTER they
    > are sold.

    I'm not an accountant either.

    My understanding is that options are not taxed when they are granted. However, once they're exercised, they can be taxed in two ways:

    1. If the option is exercised and the resulting shares are sold, either immediately or a year later, then the resulting income is subject to capital gains tax (either at the short term or long-term rate, depending on when they were sold).

    2. If the option is exercised, but the resulting shares are not sold, then the person is possibly subject to the Alternative Minimum Tax (AMT) on the amount the shares are worth at a certain period of time. I believe the any AMT paid is can be applied towards long-term capital gains tax (if due later on), or it can be refunded in some cases.

    The AMT killed a lot of people during the dot-com boom. People would be granted options at say $1 per share. Then the company would declare an initial public offering (IPO), and maybe the shares were sold at $10 per share. Then the shares climbed to $20 per share. You may have to pay AMT at $20 per share if you held the stocks. However, if you sold the shares for $15 (you held too long), then you would get to apply the overpaid AMT in the year you sold.

    However, for many people, the amount they had to pay in AMT was tens of thousands of dollars (or more, in one case I knew of), and it was completely unexpected. The problem came from the fact that AMT is set to an absolute number, and has not been scaled to match inflation.

  13. Re:No *nix? on IT Practice Within Microsoft · · Score: 2, Interesting

    > I don't run anything that competes with Microsoft. My goal is
    > to make sure Microsoft products are the best products in the
    > world. It's an easy choice for me, in that sense--to run
    > Microsoft technology. We don't run Unix. We don't run Linux.
    > We don't run Oracle. We're 100 percent Windows, SQL Server.

    100% Windows? Wow, that must make the Macintosh BU's development efforts pretty hard.

    Although I agree that Microsoft should use their own products wherever possible, the interview with the CIO sounds like it was really written by the marketing department:

    > If I were to leave Microsoft, the first thing I would do is go to
    > Microsoft and say, "I want to be your first and best customer.
    > How do I get all of the products early?"

    That would be the first thing he'd do? Not, "I'm sick of the viruses! I'm ripping your stuff out unless you fix the security flaws in Outlook!"

  14. Re:And anyway on Cell Phones In The Air? · · Score: 2, Informative

    > I'm not sure if this is really true. Currently, cell phones operate
    > totally without any line of sight component in a multipath
    > envirinment (ie, a Rayleigh signal model).
    > I haven't see a a Smith chart for a cell tower antenna in a
    > while, but while the main lobe is basically horizontal, there
    > will be a side lobe pointing up.

    You're correct in that multi-path governs cellular communications, particularly for spread spectrum systems like IS-95 CDMA. However, wouldn't the fact that the device is flying above the skyline with no objects for the signal to bounce off of minimize multi-path effects? It's almost free air space with no obstructions when you're pointed at an airplane.

    The airplane would offer an unobstructed path to the cell site, which could help things, but you'd still have a problem with the main lobe (on the vertical axis) pointing away from the airplane. You'd have to rely on a lobe pointing up or even on the back lobe in the case that the antenna is really tilted (like in an urban environment).

    They've got some Smith charts on Andrew's web site that indicate the problem. I pulled a pattern for what I think is a typical cellular sectored antenna 854DG90VTESX running at ~824 MHz. If the top lobe is pointed at the plane (and there's no multi-path), along the blue vertical axis you're going to get a node 20 dB down from the main lobe. Thus, the line of sight coverage from the base station will be much lower than one would expect, and both the base station and mobile station will have to increase their power levels to make up for the lack of coverage.

  15. Re:And anyway on Cell Phones In The Air? · · Score: 5, Informative

    > Actually, the problem is that it's really easy to get a signal,
    > because you have a clear shot to a crap load of cells at the
    > same time while you are up in the air.

    This is the big problem. If they use the existing cellular infrastructure, this will greatly increase interference and make voice quality even worse than it is today for everybody.

    For existing cell phone towers, any cell phone in the air will be likely above the antenna mid-line. Since most antennas have a down-tilt of around 3-degrees (so they point slightly towards the ground), any coverage above the mid-line will be from one of the normally minimized antenna nodes that point up.

    Antenna manufacturers try to make these nodes small because it's just wasted energy. One would rather have that energy pointed to where the traffic is. So the cell phones that are in the air will have moderate to poor signal strength which will require the cell phone and the base station radio to transmit at their highest power settings. For the base station, that's not too bad, but for the cell phone, you're suddenly going to have this giant source of interference because the phone will be broadcasting at its full power setting from nearly two miles above the surface. Since voice quality is indirectly proportional to the level of the noise floor in an area, cell phones service will get even worse.

    However, the article talks about how they'll mitigate this. Airlines will install very small, low power base stations called "Picocells" aboard the plane. Thus, the cell phone will communicate with this nearby base station, reducing power levels significantly and minimizing the interference effect.

    However, this will do nothing to mitigate the annoyance of listening to the person next to you screaming on their cell phone because they can't hear their voice over the roar of the engine.

  16. Re:Am I missing something? on Pixar's Drawing Tool · · Score: 1

    > Couldn't they just have gotten this guy a nice tablet PC, a copy
    > of Photoshop, and then give him a new layer to go hog wild
    > on? I mean, is this really that revolutionary?

    Bill Gates? Is that you?

    Seriously. The idea is that they can can sketch over a series of CG frames in the movie:

    > The director could draw on an image, and then play it back
    > with the image moving underneath his drawing.

    So when they're playing back the film, they can see the new ghosted sketches on top of it:

    > When Bird put the pen down, the system would automatically
    > record a "snapshot" of what he had drawn. "We also added
    > ghosting so that you could do multiple drawings and see the
    > other drawings as well, though I don't think that got used as
    > much as we would have liked," says Johnson.

    I assume this is used when they're going over the rendered scenes with the animator. To do it in Photoshop would probably require them to grab a single frame and move it into Photoshop, breaking the flow of what they're doing.

    I've never done this before, but I watched the behind the scenes stuff on the Star Wars DVDs when they show Lucas having to pantomime to the artist what he's looking for. This looks like a more efficient way of handling that, particularly for directors with the ability to draw.

  17. Safari test on New Vulnerability Affects All Browsers · · Score: 4, Informative

    I tried the test in Safari 1.2.4 under Mac OS X 10.3.6. I had pop-ups blocked, the normal way I set my browser. Doing the test, I saw the Citibank site fine. When I clicked on the "Consumer Alert" button, it looked like the regular Citibank content. No problem there. I refreshed and clicked on the other "try this test" link, and there still was no problem.

    When I turned off the pop-up blocking feature, then when I tried the test, I did see a pop-up from the Secunia site instead of the Citibank text. Now that's a problem.

    Clearly, this is just another reason to block pop-up windows.

  18. Re:Don't forget on History of the First Internet · · Score: 1

    > What is the mighty moon worm?

    Al Gore did a guest spot in an episode of Futurama called "Crimes of the Hot". In the episode, when Al Gore (as a head a the jar) is introduced to speak about Global Warming, he announces himself by saying, "I have ridden the mighty moon worm!"

    Al Gore's daughter Kristin Gore was a writer for Futurama, so he was on the show a couple of times.

  19. Re:how terrible on History of the First Internet · · Score: 1, Informative

    > i do beleive that the last 3/4ths of posters are "off topic" or
    > "redundant"

    > the 3rd or so post linked to the al gore invented the internet,
    > now there are about 20 more to the same site.

    Redundant doesn't mean simultaneous.

    Look at the time stamps for the posts. They're all about the same time. Clearly people read the line and decided to hit reply. In the time it takes for someone to type a response and hit send, is the difference in when they were posted. Note that the longer responses are posted slightly later.

    I think "redundant" should be left for someone posting a link to Snopes or whatever a half-a-day later. Not for the case where several of people write a similar response at the same time. Particularly in the case where this is fact checking.

    This is no different than if Taco posted an article with the statement, "and as we know the moon is made out of green cheese"; you'd probably have a lot of posts submitted at the same time questioning that. Not redundant, just simultaneous.

  20. Gore did not claim he invented the Internet on History of the First Internet · · Score: 3, Insightful
    Gore never claimed to have "invented" the Internet. In fact, the claim that Gore claimed to have invented the Internet should be on the list for the impressive "Institue".

    What Gore said is that in an 1999 interview with Wolf Blitzer, "During my service in the United States Congress, I took the initiative in creating the Internet." As Al Franken wrote:

    > The phrase "invented the Internet" first appeared in a
    > Republican Party press release and would be repeated by the
    > "liberal" press thousands of times during the campaign.

    Snopes the urban legend debunking website reported on this as well:

    > Claim: Vice-President Al Gore claimed that he "invented" the
    > Internet.
    > Status: False.
    > Origins: No, Al Gore did not claim he "invented" the Internet,
    > nor did he say anything that could reasonably be interpreted
    > that way. The derisive "Al Gore said he 'invented' the Internet"
    > put-downs are misleading distortions of something he said
    > (taken out of context) during an interview with Wolf Blitzer on
    > CNN's "Late Edition" program on 9 March 1999.

    As the Boston Globe [Oct 17,2000] reported:

    Gore did provide early support for the technology - even if he puffed up his role - but computer pioneers can't even agree on exactly what the Internet is, let alone who created it. ... Technical histories of the Internet refer mainly to the technical milestones along the way. Among all the techno-whizzes that get the credit, only one legislator is mentioned - Gore - despite the fact that every stage of the Internet's evolution was funded and directed by federal grants and initiatives.

    Gore was widely credited in histories written long before the vice president's oft-derided comment to CNN reporter Wolf Blitzer that he ''took the initiative in creating the Internet.''

    Gore is credited by the technological cognoscenti for having sponsored legislation that helped launch the expansion of the fledgling Internet to ever-wider uses. As early as 1986, Gore articulated a vision of widespread connected computing. In 1989, he said that ''the creation of this nationwide network ... will create an environment where work stations are common in homes and even small businesses.''

    Two years later, he introduced a followup bill to expand access to the network, saying, ''In the future, I think we will see computers and networks used to teach every subject from kindergarten through grade school.''

    None of these histories comes close to giving him credit for the ''creation'' of the Internet. One account, written by Vinton Cerf (widely known, though he eschews the title, as ''the father of the Internet''), states: ''I think the vice president is very deserving of credit for his active support for the Internet and the businesses that depend on it daily.''

    Cerf, now a vice president at MCI-Worldcom, added that ''his remark was almost certainly a slip of the tongue, because he'd be quite correct to say `I helped create the Internet' - because of his work to provide an environment of support for research, technology transfer and e-commerce initiatives so fundamental to the Internet today.''

    So, if the Republicans were working to trash Gore's reputation, I guess they could say "Mission Accomplished".

    Taco, thanks for proving once again the old proverb, "a lie can make it halfway 'round the world before the truth gets its boots on."
  21. Uhh on Is There Something Wrong with Video Game Reviews? · · Score: 1

    > I WANT TO PLAY WITH MY WIFE *AND* A FEW COMPLETE
    > STRANGERS

    Uh ... you're talking about video games, right? With a computer?

    My wife and I play plenty of games on our Macs and our Playstation 2, but I have to admit, reading your post made me feel a little dirty

  22. re: Understanding HR on EA Reconsiders Overtime Position · · Score: 1

    > HR operates on a set of three principals not unlike those of
    > Asimov's 3 Laws of Robotics.

    That's basically it. I've learned from experience, never assume that the HR person is working in your interest if 1 and 2 are involved.

  23. Re:Well, if not already in there on VOIP Meets Cell Phones · · Score: 1

    > no, they will just prohibit you from running a service like this

    I agree. It probably falls under the heading of "reselling minutes" which is effectively what these guys are doing.

    To me, this is simply exploitation of the unlimited calling plans.

    The idea is that if the cellular service provider can get you to convince friends/family to sign up for the same service by giving you free minutes for intra-carrier calling, they will gain additional revenue. So the companies are using the free minutes to reduce subscriber acquisition fees.

    However, using this system, this company is charging you to game the system. So I wouldn't blame the wireless service providers if they prohibited this.

  24. Re:Wrong economics model on More Fallout From FCC VoIP Decision · · Score: 1

    > An argument based on cost is "bee reasoning", where only the
    > health of the hive, not the individual, matters.

    No, my argument was based purely on economics. I don't know what "bee reasoning" is.

    I didn't tie quality into this because I assumed that the service is providing the quality the users expect. Yes, I made a simplification, but I see no benefit it making the problem a lot more complicated when a simple economic analysis will do. Tying quality to price is a lot harder than it sounds.

    Look at the numbers again. High fixed cost, low variable costs.

    The parameters of the problem state the rich are willing to pay $200 for the service. With the no regulation case, the rich pay $110 each. With the regulation case, the rich pay $101 each. Thus, if the rich are motivated by strictly their own self-interest or even selfishness, even Ayn Rand would have to agree that the regulated example makes more sense for them since they're paying less money.

    The fact that there are social, non-economic benefits to the regulation case (that is, the poor people are getting the 911 service too) is an added bonus.

    Not only is this a case where the average cost is much greater than the marginal cost, but the problem also shows how the fixed costs increases barriers of entry for competitors where this example is not economically suitable for competition.

    Here's an example. Let's say we've got Company A that has 11 customers paying $110 each -- in other words, in the non-regulated case, the break-even point is 10 customers paying $110 each. (So maybe a rich person moved into the neighborhood, but remember the price point is still too high for any of the poor people to want to pay for the service). So with 11 customers, Company A is taking in $1,210 in revenue with $1,110 in costs = $100 in profit. Okay, it's a decent business.

    Now Company B enters the market. They have to outlay $1,000 in the fixed costs just to get started. Let's say that they are able to capture 2 customers. Let's also say that Company B didn't have to provide any price breaks to gain those customers, so they were able to keep the price at $110 (this is very unlikely, but I want to to keep the example simple). So Company B is bringing in $220 in revenue, but their costs are $1000 + 2 x $10 = $1020. So they're making a net loss of -$800; they're losing money, and a lot of it. First question: how long do you think the shareholders would be willing to put up with this loss?

    Moreover, if Company B stole the 2 customers from Company A, Company A has 8 customers left. So now Company A is making only -$200. Both Company A and Company B are losing money.

    Eventually, Company A and Company B will reach an equilibrium of 45% (5 customers) and 55% (6 customers) in market share. But at that level, both Company A and Company B will run out of money since they're at best losing -$400 (for the company with 6 customers). In fact, the only way the two companies can return to profitability is for one to go completely out of business, so the other can have all 11 customers. But if that happens we don't have competition any more, do we? (Some people think this is what's wrong with the airline industry today).

    So competition is actually not the answer for this example either.

  25. Re:So simple people miss it. on More Fallout From FCC VoIP Decision · · Score: 1

    > how do we decide which "practical" solutions should be
    > conducted by the government, and which shouldn't?

    Thanks for the comments.

    You raise a very good question. I'm not sure I know enough to give you a good answer, but I can see some factors to consider.

    Let's make a distinction of things provided by the government (social services, police, etc), versus things just regulated by the government (telecommunications, air travel, etc.) Obviously there's a difference between the city running a police force and the government allowing private companies to operate with a monopoly (or oligopoly) in a regulated environment. So maybe the government shouldn't provide satellite radio services, but should they be allowed to regulate them?

    In terms of regulation, there are other factors in addition to the pure economic criterion I gave (marginal cost being much less than the average cost)

    1. Basic quality of life question. Availability of clean water, disposal of sewage, and even cheap, reliable delivery of mail are required for a 21st century democracy. It's part of the social contract idea, where society (through the auspices of government) agrees to provide benefits to the individuals in exchange for the individuals giving something up (absolute "freedom" or tax dollars). Oftentimes it's not possible to really run a business like this profitably in the long term. So in that case it makes sense to run the operation at cost (i.e., have the government do it)

    2. Scarcity of public resources. A good example of this is the regulation of the public airways. Since the radio spectrum is a scarce resource, it makes sense for a government organization to make sure everyone is playing fair. Does this mean that governments should run radio stations? Probably not, although it's not a bad idea for government to fund stations and let someone else run them (many reports suggest that National Public Radio, which receives some funds from the government, is among the best sources of news)

    3. Issues related to civil liberties. Because of the checks and balances implemented by our Constitution, our government is required to at least pretend like it wants to protect civil liberties. Other entities aren't required to respect such niceties, except in what you can prove in civil court. So having the government run a police force allows some constitutional protections; having a private police force would offer no guarantees.

    That said, I don't think that the government should run satellite television in the same way it should regulate 911 services*. I don't know enough about the industry to know if it makes sense to even regulate them. The number of geostationary orbits may be scarce, so maybe that falls under item 2 above. But one could argue that satellite television has lots of substitute technologies to make that resource's scarcity irrelevant.

    * My understanding is that technically, the government does not run 911 services today. It establishes strict standards and it requires the regional bell operating companies (RBOCs) to implement those standards. So 911 is really regulated by the government and run by private companies (really oligopolies), not really run by it.