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more on more on Competition sends phone rates up
From: David Farber <dave () farber net>
Date: Thu, 13 Apr 2006 19:12:15 -0400
Begin forwarded message: From: Lauren Weinstein <lauren () vortex com> Date: April 13, 2006 6:51:42 PM EDT To: dave () farber net Cc: lauren () vortex com Subject: Re: [IP] more on Competition sends phone rates up Dave, An irony is that while the phone companies are screaming to regulators that VoIP is killing their rate base and the like, hardly anyone bothers to mention that to use VoIP you gotta have a broadband Internet connection, and for most people that's DSL. And where do most folks get their DSL from? Ta dah! The phone company! Much of the competition talk really relates only to all of the gadgets and services, not to the fact that they're mostly being provided by a relatively small (and shrinking) group of very large telecom conglomerates, who are trying to set all of the rules of the game across the board. --Lauren-- Lauren Weinstein lauren () vortex com or lauren () pfir org Tel: +1 (818) 225-2800 http://www.pfir.org/lauren Co-Founder, PFIR - People For Internet Responsibility - http://www.pfir.org Co-Founder, IOIC - International Open Internet Coalition - http://www.ioic.net Moderator, PRIVACY Forum - http://www.vortex.com Member, ACM Committee on Computers and Public Policy Lauren's Blog: http://lauren.vortex.com DayThink: http://daythink.vortex.com - - -
Begin forwarded message: From: "Faulhaber, Gerald" <faulhabe () wharton upenn edu> Date: April 13, 2006 8:26:58 AM EDT To: David Farber <dave () farber net> Subject: RE: [IP] Competition sends phone rates upRosenberg is right, of course. How the original writer could think that a market with a regulator setting prices could be competitive stumps me.The subject "competition sends phone rates up" is silly; it is theregulator that sent phone rates up, as is crystal clear from the story.Unfortunately, the rate increase will cause those customers who are mostprice-sensitive to bail on Verizon and Frontier, thus reducing theirshare. But customers who aren't really paying attention will be sockedwith the increase. My guess is that Verizon will try to targetincreases (if any) to customers who are not price sensitive. As we say,caveat emptor. Professor Gerald Faulhaber Business and Public Policy Dept. Wharton School, University of Pennsylvania Philadelphia, PA 19104 Professor of Law University of Pennsylvania -----Original Message----- From: David Farber [mailto:dave () farber net] Sent: Thursday, April 13, 2006 7:10 AM To: Faulhaber, Gerald Subject: Fwd: [IP] Competition sends phone rates up Begin forwarded message: From: Bob Rosenberg <bob () bobrosenberg phoenix az us> Date: April 12, 2006 11:55:49 PM EDT To: dave () farber net Cc: people () addventure com, 4whp () insightbb com Subject: Re: [IP] Competition sends phone rates up Dave, et. al. Perhaps for IP. This is economic lunacy! The price elasticity demand curve works wellin this market (whether regulated or competitive). Raise prices: Losemarket share. Lower prices: Increase market share. By granting a rate increase in the instant case, the Commission will cause Verizon and Frontier to continue losing customers -- This rate increase will simply accelerate that process. Cordially, Bob Rosenberg P.O. Box 33023 Phoenix, AZ 85067-3023 LandLine: (602)274-3012 Mobile: (602)206-2856 bob () bobrosenberg phoenix az us ********************************************** "Education's purpose is to replace an empty mind with an open one." Malcolm Forbes ********************************************** Begin forwarded message: From: Randall <4whp () insightbb com> Date: April 12, 2006 1:34:53 PM EDT To: dave () farber net Cc: people () addventure com Subject: Re: [IP] Competition sends phone rates up On Wed, 2006-04-12 at 13:29 -0400, David Farber wrote: [Hide Quoted Text] Begin forwarded message: From: Allen Firstenberg <people () addventure com> Date: April 12, 2006 9:53:30 AM EDT To: David Farber <dave () farber net> Subject: Competition sends phone rates up Dave,For IP if you wish. Perhaps someone can explain the economics of this.http://www.pressconnects.com/apps/pbcs.dll/article?AID=/20060412/ BUSINESS/604120325/1002 N.Y. regulators approve telephone rate increase About halfway though, we see this gem of a paragraph: "The commissioners and PSC staff members said the companies need the'flexibility' to raise rates because they're losing customers rapidly to wireless phones, cable companies and other competitors. Verizon has lost3 million customers in the past five years and Frontier has lost 18 percent of its customers in the last three years, according to the commission." Aren't we always promised that competition should lower prices?That's in a free market, which is not what we're dealing with here. This is a regulated utility, which by statute is allowed to recover its costsplus a "reasonable" profit from the ratepayers. Fewer ratepayers, with the same fixed costs, means each ratepayer pays more. (CEO salary is surely part of the "fixed costs", which theever-shrinking number of ratepayers must cover. Betcha he didn't take apay cut ...) ------------------------------------- You are subscribed as lauren () pfir org To manage your subscription, go to http://v2.listbox.com/member/?listname=ipArchives at: http://www.interesting-people.org/archives/interesting- people/
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- more on more on Competition sends phone rates up David Farber (Apr 13)