On Sun, 9 Aug 1998, Rabid Wombat wrote:
This is how it works in a free-market economy (doh!).
One of the self-appointed/assumed functions of gubbmint is to "fix" this, by granting some organization a monopoly in return for bearing the costs of creating infrastructure, as well as spreading the cost of servicing a (smaller) number of remote customers across a (larger) number of non-remote customers.
Whether this is a good thing(tm) or a bad thing(tm) depends, as usual, on which side of the subsidy you are on.
No, it can still be a bad thing even if I am the beneficiary. The question is whether or not it maximizes efficiency. A stock market crash will benefit the short sellers and owners of puts. But it will also cause a depression, which will still affect the short sellers.
I would argue that such monopolies are desirable, and that their creation is a proper function of a responsible government. When the monopoly is no longer necessary (sufficient economy of scale has been reached to permit a competitive market to adequately service the customer base), then deregulation can occur.
There is a cross-subsidy. The monopoly then pays the government to maintain the monopoly indefinately using government force to drive out competition. Being able to legally imprison or shoot competitors is an advantage that is hard to overcome.
I'm sure some on this list will argue this with me from their mountain cabins in bf-nowhere, but without such monopolies, they'd be sending smoke signals rather than paying $10,000 to get a phone line installed to their home. If you doubt this, look at the heavy reliance on wireless communications in third-world countries, and take a moment to consider how recently the consumer-wireless market arrived on the scene.
Alaska tends to be cold. Should heat and other forms of energy be subsidized, and roads built to wherever I want to place my cabin? Arizona is dry - should they get subsidized water? Why is distance different than any other factor. If I want to live in a remote area, I should bear the costs of the remoteness, just as if I want to live near a river, I will have to bear the costs of flood control or damage from uncontrolled floods. I don't have to live in a mountain cabin, but if I do there will be costs. The largest delay for consumer wireless has been government regulation itself - not allowing efficient use of bandwidth. (I think the first cell phone was 1979). And there was a CB craze, although it had limited range. The big wait was for the FCC to catch up with technology (or for congress to allow them to do so).
Before you argue "the best government is no government", visit a few third-world capitols, and note how you move from a modern capitol city to flintstones-like living in about 50km.
Many third world governments are thoroughly corrupt. Across the border in Mexico they have "Government" - are you saying that Mexico City is better than Wyoming? And the small villages have government even if they don't have technology.
A $.32 price on first-class mail to anywhere in the country is a good deal for all. OTOH, package delivery has become sufficiently competitive, and probably needs to be revamped.
Generally wealthier people can afford to live in the remote areas, and can afford alternatives to first class mail. Poor people rely on first class mail within cities to do much of their business, and that is mainly local. So you have another case of the poor subsidizing the rich.
Just my $.02.
No, your $0.32, soon to be more. --- reply to tzeruch - at - ceddec - dot - com ---