5 ms·

This isn't a subsidy. It's an effort to redirect some of Charter's ~$10B yearly profit[0] toward public benefit, in exchange for allowing further consolidation

This isn't a subsidy. It's an effort to redirect some of Charter's ~$10B yearly profit[0] toward public benefit, in exchange for allowing further consolidation of local monopolies (which would otherwise amplify potential for abuse of market power). [0] https://en.wikipedia.org/wiki/Charter_Communications https://en.wikipedia.org/wiki/Charter_Communications

cryptonector 8y ago
That's a tax (passed on to consumers) and a subsidy by another name though. GP's point is they don't want to pay it. Please debate the finer points of whether or not to have such a policy, but don't say that it's not a subsidy when it clearly is.
- ethbro 8y ago
  By this logic, any company subject to government regulation is taxing its customers. An observation that doesn't particularly enrich the conversation, unless the point you're making is that we should do away with all government regulation of private companies?
  - rayiner 8y ago
    Except that some regulations are more like subsidies than other regulations. Coverage mandates are, in economic terms, almost always a cross subsidy. The regulated company builds uneconomic infrastructure to comply with the mandate, and pays for it by raising prices on everyone else. Regulation is appropriate where there is some market failure or externality you're trying to address. E.g. regulating pollution is economically efficient, because it prevents companies from being able to externalize their costs onto the public. It's not appropriate to use regulation to simply achieve an end result you hope to achieve just because you're unhappy with the market equilibrium. If the end goal really is important, than rather than distort the market for everyone else the government should simply provide the desired service or pay for it directly.
    - ethbro 8y ago
      > It's not appropriate to use regulation to simply achieve an end result you hope to achieve [... If one wants it to happen,] the government should simply provide the desired service or pay for it directly. That's the most libertarian-progressive argument I've ever heard. ;)
  - cryptonector 8y ago
    When the effect of the regulation would be the same as if there was a tax and a subsidy, yes, very much so. If I had to take a position on this one, I'd probably be in favor of it, even though I dislike subsidies in general, for the reasons some others have stated -- though I'd have to think more about it. And I don't think we should assume (as further up) that people who live in rural areas are doing it for subsidies like this. But this regulation is very much a subsidy.
    - ethbro 8y ago
      My point is that all regulations are subidies / taxes, if one wants to be pedantic about it. So is a rural build requirement a subsidy? Sure, but so is a requirement not to use lead paint, or to avoid dumping toxins into waterways, or to use rights of way, or to maintain the ability for the government to tap calls. Consequently, it's disingenuous to argue against this specifically because it's a subsidy. Maybe rural access isn't a social good we want to promote, but it's not different than the massive number of other things we're paying for (vs a completely free market) in the same way.
      - cryptonector 8y ago
        I don't think that's correct. Food safety regulations are not subsidies, for example.
        ethbro 8y ago
        They increase the cost of food, in exchange for the public good of a decrease in the incidence of foodborne illnesses.
rayiner 8y ago
What exactly is the relevance of the $10 billion number? Charter ran large losses every quarter for more than a decade prior to the merger: https://ycharts.com/companies/CHTR/net_income_ttm https://ycharts.com/companies/CHTR/net_income_ttm. Does that affect your view that its recent profit should be "redirect[ed] toward public benefit"? What exactly is the limit to that principle? What other companies should have their profits "redirect[ed] toward the public benefit?" What criteria do you use to decide?
- deleted 8y ago
  [deleted]
- toomuchtodo 8y ago
  Companies that are utilities should be regulated as such. We’re slowly moving towards municipal broadband step by step, so it’ll take some time where we still need to tolerate for-profit last mile ISPs.
  - rayiner 8y ago
    Utility regulation in the U.S. is steeped in New Deal ideas from back when we didn't understand how economics worked. Did you know that in the New Deal era, competition was considered a bad thing, so companies had to get permission from the government before building new infrastructure because it might create competition? There's still tons of that in the Communications Act. For example, 47 U.S.C. 214. What's really telling is that while many in the U.S. want more utility-style regulation, Europe is actively getting away from it. For example, our universal service cross-subsidy system is an antediluvian throwback compared to Sweden (tax credit of about $600 for rural folks to build their own fiber). If you built airplanes the way U.S. municipal entities regulate utilities, government officials would just declare the acceleration of gravity to be 2.5 m/s/s and pat themselves on the back for basically having solved the problem. Not only do municipal-level regulators not really understand the underlying economics of the system, but they don't even realize they're dealing with an economic system. They don't understand that the economy that cannot simply be moved a desired end state by legislative fiat, but rather takes legislation as an input into an economic process that produces an equilibrium state that might include many unintended consequences, and may not include the desired end state at all. This is a problem with regulators generally, but is particularly a problem in the U.S. In Europe, things like telecom regulation are handled at the national level by the most sophisticated regulators and economists. In the U.S., most important telecom decisions are made by generalist municipal bodies, who have little understanding of these issues.
mmirate 8y ago
> redirect What a polite euphemism for "steal".

cryptonector 8y ago

That's a tax (passed on to consumers) and a subsidy by another name though. GP's point is they don't want to pay it. Please debate the finer points of whether or not to have such a policy, but don't say that it's not a subsidy when it clearly is.

ethbro 8y ago
By this logic, any company subject to government regulation is taxing its customers. An observation that doesn't particularly enrich the conversation, unless the point you're making is that we should do away with all government regulation of private companies?
- rayiner 8y ago
  Except that some regulations are more like subsidies than other regulations. Coverage mandates are, in economic terms, almost always a cross subsidy. The regulated company builds uneconomic infrastructure to comply with the mandate, and pays for it by raising prices on everyone else. Regulation is appropriate where there is some market failure or externality you're trying to address. E.g. regulating pollution is economically efficient, because it prevents companies from being able to externalize their costs onto the public. It's not appropriate to use regulation to simply achieve an end result you hope to achieve just because you're unhappy with the market equilibrium. If the end goal really is important, than rather than distort the market for everyone else the government should simply provide the desired service or pay for it directly.
  - ethbro 8y ago
    > It's not appropriate to use regulation to simply achieve an end result you hope to achieve [... If one wants it to happen,] the government should simply provide the desired service or pay for it directly. That's the most libertarian-progressive argument I've ever heard. ;)
- cryptonector 8y ago
  When the effect of the regulation would be the same as if there was a tax and a subsidy, yes, very much so. If I had to take a position on this one, I'd probably be in favor of it, even though I dislike subsidies in general, for the reasons some others have stated -- though I'd have to think more about it. And I don't think we should assume (as further up) that people who live in rural areas are doing it for subsidies like this. But this regulation is very much a subsidy.
  - ethbro 8y ago
    My point is that all regulations are subidies / taxes, if one wants to be pedantic about it. So is a rural build requirement a subsidy? Sure, but so is a requirement not to use lead paint, or to avoid dumping toxins into waterways, or to use rights of way, or to maintain the ability for the government to tap calls. Consequently, it's disingenuous to argue against this specifically because it's a subsidy. Maybe rural access isn't a social good we want to promote, but it's not different than the massive number of other things we're paying for (vs a completely free market) in the same way.
    - cryptonector 8y ago
      I don't think that's correct. Food safety regulations are not subsidies, for example.
      - ethbro 8y ago
        They increase the cost of food, in exchange for the public good of a decrease in the incidence of foodborne illnesses.

rayiner 8y ago

What exactly is the relevance of the $10 billion number? Charter ran large losses every quarter for more than a decade prior to the merger: https://ycharts.com/companies/CHTR/net_income_ttm https://ycharts.com/companies/CHTR/net_income_ttm. Does that affect your view that its recent profit should be "redirect[ed] toward public benefit"? What exactly is the limit to that principle? What other companies should have their profits "redirect[ed] toward the public benefit?" What criteria do you use to decide?

deleted 8y ago
[deleted]
toomuchtodo 8y ago
Companies that are utilities should be regulated as such. We’re slowly moving towards municipal broadband step by step, so it’ll take some time where we still need to tolerate for-profit last mile ISPs.
- rayiner 8y ago
  Utility regulation in the U.S. is steeped in New Deal ideas from back when we didn't understand how economics worked. Did you know that in the New Deal era, competition was considered a bad thing, so companies had to get permission from the government before building new infrastructure because it might create competition? There's still tons of that in the Communications Act. For example, 47 U.S.C. 214. What's really telling is that while many in the U.S. want more utility-style regulation, Europe is actively getting away from it. For example, our universal service cross-subsidy system is an antediluvian throwback compared to Sweden (tax credit of about $600 for rural folks to build their own fiber). If you built airplanes the way U.S. municipal entities regulate utilities, government officials would just declare the acceleration of gravity to be 2.5 m/s/s and pat themselves on the back for basically having solved the problem. Not only do municipal-level regulators not really understand the underlying economics of the system, but they don't even realize they're dealing with an economic system. They don't understand that the economy that cannot simply be moved a desired end state by legislative fiat, but rather takes legislation as an input into an economic process that produces an equilibrium state that might include many unintended consequences, and may not include the desired end state at all. This is a problem with regulators generally, but is particularly a problem in the U.S. In Europe, things like telecom regulation are handled at the national level by the most sophisticated regulators and economists. In the U.S., most important telecom decisions are made by generalist municipal bodies, who have little understanding of these issues.

mmirate 8y ago

> redirect What a polite euphemism for "steal".