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Wouldn’t it be better to measure $profit per customer. 10% margin doesn’t sound like much, but as you increase costs with anticompetitive measures like having
by donmcronald 6y ago
Wouldn’t it be better to measure $profit per customer. 10% margin doesn’t sound like much, but as you increase costs with anticompetitive measures like having the government sell you exclusive access to infrastructure related resources, that 10% increases in value.
Ex: I’d rather pay $100 to an ISP making 20% margin than $200 to an ISP making 10% margin.
- treis 6y ago>Ex: I’d rather pay $100 to an ISP making 20% margin than $200 to an ISP making 10% margin. But you can't because it costs $180 to provide the service. If it could be provided cheaper they'd keep charging you $200 and pocket the extra profit.
- donmcronald 6y agoIf anticompetitive factors are at play that simultaneously increase costs while reducing competition then removing those means it would be cheaper. Spectrum auctions for mobile or exclusive rights of way for wireline are examples of this. The massive duopoly providers don’t care about the exorbitant cost of those because they just pass it along to the customer who has to accept it because there’s no competition. Those kinds of barriers to entry are a huge benefit to the awful incumbents we have to tolerate.