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Bear with me here, but it seems to me like this is a good argument for socialism. Consider: why do termination fees exist? Clearly, as America was being wired

Bear with me here, but it seems to me like this is a good argument for socialism. Consider: why do termination fees exist? Clearly, as America was being wired with telephone service, the cost to run lines to rural areas was prohibitively expensive. So what's the capitalist/Randian thing to do? Well, charge more for phone service out there. If people can't afford it, then they'll move to where it is cheaper to have a phone line, right? Except you have to consider why people would live in these rural areas to begin with. For a large number of individuals, they are probably farmers (or involved in food production). If they have to pay higher rates for phone lines, then they would have to raise the price of food to make living in rural areas viable. But there's obviously a really big incentive to the government and everyone that's not living in rural areas to not have the cost of food increase. So what does America do? To remain somewhat loyal to pristine capitalist ideas, America decides that it's going to let competition and corporate interests resolve the issue, but to make things "fair", the government will put its finger on the scales, just a bit. Unfortunately, when you forget to take your finger off the scales, then you end up with AT&T spending $250mil unnecessarily! Efficiency of the market, eh? Of course, a more socialist-leaning country would've just had the government pay to install rural phone lines.

funkah 15y ago
And a libertarian would count this as yet another instance where government intervention causes problems. To a worm in horseradish, the world is horseradish.
- andylei 15y ago
  i'm no libertarian, and i don't believe that every government intervention causes problems, but i don't understand why you think this is a case where government intervention did not cause problems.
  - burgerbrain 15y ago
    I don't read his comment as actually stating his opinion on the matter, but if we assume he is a libertarian then it sounds like he certainly does think this is a case of government intervention causing problems.
VMG 15y ago
So a government acts socialist, distorts the market, causes damage, and you think this is an argument for more socialism? All starting from the unwarranted assumption that telephone access was necessary to farmers and food prices would have risen dramatically.
- deleted 15y ago
  [deleted]
- burgerbrain 15y ago
  "All starting from the unwarranted assumption that telephone access was necessary to farmers and food prices would have risen dramatically." Yeah, that initial assumption really is weird. How much could a phone line like that possibly cost for a company who does phone lines? I have no idea, maybe 10 million for all I know. But that's a one-time cost that will be spread out over all the crops that farm produces for the next however many years that telephone line lasts. With some (admittedly ~10 years out of date) idea of some of the other costs involved in farming, I have a hard time seeing the bump to food prices being anything to get your undies in a twist about.
  - Dove 15y ago
    Some googling around gets me a cost of $120,000/mile to install overhead telephone wire. So, for example, if you have a tiny town of 200 people that's 15 miles away from anywhere, running a phone line out to it will cost $9,000 per resident. Which sounds steep, but possible to self-fund. On the other hand, if you have one guy on a farm two miles away from the next nearest neighbor, well, adding a phone line costs as much as building a second house. The interesting question for society is, should these people have phone lines? And if they should, how much of the cost should they bear themselves? And how far should we be willing to go to run phone out to increasingly remote areas?
    - bigiain 15y ago
      "The interesting question for society is, should these people have phone lines? And if they should, how much of the cost should they bear themselves? And how far should we be willing to go to run phone out to increasingly remote areas?" Phone lines, or roads, or fire brigades, or police. Or tax collectors… I suspect most farmers would choose to fund their own telecommunication, if it meant they didn't have to pay tax. I'm not quite sure where the line gets drawn about what's reasonable to "expect" the government to provide in return for your tax dollars, and quite how to ensure "fairness" or equality between city-dwellers and rural taxpayers. But deep down I'm a bit of a socialist - I think phones should probably be owned by "the government", or at least regulated so heavily that the decisions about who does and doesn't get phone service is largely driven by ethics and "the greater good" than by "increasing shareholder value".
pat2man 15y ago
This may have been a good idea back in the day but the problem with social policies like this is that they are very hard to change. Now that we have few farmers living out in rural areas and food prices are cheap, us city people are in fact subsidizing the living costs of those living in the country. Its not just phone lines but also streets, post offices, etc. The overall efficiency of city living is much higher but due to policies like this we don't end up getting lower phone bills or pay less for our roads. I don't believe that telecom companies should be completely unregulated but policies like this are an example of socialist policies that can decrease overall efficiency.
seanalltogether 15y ago
I think there has always been a good argument for infrastructural socialism. Infrastructure requires the tricky navigation of public and private property rights. America in it's infinite wisdom decided to go with protected monopolies for providing public utilities (aside from water and roads) and we're constantly exposing the problems inherent in that system.
andylei 15y ago
> there's obviously a really big incentive to the government and everyone that's not living in rural areas to not have the cost of food increase > would've just had the government pay to install rural phone lines you didn't decrease the price of food. you may have decreased the cost paid out of pocket by the consumer, but you haven't changed the actual cost of producing food. if the cost of those phone lines was $100MM, then either a) the government installs those phone lines for $100MM, or b) the farmers bear the cost of those phone lines and raise prices to make up $100MM. either way, someone has to pay that $100MM. you can pay for it either with your taxes or by paying more for food. this socialist scheme never really changed anything, except it distorted the visible prices so that they do not match real costs. now all you've done is made it harder for the market to optimally allocate limited resources.
- bigiain 15y ago
  "this socialist scheme never really changed anything, except it distorted the visible prices so that they do not match real costs. now all you've done is made it harder for the market to optimally allocate limited resources." Unfortunately, "the market" is only going to optimize for the metrics used to evaluate it. When those metrics are almost exclusively "profit" and "shareholder value", the market optimizations aren't always going to align with "societies expectations". Without external pressure, "the market" will optimize for Haliburton being in control of military budgets, investment banking being in control of police departments, and farmers having no phone access.
noonespecial 15y ago
Unfortunately, the cost of the government putting in those lines plus the cost of the inefficiency and corruption attached to government action still need to be paid. Which means the people have less money to buy the cheaper food. Not only is government money not free, it happens to be some of the most expensive and inefficient money available.
- adaml_623 15y ago
  Is this a valid rebuttal of your point? http://www.dailykos.com/story/2012/01/09/1053022/-Medicare-is-still-more-cost-efficient-than-private-insurance http://www.dailykos.com/story/2012/01/09/1053022/-Medicare-i...
  - noonespecial 15y ago
    Its not impossible that with even with all of the inefficiencies associated with government action that its still the best course of action. Things like hydroelectric dams and national interstate systems spring to mind. It should however be the last resort. Its an extremely blunt instrument. Private sector vs government; To quote my favorite author: "Its the difference between using a feather and using a chicken."
  - torontos 15y ago
    not at all... medicare is cheaper than private insurance because hospitals that receive public funds are required to accept it. In that case, private industry (and you and I) are subsidizing medicare. That doesn't equate to well run
olalonde 15y ago
In both cases, American citizens end up paying the bill for those expensive phone lines. In one case, they pay for them through increased food prices and in the other case, through taxes. You still need to make a case as to why paying for the lines through taxes is somehow better then through price increases.

funkah 15y ago

And a libertarian would count this as yet another instance where government intervention causes problems. To a worm in horseradish, the world is horseradish.

andylei 15y ago
i'm no libertarian, and i don't believe that every government intervention causes problems, but i don't understand why you think this is a case where government intervention did not cause problems.
- burgerbrain 15y ago
  I don't read his comment as actually stating his opinion on the matter, but if we assume he is a libertarian then it sounds like he certainly does think this is a case of government intervention causing problems.

VMG 15y ago

So a government acts socialist, distorts the market, causes damage, and you think this is an argument for more socialism? All starting from the unwarranted assumption that telephone access was necessary to farmers and food prices would have risen dramatically.

deleted 15y ago
[deleted]
burgerbrain 15y ago
"All starting from the unwarranted assumption that telephone access was necessary to farmers and food prices would have risen dramatically." Yeah, that initial assumption really is weird. How much could a phone line like that possibly cost for a company who does phone lines? I have no idea, maybe 10 million for all I know. But that's a one-time cost that will be spread out over all the crops that farm produces for the next however many years that telephone line lasts. With some (admittedly ~10 years out of date) idea of some of the other costs involved in farming, I have a hard time seeing the bump to food prices being anything to get your undies in a twist about.
- Dove 15y ago
  Some googling around gets me a cost of $120,000/mile to install overhead telephone wire. So, for example, if you have a tiny town of 200 people that's 15 miles away from anywhere, running a phone line out to it will cost $9,000 per resident. Which sounds steep, but possible to self-fund. On the other hand, if you have one guy on a farm two miles away from the next nearest neighbor, well, adding a phone line costs as much as building a second house. The interesting question for society is, should these people have phone lines? And if they should, how much of the cost should they bear themselves? And how far should we be willing to go to run phone out to increasingly remote areas?
  - bigiain 15y ago
    "The interesting question for society is, should these people have phone lines? And if they should, how much of the cost should they bear themselves? And how far should we be willing to go to run phone out to increasingly remote areas?" Phone lines, or roads, or fire brigades, or police. Or tax collectors… I suspect most farmers would choose to fund their own telecommunication, if it meant they didn't have to pay tax. I'm not quite sure where the line gets drawn about what's reasonable to "expect" the government to provide in return for your tax dollars, and quite how to ensure "fairness" or equality between city-dwellers and rural taxpayers. But deep down I'm a bit of a socialist - I think phones should probably be owned by "the government", or at least regulated so heavily that the decisions about who does and doesn't get phone service is largely driven by ethics and "the greater good" than by "increasing shareholder value".

pat2man 15y ago

This may have been a good idea back in the day but the problem with social policies like this is that they are very hard to change. Now that we have few farmers living out in rural areas and food prices are cheap, us city people are in fact subsidizing the living costs of those living in the country. Its not just phone lines but also streets, post offices, etc. The overall efficiency of city living is much higher but due to policies like this we don't end up getting lower phone bills or pay less for our roads. I don't believe that telecom companies should be completely unregulated but policies like this are an example of socialist policies that can decrease overall efficiency.

seanalltogether 15y ago

I think there has always been a good argument for infrastructural socialism. Infrastructure requires the tricky navigation of public and private property rights. America in it's infinite wisdom decided to go with protected monopolies for providing public utilities (aside from water and roads) and we're constantly exposing the problems inherent in that system.

andylei 15y ago

> there's obviously a really big incentive to the government and everyone that's not living in rural areas to not have the cost of food increase > would've just had the government pay to install rural phone lines you didn't decrease the price of food. you may have decreased the cost paid out of pocket by the consumer, but you haven't changed the actual cost of producing food. if the cost of those phone lines was $100MM, then either a) the government installs those phone lines for $100MM, or b) the farmers bear the cost of those phone lines and raise prices to make up $100MM. either way, someone has to pay that $100MM. you can pay for it either with your taxes or by paying more for food. this socialist scheme never really changed anything, except it distorted the visible prices so that they do not match real costs. now all you've done is made it harder for the market to optimally allocate limited resources.

bigiain 15y ago
"this socialist scheme never really changed anything, except it distorted the visible prices so that they do not match real costs. now all you've done is made it harder for the market to optimally allocate limited resources." Unfortunately, "the market" is only going to optimize for the metrics used to evaluate it. When those metrics are almost exclusively "profit" and "shareholder value", the market optimizations aren't always going to align with "societies expectations". Without external pressure, "the market" will optimize for Haliburton being in control of military budgets, investment banking being in control of police departments, and farmers having no phone access.

noonespecial 15y ago

Unfortunately, the cost of the government putting in those lines plus the cost of the inefficiency and corruption attached to government action still need to be paid. Which means the people have less money to buy the cheaper food. Not only is government money not free, it happens to be some of the most expensive and inefficient money available.

adaml_623 15y ago
Is this a valid rebuttal of your point? http://www.dailykos.com/story/2012/01/09/1053022/-Medicare-is-still-more-cost-efficient-than-private-insurance http://www.dailykos.com/story/2012/01/09/1053022/-Medicare-i...
- noonespecial 15y ago
  Its not impossible that with even with all of the inefficiencies associated with government action that its still the best course of action. Things like hydroelectric dams and national interstate systems spring to mind. It should however be the last resort. Its an extremely blunt instrument. Private sector vs government; To quote my favorite author: "Its the difference between using a feather and using a chicken."
- torontos 15y ago
  not at all... medicare is cheaper than private insurance because hospitals that receive public funds are required to accept it. In that case, private industry (and you and I) are subsidizing medicare. That doesn't equate to well run

olalonde 15y ago

In both cases, American citizens end up paying the bill for those expensive phone lines. In one case, they pay for them through increased food prices and in the other case, through taxes. You still need to make a case as to why paying for the lines through taxes is somehow better then through price increases.