4 ms·

The $200 Billion Rip-off: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_002683.html http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_0026... T

by ryoshu 13y ago

The $200 Billion Rip-off: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_002683.html http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_0026... The telcos have already promised to lay fiber, received concessions for it, and delivered little to nothing. Google may start ripping off taxpayers like that, but I'll give them the benefit of the doubt until I see it.

jessaustin 13y ago
I'm sometimes amazed how otherwise competent adults take seriously anything that ATT or VZN say. It takes a tabula that is particularly rasa to just ignore the last three or four decades of behavior from these rascals. It's actually much more likely that they'll orchestrate another "rip-off", except for more money, than that Google will ever do anything even approaching that.
- thenewbtg 13y ago
  I'm sometimes amazed how otherwise competent adults believe that one investor focused for profit corporation isn't capable of behaving just like another investor focused for profit corporation. When I look at Google services, I see a lot of monopolies forming. For example, Hangouts now takes over SMS messages, and is automatically installed on all Android devices as a system app that cannot be removed. Or, in order to interact with Youtube, one requires a wholly unrelated public Google+ profile. For someone to say that Google is incapable of abusing monopolies for strategic reasons including profit, while they are already abusing monopolies for strategic reasons including profit, is amazing to me.
  - jessaustin 13y ago
    You would benefit from a sense of proportion. Come back with this noise when there's a Google line running through my front yard that I'm not allowed to dig up. If you don't like the Android that Google built for you, then don't use it. Google haven't been purchasing laws and agencies since 1937. Ma Bell has.
    - thenewbtg 13y ago
      Hey, step out of the 1980's! I have used telecommunication services for over a decade now, and I have never once done business with AT&T or a Mabell company. Perhaps it's YOU who needs a sense of proportion. It isn't 1984 anymore. Mabell isn't a massive monopoly: Google, however, is becoming one.
      - jessaustin 13y ago
        ...never once done business with... ...Verizon, SBC, CenturyLink, Qwest, FairPoint, Frontier, etc.? Eh, seems unlikely. Or perhaps the extent of your telecom purchasing is cell service from an MVNO? Guess where the majority of your payments are going... Apparently it is difficult for some people outside telecom to separate what's going on from the marketing of what's going on. Don't feel bad: back in the late 1990s I believed the hype too.
      - deleted 13y ago
        [deleted]
rayiner 13y ago
The $200 billion figure doesn't represent real money that changed hands. It's an estimate based on taking the actual profit margin of the telecom companies since deregulation in 1996, and calling everything over 9-10% to be "excess profits." The premise is that telcos "promised" to lay fiber in return for being deregulated, and that if their profit margins had been limited to rates typical of a regulated utility, they would've made a lot less money. Of course, it's easy to play this game with any company. Google's profit margin is over 20%. According to this reasoning, every year Google is "ripping off" the public to the tune of $6 billion. Obviously it's ridiculous to just pick a number as the "right" profit margin for an industry and call everything above that number "excess profits." But that's precisely the premise underlying the $200 billion "rip off." There was no "rip off." The premise of the 1996 reform was that deregulation of the industry would create an incentive for companies to invest private capital. And that has proven true. Over the last two decades, telecom and cable companies have been among those with the highest capital expenditures. What happened is that nobody predicted wireless would become such a big deal. So instead of going into fiber, all that money was invested in wireless instead. That's the major reason why fiber deployment never really materialized--spending that money on wireless made a lot more sense. And from a consumer standpoint, it still mostly does. I don't even have internet service at my house--but I've got two different LTE subscriptions.
- drewcrawford 13y ago
  > According to this reasoning, every year Google is "ripping off" the public to the tune of $6 billion. This comparison is invalid because Google's business is fundamentally different than a telecom in every relevant dimension. Telecoms sell a commodity product with technology they source entirely from third parties, the only form of product differentiation they have is geographical monopoly, and it is a zero-sum game: basically none of AT&T's budget goes to R&D [1], and all of it goes to operating AT&T's existing business exactly as it is now [2]. Meanwhile Google's core business is basically the opposite in every dimension. A much better comparison would be to a water company or power company that has "too high" of a profit margin. And of course people do complain about that. [1] http://www.cnet.com/news/meet-the-group-trying-to-make-at-t-very-un-at-t-like/ http://www.cnet.com/news/meet-the-group-trying-to-make-at-t-... [2] http://www.att.com/Investor/ATT_Annual/2013/downloads/att_2013ar_completefinancialreview.pdf http://www.att.com/Investor/ATT_Annual/2013/downloads/att_20...

by ryoshu 13y ago

jessaustin 13y ago

I'm sometimes amazed how otherwise competent adults take seriously anything that ATT or VZN say. It takes a tabula that is particularly rasa to just ignore the last three or four decades of behavior from these rascals. It's actually much more likely that they'll orchestrate another "rip-off", except for more money, than that Google will ever do anything even approaching that.

thenewbtg 13y ago
I'm sometimes amazed how otherwise competent adults believe that one investor focused for profit corporation isn't capable of behaving just like another investor focused for profit corporation. When I look at Google services, I see a lot of monopolies forming. For example, Hangouts now takes over SMS messages, and is automatically installed on all Android devices as a system app that cannot be removed. Or, in order to interact with Youtube, one requires a wholly unrelated public Google+ profile. For someone to say that Google is incapable of abusing monopolies for strategic reasons including profit, while they are already abusing monopolies for strategic reasons including profit, is amazing to me.
- jessaustin 13y ago
  You would benefit from a sense of proportion. Come back with this noise when there's a Google line running through my front yard that I'm not allowed to dig up. If you don't like the Android that Google built for you, then don't use it. Google haven't been purchasing laws and agencies since 1937. Ma Bell has.
  - thenewbtg 13y ago
    Hey, step out of the 1980's! I have used telecommunication services for over a decade now, and I have never once done business with AT&T or a Mabell company. Perhaps it's YOU who needs a sense of proportion. It isn't 1984 anymore. Mabell isn't a massive monopoly: Google, however, is becoming one.
    - jessaustin 13y ago
      ...never once done business with... ...Verizon, SBC, CenturyLink, Qwest, FairPoint, Frontier, etc.? Eh, seems unlikely. Or perhaps the extent of your telecom purchasing is cell service from an MVNO? Guess where the majority of your payments are going... Apparently it is difficult for some people outside telecom to separate what's going on from the marketing of what's going on. Don't feel bad: back in the late 1990s I believed the hype too.
    - deleted 13y ago
      [deleted]

rayiner 13y ago

The $200 billion figure doesn't represent real money that changed hands. It's an estimate based on taking the actual profit margin of the telecom companies since deregulation in 1996, and calling everything over 9-10% to be "excess profits." The premise is that telcos "promised" to lay fiber in return for being deregulated, and that if their profit margins had been limited to rates typical of a regulated utility, they would've made a lot less money. Of course, it's easy to play this game with any company. Google's profit margin is over 20%. According to this reasoning, every year Google is "ripping off" the public to the tune of $6 billion. Obviously it's ridiculous to just pick a number as the "right" profit margin for an industry and call everything above that number "excess profits." But that's precisely the premise underlying the $200 billion "rip off." There was no "rip off." The premise of the 1996 reform was that deregulation of the industry would create an incentive for companies to invest private capital. And that has proven true. Over the last two decades, telecom and cable companies have been among those with the highest capital expenditures. What happened is that nobody predicted wireless would become such a big deal. So instead of going into fiber, all that money was invested in wireless instead. That's the major reason why fiber deployment never really materialized--spending that money on wireless made a lot more sense. And from a consumer standpoint, it still mostly does. I don't even have internet service at my house--but I've got two different LTE subscriptions.

drewcrawford 13y ago
> According to this reasoning, every year Google is "ripping off" the public to the tune of $6 billion. This comparison is invalid because Google's business is fundamentally different than a telecom in every relevant dimension. Telecoms sell a commodity product with technology they source entirely from third parties, the only form of product differentiation they have is geographical monopoly, and it is a zero-sum game: basically none of AT&T's budget goes to R&D [1], and all of it goes to operating AT&T's existing business exactly as it is now [2]. Meanwhile Google's core business is basically the opposite in every dimension. A much better comparison would be to a water company or power company that has "too high" of a profit margin. And of course people do complain about that. [1] http://www.cnet.com/news/meet-the-group-trying-to-make-at-t-very-un-at-t-like/ http://www.cnet.com/news/meet-the-group-trying-to-make-at-t-... [2] http://www.att.com/Investor/ATT_Annual/2013/downloads/att_2013ar_completefinancialreview.pdf http://www.att.com/Investor/ATT_Annual/2013/downloads/att_20...