Deregulation increases costs? [cr-95/9/21]


Sender: •••@••.••• (Richard L. Emery)

> With regard to the idea that deregulation and competition in the telecom
> business will be a boon to consumers, I'd like to point out a tiny bit in
> the Santa Rosa Press-Democrat (owned by the NYT) today.  Both Pacific
> Bell and GTE have filed for increases in local telephone rates.  The
> reason they have given to the state PUC is that competition in the local
> call business, which began only a few months ago, has increased their
> costs enough to warrant an increase.
> That isn't exactly what the deregulators promised us.

I fail to see how competition would increase cost of production.  Costs of
advertising, perhaps.  But not production.  Perhaps each's profit margin has
been reduced due to customers being drawn away towards the competitor.  How-
ver to declare an increase in costs?  Ludicrous!  Basic, high school supply-
and-demand economics would prove otherwise.  Let's not fall for the old adage:
"If it's in print, it must be true."

This one snippet certainly weighs lightly against the evidence that
deregulation provides the best choice at the best price for the consumer.

rick emery

 Posted by --  Andrew Oram  --  •••@••.••• --  Cambridge, Mass., USA
                 Moderator:  CYBER-RIGHTS (CPSR)

    World Wide Web:

You are encouraged to forward and cross-post messages and online materials,
pursuant to any contained copyright & redistribution restrictions.