Telecommunications and the State

July 1, 2013 § Leave a comment

A while ago I watched a satirical video which called out major telecom companies for their terrible business practices and piss poor customer service. The video was humorous and most average Americans would likely be able to relate to the subject matter. Unfortunately, the video placed all of the blame on the greed of private cable companies. At the time, the fact that the implicit assumptions made by the producers of the video were incredibly off base didn’t bother me much. Admittedly, it did annoy me that a YouTube channel with such a large audience would do such a poor job of checking their information. Regardless, the sad truth is that blaming the free market for the current state of the telecommunications industry is fashionable among just about everyone – even professional academics who should know better.

So at the time, I simply let it go. I’ve seen enough economic misinformation in popular media and press that a simple YouTube video wasn’t enough to push me over the edge. For a while, I pushed the video from my memory and continued on with my life.

Fast forward three months. I’ve just moved into a new apartment and I bought a new modem to replace the loaner modem which Time Warner Cable gives when you first move in. In order to remove the five dollar “rental” fee which Time Warner charges anyone using their loaner modem, I had to drive to the local TWC office and return it. No big deal. It should be easy, right?

Wrong. After driving twenty minutes to the nearest Time Warner Cable office, I opened the door to find a line that tightly weaved its way across every square foot of the building. At first I thought well, maybe the line will move quickly. Nope. There were only three windows open and the line was essentially at a standstill. In short, I found myself in a situation much more typical of the DMV than a private organization.

As I walked out of the building in disgust, modem in hand, I started thinking about that video. How many people in that building were grumbling to themselves about the perils of “corporate greed” or some other nonsense buzzword? How many understand the effects of geographic monopolies? How many of them knew that the current telecommunications market is so heavily distorted by government meddling that it could never be called “free market” by any economist worth their weight in overpriced loaner modems?

Put simply, how many people look at the telecommunications industry as a result of the free market? Perhaps more importantly, how do we go about showing them the truth?

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