Wednesday, November 2, 2011
Sorry for the lack of blog entries. So much to do, despite the general impression that academics lead a cushy life. In the last few weeks I’ve finalized a number of upcoming presentations, articles and teaching materials. I got to serve as a moderator for a high powered panel on Smarter Lives presented at the International Telecommunication Union’s World Telecom Forum even in Geneva; see http://forum.world2011.itu.int/sessions/f07-smarter-lives.
And of course I try to stay on top of current events. Some observations:
In the “it’s all how you frame the matter,” note that Red Box seeks to exploit Netflix’s 60% price increase with a small 20% increase of its own. What two dimes among friends? This from a company that charges 8.9% to count your loose change.
The wireless industry “voluntarily” will offer bill shock prevention through multi-faceted warnings. Would these publicly minded good corporate citizens have been so magnanimous if the FCC had not stated its willingness to step in to remedy market failure?
Where was Verizon’s Wireless’ good corporate citizenship when for several years the company wrongfully took in $52 million from 15 million subscribers who triggered data charges without having a data plan? Bear in mind that had the FCC not intervened subscribers would have had no real avenue for redress, even for many who inadvertently pushed a button quite close to the right one. Verizon could have insisted that each and every subscriber pursue costly and mandatory arbitration. With the inability to join a class action law suit, Verizon subscribers would have lost the entire $52 million to a “job killing” and probably deliberate gouging strategy.
With all the talk about crony capitalism why don’t the Tea and Republican Parties rail against the many instances where incumbents avoided expenses that later market entrants had to pay. Does anyone remember the “wireline set-aside”? At the onset of cellphone service, the FCC tilted the competitive playing field by giving away spectrum to incumbent wireline carriers? Was this necessary to “incentive” investment?