One of the absolute biggest scams is how the telcos and cable companies have a stranglehold on Internet access.
They charge whatever they want. $46 a month including modem rental? No problem. It costs them a buck to deliver the service and $15 to buy the cable modem.
They make whatever rules they want up about limits on downloads.
Next, they will try to control access to websites based on payments from those websites.
The Internet is a necessity for work and for school. It's very hard to even access some government services without it. But, because of a historical phone monopolies and cable TV monopolies, congress has lined their pockets with donations and allowed this Internet duopoly that is absolutely horrible for consumers.
"It costs them a buck to deliver the service and $15 to buy the cable modem."
It's a thought that you're being screwed over that badly by the man, but you seem to have forgotten that Comcast and At&t are publicly traded companies and you can go look at their numbers any time you want. Upon looking up Comcast's financial highlights, their profit margin is 10.62%. (15+1)*1.1062=$17.70 Sorry, but it costs a lot more to support and deliver that internet that you use, or their numbers would be vastly different. If they're charging you $46, it's costing them 46/(1.1062)= $41.58 to provide it. This is on average, of course. The key is to remember that these are for-profit companies, and it's their duty to their shareholders to make money. In fact, if you call up your bank, you can even be one of those shareholders, and get some of that money back.
North Andover, MA
Of course you're basing this off of bottomline accounting, which is horribly smooted, and certainly obsfucated.
I mean they have $36B of depr fixed assets, but only 163m undepr'd? Wtf is that? They have a $1b non-op Loss, and their SGA exceeds their COGS by $3B! Just assuming those are accounting mechanisms their margin is suddenly 30%. Should it cost $1 of overhead to sell $1 of goods, ESPECIALLY when you're in a duopoly?
Lets take a look at what it costs walmart to sell ACTUAL PHYSICAL GOODS. For every $1 of "everyday low price" goods they sell, it cost them .24. Lets extrapolate that to Comcast. Their SGA by this method should be ~$2. So that adds $9B to their bottom line. Now add back the non-operaing loss, and you have $12.5 billion of profit for 2006. Which is a 50% margin. Now what is their REAL COGS. I mean, they have very little physical product. It's all 1's and 0's. I don't know how they determine that, but it sounds awfully like a software company to me.
Lets take a look at Microsoft. Now their SGA expense would support Comcasts, BUT they actually create things, which they have to pay millionaire engineers to create. Maybe it's a justification for Comcast, I dunno. The point being, that THEIR 1's and 0's cost them .25 cents per $1 of sales. Comcast's 1's and 0's cost them .38 cents per $1. So again, is it overstated.. I don't know, but scaling it back to .25 cents add's ANOTHER $3B o the bottom line. Now you have $15.5B in Net Profit, which is a 62% margin. The point being that Exxon also reports a 10% unadjusted profit margin; you know that's bullshit, and you should know this is too.