 swhx7Premium
join:2006-07-23
Elbonia | reply to major marco
Re: That's A Good One You're basically right. It's important for people to understand the reason.
The estimate is of total benefits to society. But the benefits to the ISPs would be negative: it would cost them more to upgrade than it would bring in revenue. They find it more profitable to increase rates or decrease service (by throttlling, etc.). Building more capacity only makes them more of a commodity, while squeezing customers is cheap and monetizes their monopoly or oligopoly position in each local market.
Thus we have a market failure: a situation where the economically rational course for a company is adverse to the interests of society and its own customers. This can happen only when markets are distorted by anti-market conditions, in this case the local monopolies and oligopolies. |
