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TheWiseGuy
Dog And Butterfly
Premium,MVM
join:2002-07-04
East Stroudsburg, PA
kudos:2
Reviews:
·Optimum Online

reply to fifty nine

Re: Covering cost vs profit

said by fifty nine:

I don't see how an item's or a service's actual cost reflects the market price though. With other goods and services thanks to cheap labor overseas they cost very little to make. Yet companies charge a significant sum for them.

Why is that? The answer is profit and shareholders. You can't really fault companies for wanting to make a profit and shareholders for wanting a decent return. It's not always about what's the consumer wants. If the price is too high for something I simply don't buy it. I'm sure if enough people did that the price of a product or service would adjust to where people would be comfortable buying it.

Of course in most products there is a lot of competition. Most products (edit: excluding some luxury products where the name/prestige is an added attraction) do not survive for a long time with a high profit margin unless there are major barriers to providing a similar product which keeps competition at bay.

ISPs tend to be at best oligopolies and in some cases monopolies. Even including wireless there is not a great deal of added competition since two of the major wireless carriers are also major landline ISPs. This is due to several reasons but is why in the past they were regulated in the US and I believe are regulated in Canada.(Forgive me if I am wrong since I do not know a lot about ISPs in Canada)

Due to the high fixed cost nature and the legal barriers to entry there tends to be little competition and therefore the companies can set pricing to maximize profit instead of having to charge at the marginal cost of providing service. This is very different then most products and allows for profits that are well beyond what would give a reasonable return on investment.
--
Warning, If you post nonsense and use misinformation and are here to argue based on those methods, you will be put on ignore.


fifty nine

join:2002-09-25
Sussex, NJ
kudos:2

In many major metropolitan areas you have a choice.

In fact, I live in a rural area and I have three choices:

Cable
DSL
fixed wireless

I have additional choices:
Cellular
Satellite
commercial broadband options (T1 etc)

In a city you may have several choices:
Cable (more than one provider in some cases)
DSL
wireless
telco fiber

The idea that there is no competition really has no basis in reality whatsoever.


mr weather
Premium
join:2002-02-27
Mississauga, ON

said by fifty nine:

The idea that there is no competition really has no basis in reality whatsoever.

It isn't competition when all your alternatives have the same transfer caps and/or charge obscene amounts for overages.

People around here I don't think are averse to paying for broadband. The uproar is the punitive cost which has no basis in reality. Pay five cents for a GB and charge your customer $2? Really? Margins like that would be a businessman's wet dream.
--
"It's all coming down!!" - Mike Holmes

WernerSchutz

join:2009-08-04
Sugar Land, TX

reply to fifty nine

said by fifty nine:

In many major metropolitan areas you have a choice.

In fact, I live in a rural area and I have three choices:

Cable
DSL
fixed wireless

I have additional choices:
Cellular
Satellite
commercial broadband options (T1 etc)

In a city you may have several choices:
Cable (more than one provider in some cases)
DSL
wireless
telco fiber

The idea that there is no competition really has no basis in reality whatsoever.

In your reality, no. In many people's situation, the situation is a lot more limited. Of course, there are those that consider IP over avian carriers to be an option in their desire to defend monopolistic entities.

»www.faqs.org/rfc/rfc2549.txt


Weston

@norampatientcare.com

reply to fifty nine

said by fifty nine:

The idea that there is no competition really has no basis in reality whatsoever.

You really need to educate yourself with the issues in Canada before ranting nonsense. Under the propose UBB the big 4 would control everything (including the retail pricing of other smaller ISPs) and basically place every small ISP in a death kneel..

thecp

join:2004-07-15
Sacramento, CA

reply to fifty nine
Are you kidding me? I live in the capitol of California with millions of people and there's only two real choices here, ATT and Comcast.

Unless if you are rich, or are a business (a medium sized one at the very least), strike commercial broadband options out. Cellular and satellite have terrible latency, pricing, and even more restrictive bandwidth caps.

Telco fiber for the most part are run by companies that are the same ones supplying either your cable or DSL.



Steve B
Premium
join:2004-08-02
Seattle, WA

reply to WernerSchutz

said by WernerSchutz:

said by fifty nine:

In many major metropolitan areas you have a choice.

In fact, I live in a rural area and I have three choices:

Cable
DSL
fixed wireless

I have additional choices:
Cellular
Satellite
commercial broadband options (T1 etc)

In a city you may have several choices:
Cable (more than one provider in some cases)
DSL
wireless
telco fiber

The idea that there is no competition really has no basis in reality whatsoever.

In your reality, no. In many people's situation, the situation is a lot more limited. Of course, there are those that consider IP over avian carriers to be an option in their desire to defend monopolistic entities.

»www.faqs.org/rfc/rfc2549.txt

I agree. Lets not forget either that not everyone can get Satellite because of LoS issues or constant fighting from Homeowners Associations that don't want dishes. For internet, not everyone can get DSL because of distance from the terminal or CO. Wireless broadband is a hit/miss. So yeah, not real viable competition.

TheWiseGuy
Dog And Butterfly
Premium,MVM
join:2002-07-04
East Stroudsburg, PA
kudos:2
Reviews:
·Optimum Online

1 edit

reply to fifty nine
I did not say there was NO competition, I said that it was at best an oligopoly, which allow several alternatives for service. Obviously it also depends on how you define competition. Can you claim Radio is competition to Television and going to a Movie theater is also competition, sure, but the characteristics are so different that really they are not effective competition. Heck you can even claim playing Volleyball is competition to Internet since they are both entertainment mediums.

The characteristics of many of those Internet services are very different and to provide high speed, always on, high bandwidth broadband in most areas, there really are only 2 good alternative technologies at this point, telecom/cable, at some point cellular may be able to compete. A T1 while it does provide high speed internet really is not designed for in home users, it is a business service.

Edit: In many ways what the ISPs are trying to do with caps could be considered price gouging except it is not short term in nature.

»en.wikipedia.org/wiki/Price_gouging

--
Warning, If you post nonsense and use misinformation and are here to argue based on those methods, you will be put on ignore.



jazzlady

join:2005-08-04
Tannersville, PA

reply to fifty nine

said by fifty nine:

In many major metropolitan areas you have a choice.

In fact, I live in a rural area and I have three choices:

Cable
DSL
fixed wireless

I have additional choices:
Cellular
Satellite
commercial broadband options (T1 etc)

In a city you may have several choices:
Cable (more than one provider in some cases)
DSL
wireless
telco fiber

The idea that there is no competition really has no basis in reality whatsoever.

The US is what- 25th in the world in broadband now?

In my area it's cable, or DSL. Do you consider 1.5 Mbps DSL a viable "choice"? I consider it an overpriced joke. Yesterday's technology at tomorrow's prices.

Satellite not an option for most due to LoS problems, speed, and exorbitant pricing. And cellular, well I just have to laugh at that. What is their cap?

The truth is, this country needs real broadband availability if we want to stay competitive. As it stands, broadband is just a money well for a handful of companies, and they just keep drawing.

Media content should be separate from internet, because the cableco's have a vested interest in preventing you the customer from exercising your choices to legally view media some way other than their overpriced services.

The government needs to regulate broadband just like any other utility, or the customers will continue to get less and less for more and more money. The rate-rape will never end if they aren't stopped.

This is just like those shrinking products in the supermarket. Anybody remember when a 1/2 gallon of ice cream really used to be 64 oz?


TechieZero
Tools Are Using Me
Premium
join:2002-01-25
Gibsonton, FL

Broadband is not a "utility" nor should it be considered as such.



jazzlady

join:2005-08-04
Tannersville, PA

said by TechieZero:

Broadband is not a "utility" nor should it be considered as such.

Is telephone (land line) service a "utility"?

If so, why? You don't really need a phone.


jazzlady

join:2005-08-04
Tannersville, PA

reply to WernerSchutz

said by WernerSchutz:

said by fifty nine:

The idea that there is no competition really has no basis in reality whatsoever.

In your reality, no. In many people's situation, the situation is a lot more limited. Of course, there are those that consider IP over avian carriers to be an option in their desire to defend monopolistic entities.

LMAO...

That was a good one... LOL


trainwreck6

join:2010-09-21
off track

reply to TechieZero
You don't need water either. Go buy bottled! Lots of it!

Then, stick a heater in your tub if you need some hot



jazzlady

join:2005-08-04
Tannersville, PA

said by trainwreck6:

You don't need water either. Go buy bottled! Lots of it!

Then, stick a heater in your tub if you need some hot

LOL

You do realize, that there are people in this country who would respond with "what's a tub"? ROTF


TechieZero
Tools Are Using Me
Premium
join:2002-01-25
Gibsonton, FL
Reviews:
·Verizon FiOS

reply to trainwreck6

said by trainwreck6:

You don't need water either. Go buy bottled! Lots of it!

Then, stick a heater in your tub if you need some hot

You need water it doesn't have to be heated.


Twaddle

@sbcglobal.net

reply to fifty nine
I live in a rather large urban region, technically savvy population and I have the following choices.
1. Piss-poor DSL at about 65.00 a month if you bundle it with phone service
2. single Cable company which raises rate 2 -4 times a year while dropping services/offerings continually. All due to a govt imposed monopoly
3.NO FTTH-we just got fiber to the node but the last mile copper is in such sad shape that unless you are within 800 ft of the node its a crapshoot. Luckily I do have good performance for the most part but it does have its moments....

4. non-terrestrial broadband a la Hughes- another expensive and poor offering.
What I'm trying to say is that the lack of real competition has kept the delivery of Internet services poor and the cost high especially after one uses up the teaser rate offerings.
Lets not go with the argument that Internet service is a luxury. Today it may be considered a questionable luxury to the private citizen but to most legitimate business, no internet means a slow but death sentence
They said that the telephone, indoor plumbing, electricity as well as other new-fangled inventions were luxuries but time and progress has changed their status and time and progress will also change Internet access as well. I just hope I cam afford the service until then.



jazzlady

join:2005-08-04
Tannersville, PA

reply to TechieZero

said by TechieZero:

said by trainwreck6:

You don't need water either. Go buy bottled! Lots of it!

Then, stick a heater in your tub if you need some hot

You need water it doesn't have to be heated.

Well, using your logic, one doesn't need heat, or a house either. One could sleep in a tent in the woods, or a car for that matter.

There doesn't need to be food in the supermarket either. Is food a right, or a privilege? One can forage in the woods for what they need.

We could go on like this, but it's getting downright ridiculous. This isn't the 19th century...


TechieZero
Tools Are Using Me
Premium
join:2002-01-25
Gibsonton, FL
Reviews:
·Verizon FiOS

said by jazzlady:

said by TechieZero:

said by trainwreck6:

You don't need water either. Go buy bottled! Lots of it!

Then, stick a heater in your tub if you need some hot

You need water it doesn't have to be heated.

Well, using your logic, one doesn't need heat, or a house either. One could sleep in a tent in the woods, or a car for that matter.

There doesn't need to be food in the supermarket either. Is food a right, or a privilege? One can forage in the woods for what they need.

We could go on like this, but it's getting downright ridiculous. This isn't the 19th century...

We could but we aren't talking about housing, food, transportation or whatever. We are talking about INTERNET. Last I heard no one died from a lack of it.


jazzlady

join:2005-08-04
Tannersville, PA

said by TechieZero:

We could but we aren't talking about housing, food, transportation or whatever. We are talking about INTERNET. Last I heard no one died from a lack of it.

Maybe not, but this is the 21st century. It is a fast paced world based on technology and communication, and these need to keep pace with the rest of the world to stay competitive. Think about the impact the telegraph, then telephone, had on civilization. The internet's impact on society far surpasses either of those.

The rest of the world forges ahead with telecommunications, while here in the US and Canada the govt and corporations are doing everything they can to stifle competition and drive the costs far beyond what they should be. It's about nothing but money.

Decent broadband should be available to everyone in this country. It should be in the home and business of everyone who wants it, it should be available in every school and classroom, and you shouldn't have to take a second mortgage out on your house to afford it.

Nobody expects companies to provide this service for a loss, or even at cost, but the profit margins per GB here are beyond ridiculous, especially with the punitive overcharges.

With this type of thinking, we will continue to fall behind the rest of the world while our leaders continually brag and try and convince the public that we're the most technologically advanced country in the world.

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