Deregulation's Broken PromisesConsumer Reports examines the issues ( old news - 12:34PM Tuesday Jun 11 2002) tags: competition · business A new issue of Consumer Reports notes that while deregulation (across all industries) promises to expand consumer choice and lower prices, the reality is that less government oversight usually harms consumers more than it helps them. The airline industry stands as a particularly ugly example, deregulatiing in 1978 and scoring the lowest in the Consumer Reports ratings. According to Consumers Union president James Guest "What we've gotten is cramped seats on airplanes, more flight delays, cancellations and out-of-the-way connections, bottom of the barrel customer satisfaction with cable TV, more hassles at the bank, frustration with phone bills and trying to understand the gazillion different long distance plans, and a greater risk of power blackouts." Read the complete story at CBS Marketwatch.
Related:- Surewest Fiber Gets Faster, Cheaper
- Comcast, Time Warner Hope To Tame Internet Video
- Verizon: LTE iPhone 'Apple's Decision'
- Cogeco Metered Billing Goes Live, Confuses Customers
- FCC Greenlights Centurytel/Embarq With Wimpy Conditions
- AT&T Offers Free iPhone U-Verse DVR App
- Rainbow Media CEO: Free Video 'Insulting'
- Verizon: Cut Your Landline To Save Money
|
 
Pz_
join:2001-03-31
Brownsburg, IN
clubs: | ?? I've always wondered how the airlines got to be as they are. (since I was only 4 in 78) I just can't see how they could stay in business doing things the way they do. If anyone has info on this, I'd like to read up on it. | |
|  | 
akristov
join:2001-01-31
Tampa, FL
clubs: | Re: ?? I believe the government subsidizes the airline's and in return the airlines are to provide additional capacity during wartime. | |
| randysavage0
join:2002-04-16
Fayetteville, AR | UNCLE SAM BABY! Bailouts  | |
| | 
vbunny
@65.42.x.x | Re: UNCLE SAM BABY! Uncle Sam only does the handouts, the American taxpayer foots the bill in the end. funny, i've never been on a plane, been paying taxes for 20 years. | |
|
sniper 123
@bellsouth.net
| hate to say I told you so.... Deregulation is BAD BAD BAD BAD for consumers, all the way around. The only idiots that would support deregulation are the same chumps that only care about their stock portfolios, and the hell with the rest of us.
Power utilities, airlines, banking, telecommunications....all bad, horrible examples of how the gains of the 20th century for the average joe were all wiped away by ignorant greedy bastards at the top.
Examples:
1. Banking-how many hometown banks are left for you to choose? What, 4 or 5 at least...where there used to be hundreds. Big fish eat the little ones....
2. Utilties-If you live in California, I say no more. | |
| 
Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
 ·AT&T Midwest
 ·Site5.com
 ·Comcast
|  Deregulation - Good or Bad? Sounds like both.
First, deregulation has its ups and downs. Deregulation isn't a win-win situation for everyone. If it was, there wouldn't be such a thing. The cost of deregulation results in poor customer service, overall service, and support. Although, the prices are cheaper.
Second, who can tell how the broadband industry is going to turn out? It may end up being the exception to the rule. Then again, it could end up being on the list of some of the worst deregulation stories that are still be written for airlines, banks, and other utilites.
All I know is this. I WILL NOT pay for substandard service. My broadband connection is excellent and I would not pay for anything less. If the cost were to go up, I would even pay a little more for superb service. I really do not want to be stuck in a situation where I have to choose between crappy service, and semi-crappy service. I don't think anyone here would want that.
Is deregulation right for broadband? I can't answer that question. However, the article does a good job pointing out the negatives. I have read other articles pointing out the postives. Maybe we should just bite the bullet and deregulate, but I don't think I am ready for the shockwave effect if my broadband connection goes into the toliet just to save a few bucks.
--
Nightfall - »www.nightfall.net | |
| | 
mechanicsc
Nothing Could Be Finer
join:2001-07-02
Townville, SC
| Re: Deregulation - Good or Bad? Sounds like both. said by Nightfall:
Deregulation isn't a win-win situation for everyone.
True. It's a win-lose situation.
Deregulation is a "win" situation for companies.
Deregulation is a "lose" situation for consumers. | |
| | | 
chex5
join:2000-05-24
NorthEnd BOS
clubs:
| Re: Deregulation - Good or Bad? Sounds like both.
I have cheaper/better service telephone, internet, air fares. Instead of taking the one-size fits all approach, I can pick and choose what features I need and am willing to pay for, and what ones I don't. If there was no deregulation in these three industries, it would cost $1000 bucks to fly to San Francisco, 20 cents/minute to call New York, 1 dollar a minute to call Europe, and I would be stuck with crappy and slow Verizon PPPOE DSL 768/90 kbps, and I would have NO CHOICE.
NO Thanks!
- Stefan in Allston
said by mechanicsc:
said by Nightfall:
Deregulation isn't a win-win situation for everyone.
True. It's a win-lose situation.
Deregulation is a "win" situation for companies.
Deregulation is a "lose" situation for consumers.
--
Sung to the old New England Telephone Ad Jingle: " We're the only one New Eng-Lund, Hell-Ri-zon Tele-phonnnnne! " | |
| | | | cmaenginsb
Premium,MVM
join:2001-03-19
Palmdale, CA | Re: Deregulation - Good or Bad? Sounds like both. I'm sorry but if wasn't for the regulation that requires ILECs to open up their COs your only choice would be Verizon. | |
| | | |
mechanicsc
Nothing Could Be Finer
join:2001-07-02
Townville, SC
| said by chex:
...and I would be stuck with crappy and slow Verizon PPPOE DSL 768/90 kbps, and I would have NO CHOICE.
Regulation is what gave you the choice on the broadband, buddy. The regulation that states that phone companies have to share their lines with competing DSL providers, etc. is the one to which I refer. The one that they are trying to get removed because cable doesn't have similar regulation.
Without the regulation, you would have NO CHOICE. Better get that Verizon modem warmed up, because if the telcos are successful in their endeavor to get that regulation lifted, you're going to be back on Verizon like it or not.
Still think deregulation is good?
--
DirecPC SRS, Galaxy11 990 Mhz, 4.0.0.40, g/w 205.177.62.72, Win2000 SP2 & Win98 SE. BellSouth DSL coming October 2002, already ordered, can't wait!!! | |
| | | | 
ravital
Just Another Pesky Independent Nh Voter
Premium
join:2001-07-19
Merrimack, NH
| You are typing on a deregulated broadband? So am I. My brodaband is rarely above 1500Kbps, most of the time around 800, all too often around 400, or down altogether. What does that prove, that deregulation is better or worse? No, it proves you live in a community with more muscle than mine or that is more commercially attractive to the providers than mine. Nothing else.
[text was edited by author 2002-06-16 12:51:23]
[text was edited by author 2002-06-16 12:52:25] | |
| | 
mags2
Agent Provocateur
join:2001-07-19
SoCal
| said by Nightfall:
Maybe we should just bite the bullet and deregulate...
Biting the bullet and deregulate is what got California in dire straits with the power supplier pirates. You don't just hop into dereg w/o considering all of the implications and let it work itself out later. Can you even imagine the broadband landscape if dereg were to kick in and take a bite out of the industry a la the electricity debacle last year on the west coast?? The mind fairly boggles. In my mind at least, dereg of anything is bad for consumers.
--
The best defense against logic is ignorance. | |
| | | | | | | | | | | |
its me
@bls.com
| Re: Deregulation - Good or Bad? Sounds like both. As usual, the truth lies somewhere in the middle...to deregulate or re- (or stay) regulated....
I see from anecdotal experiences in GA (natural gas, local and long distance, water services) that *in general* regulation is preferable for consumer interests when the industry is historically regulated or a utility (like power, water, etc.)
As in the case of Russia when it changed abruptly from a Communist to a Capitalist economy, the barons of previously regulated industry tend to not know when to control themselves and plunder the company coffers or drastically reduce service. They just don't know how to act in a free-market environment.
With industries that are non-essential, like cars, clothes, electronics, etc, market pressure seems to drive choice. If Calvin Klein is too expensive, just buy Nautica, for example. The barons of these industries know from experience the value of a customer, and also have a greater tendency toward customer service.
The big question, is of course, "Is broadband a utility or a consumer service?" | |
| | | | | | keefeo
join:2002-06-12
West Bend, WI
| Re: Deregulation - Good or Bad? Sounds like both.
To get to the bottom line I feel that deregulation can help consumers with costs but only if the government will let it. Let every company in the telecommunications business play on the same field. Let a company offer what ever type of service it would like to offer. Remove the regulatory fees that the ILECs have to pay. If you what competition then open the doors to everyone. By doing that it will bring newer technology to the customers because it will be worth while to create the next best thing.
One thing most people don't realize is that a CLEC has every right to place there own facilities to serve there customers but almost all don't. The reason they don't is because the payback is very small and then they must let other companies have access to it. So now they are in the ILECs shoes. Why not let the existing ILEC place the facilities for them and just utilize it when they are finished. If you sold cars wouldn't you rather buy cars from a manufacture who was forced to sell them to you for less than it costs to build it. Your profits will be greater but the consumer will suffer because quality and future technology will probably fail.
Thank You - from the inside - | |
| | | | | | | | | | | | | | 
richk_1957
If ..Then..Else
Premium
join:2001-04-11
Minas Tirith
| In Theory
The fact is, the big companies eat up the little ones and then they raise there rates because they are then [effectively] the only game in town.
And development - Ha! - they moan and groan because they have to support so many people that they don't have time and/or money | |
| | lurker93
Premium
join:2000-06-19
Houston, TX
| Re: In Theory Why not just let business regulate itself? That's what
doctors do with medical boards and lawyers do with the Bar.
You catch and punish the 0.001% bad guys that way ...
And you wouldn't believe those pesky little details that
FDA inspectors want drug companies and fresh meat packing
houses to comply with! | |
| 
micl
Visit Lovely Downtown Port Starboard
Premium
join:2001-10-25
Silver Spring, MD
| Good for the lawyers I don't think all deregulation is bad, but like many have said here, it depends on the industry.
I can tell you that in the case of telecom, deregulation, and then re-regulation with the Telecom Act of 1996 has been very good for the lawyers.
[begin rant]
Too many of the incumbent companies have spent a lot of money on lawyers to figure out how they can interpret the law so that they comply with the bare minimum and perpetuate their monopolies and oligopolies and keep their markets closed... after all, if you are making lots of money, its far easier to pay to keep it that way.
The FCC and many state commissions then simply bury their head in the sand instead of making a real decision in the face of such adversity.
[end rant]
But with some CLECs trying to get a foothold in the market, deregulation would make things far too easy for the RBOCs to perpetuate their monopoly and inhibit any innovation.
--
If I don't see you in the future, I'll see you in the pasture | |
| russotto
join:2000-10-05
Collegeville, PA
| Without deregulation, no DSL. If it weren't for deregulation, there'd be no DSL; we'd still be using leased phones from our local phone company, which would also be our long distance provider.
CR hates deregulation, but back before deregulation, if you wanted to travel by airplane, you had to pay through the nose. Sure, you'd travel like a king, but you'd need a kingly budget as well.
Power company "deregulation" in California was another thing entirely... deregulating the cost TO power companies while holding fixed the prices charged BY power companies was a recipe for disaster, obvious to anyone who has so much as heard of supply and demand.
And of course what the ILECs call "deregulation" is really restoration of their ability to leverage their locally and regionally granted monopolies (that is, REGULATION) into other areas of businesses. | |
| | 
alanhdsl
Premium
join:1999-10-09
Phoenix, AZ
·Qwest.net
| Re: Without deregulation, no DSL. said by russotto:
Power company "deregulation" in California was another thing entirely... deregulating the cost TO power companies while holding fixed the prices charged BY power companies was a recipe for disaster, obvious to anyone who has so much as heard of supply and demand.
Perhaps so, but deregulation was sold to the public as a way to lower their costs. The fixed cost provision was made to enforce that promise. If they promised to triple the customer's power bill, that would have been more honest. On the other hand, they probably would have had trouble getting it passed. | |
| | | | | 
ieolus
Support The Clecs
join:2001-06-19
Duluth, GA
| Re: Without deregulation, no DSL. said by pupowski:
said by russotto:
If it weren't for deregulation, there'd be no DSL....
Boloney! The anti-trust laws used to break up the AT&T monopoly were part of America's regulatory structure, and DSL was developed by regulated companies
And it never would have been offered by any RBOC if the CLECs hadn't introduced it after TA96.
The problem right now is that we have a do-nothing FCC that lets the RBOCs get away with circumventing the law (TA96). | |
| 2farfromCO7
join:2000-10-14
Farmington, MI
| Cable deregulation is the biggest failure At least in the other industries deregulation has improved competiton somewhat. However, in cable TV, it's been a complete failure. THE ONLY PURPOSE OF DEREGULATION SHOULD BE TO CREATE CHOICE AND COMPETITION. Cable deregulation has produced almost no competition. 95% of people only have 1 monopoly cable provider. At least with the others competition was created, except maybe the airline, but with telecom and energy(you can now choose from a number of power suppliers, that you power company buys from) it has created some choice where none before existed. | |
| | 
tower29
Premium
join:2002-02-12
Loveland, CO
|  Re: Cable deregulation is the biggest failure
What is funny about his is he is exactly right. However, in Melbourne Florida at area code 32940 you can choose from 4 different cable internet providers. Remember the law that was passed that forced cable companies to at least share their copper? They have to pay the man a little that owns the lines but they can still pump their juices through them.
The sad fact that 65% of people that can get "high speed" cable access don't. Actually, the figure is higher. So until those cable companies like att in Colorado decide to invest in the freaking future isdn will be my only choice....My house is worth 180,000 with houses around in the 500,000 range and we are treated like extras!!!!! They don't want my money I guess.............tower | |
| | 
greatjohn
join:2000-10-27
Schenectady, NY | It is time for our govt.(us) to make the choices we want through the democratic process, not the big corp's with all the money. We should vote on every issue. Its our god given right. Talk is cheap, lets get to work! | |
| | | 
SAM Hunter$
join:2001-05-11
USA
| Re: Cable deregulation is the biggest failure said by greatjohn:
It is time for our govt.(us) to make the choices we want through the democratic process, not the big corp's with all the money. We should vote on every issue. Its our god given right....
How do we deal with the chads? How can we know the real intent of the voters. I mean just because they clearly mark their ballot one way doesn't mean they meant to actually do it. They may have actually meant the opposite! Yes means no, and no means yes, unless there is a hanging chad in which case it means whatever the ballot counter wants it to mean.
--
"Only the dead have seen the end of war." Plato
[text was edited by author 2002-06-11 16:50:55] | |
| | | | 
MowerMan5
Premium
join:2001-04-07
Fort Worth, TX
| Re: Cable deregulation is the biggest failure said by Lost in Space:
How do we deal with the chads? How can we know the real intent of the voters. I mean just because they clearly mark their ballot one way doesn't mean they meant to actually do it. They may have actually meant the opposite! Yes means no, and no means yes, unless there is a hanging chad in which case it means whatever the ballot counter wants it to mean.
LOL. NO, not the hanging chads again!!!!!! Oh, the horrors!
--
support Israel... fight terrorism | |
| 
pupowski
Premium
join:2002-03-22
Isle of Pups
 ·Cricket Broadband
·Comcast Formerly ..
| De-regulation is a fraud Republicans use de-regulation like criminals use a shortage of police. The legacy of the radical right "conservatives" is declining standards, lack of competition, business fraud, and widespread political corruption. Right-wing ideologues use denial, double-talk and secrecy to evade responsibility and retain political power. These so-called "Christian conservatives" are neither in their actions.
--
Mozilla is a winner | |
| |
See 64 replies to this post | |
MowerMan5
Premium
join:2001-04-07
Fort Worth, TX | Airline prices down? Does anyone have any data on relative airline prices from before deregulation and after? I wan't doing much airline ticket shopping before 1978...
--
support Israel... fight terrorism | |
| | 
Arelay$
Okee-Dokee
Premium
join:2002-04-25
Tulsa, OK
| Re: Airline prices down?
--
If you can't beat 'em, they're not tied down properly. | |
| | |
MowerMan5
Premium
join:2001-04-07
Fort Worth, TX | Re: Airline prices down? okay then... wasn't the major point of deregulation lower prices for consumers? it would seem that in that regard, deregulation worked.
--
support Israel... fight terrorism | |
| | | |
SAM Hunter$
join:2001-05-11
USA
| Re: Airline prices down? said by MowerMan:
okay then... wasn't the major point of deregulation lower prices for consumers? it would seem that in that regard, deregulation worked.
Just because there is a correlation doesn't mean there is a causality link. Maybe deregulation had something to do with it and maybe not. Then maybe its effect was just one of many factors that influenced the price. But to be fair its pretty much a given that at least in the case of the air travel industry, deregulation did have a significant role in lowering the cost of air fare. You know what they say about timing being everything.
--
"Only the dead have seen the end of war." Plato
[text was edited by author 2002-06-12 00:55:06] | |
|
SAM Hunter$
join:2001-05-11
USA
| Deregulation in of itself is neither good or bad.
Getting back to the airlines, they actually are a poor example to use for any argument regarding deregulation. Immediately before deregulation the major carriers such as United, TWA, Pan-AM, and American had monopolies on all the major routes. Only the financially well off could afford to fly and aircraft technology wasn’t commercially that far into the modern jet airliner age even though the first American jetliners, (Boeing 707) had been around since the late fifties. However, the transition from propeller aircraft to jets was gradual one. Jumbo jets were relative new when deregulation kicked in, and were not dominant but were confined or limited to international and major domestic routes in the US such as LA to NY.
The current criticisms of the airlines are valid but it is unclear how much of that is due to deregulation and how much is due to the evolution of air travel from technology and certain other market factors and competition. One positive thing from deregulation is it definitely contributed to make airline travel affordable to the average person. In the case of air travel prices immediately begin to drop dramatically when the airlines were deregulated. Before, deregulation the cost to fly was proportionately much greater than now.
To sum up, both regulation and deregulation in principle have the potential of being very beneficial. Like all things even in their best form they would still have some weaknesses or faults. On the other hand they have equally the same potential for disaster.
One thing for sure, in order for either regulation or deregulation to be successful on a case-by-case basis you have to have strict accountability. Show me a failure for either side in the past and I will show you a textbook example of a lack of accountability.
--
"Only the dead have seen the end of war." Plato
[text was edited by author 2002-06-11 23:39:23] | |
| |
See 6 replies to this post | |
lurker93
Premium
join:2000-06-19
Houston, TX
| Deregulation and Public Utilities Commissions Just do like Texas where the fox guards the henhouse --
seed the PUC last summer with an Enron executive in the
top position.
Thanks governor Rick Perry (who nobody voted for) for
making that political pick. And thanks George Bush
for picking Perry to take your vacated position.
Time to switch votes to another political party... | |
| | 
RiceSan
join:2002-01-15
111 | Re: Deregulation and Public Utilities Commissions | |
| | | keefeo
join:2002-06-12
West Bend, WI
| Re: Deregulation and Public Utilities Commissions
I'm an OSP Engineer for an ILEC and have to deal with these deregulation rules every day. I feel there can be advantages but the government needs to relieve the regulatory fees the ILECs have to pay. The government want what they call "parity". Then they should give every company the right to charge what they want for there services and leave it up to the consumer to choose. If they want competition then why do the CLECs automatically get the right to offer services like Long Distance and the ILECs have to jump thru a million hoops just to have the right to apply for it and ussually get denied. The CLECs don't have to pay regulatory fees to the government while the ILECs do. Plus the ILECs are spending there capitol dollars to place the fiber and copper infrastructer knowing that the CLECs will be coming behind them and utilizing them. In Chicago the cost that a CLEC has to pay an ILEC is just over 2 dollars. So if you spend $50,000 to facilitate a building and you only make 2 dollars per pair it doesn't really make it worth the ILECs time to do it.
To get to the bottom line I feel that deregulation can help consumers with costs but only if the government will let it. Let every company in the telecommunications business play on the same field. Let a company offer what ever type of service it would like to offer. Remove the regulatory fees that the ILECs have to pay. If you what competition then open the doors to everyone. By doing that it will bring newer technology to the customers because it will be worth while to create the next best thing.
One thing most people don't realize is that a CLEC has every right to place there own facilities to serve there customers but almost all don't. The reason they don't is because the payback is very small and then they must let other companies have access to it. So now they are in the ILECs shoes. Why not let the existing ILEC place the facilities for them and just utilize it when they are finished. If you sold cars wouldn't you rather buy cars from a manufacture who was forced to sell them to you for less than it costs to build it. Your profits will be greater but the consumer will suffer because quality and future technology will probably fail.
Thank You - from the inside - | |
| | | |
|
|
Re: Deregulation - Good or Bad? Sounds like both.