Linked by Thom Holwerda on Tue 6th Sep 2011 21:57 UTC
PDAs, Cellphones, Wireless In the US wireless market, AT&T is currently attempting to buy T-Mobile to create one heck of a behemoth wireless provider. While earlier this week the US government already filed a lawsuit to block the merger, citing antitrust concerns, US carrier Sprint has now also filed a lawsuit to block the merger.
Thread beginning with comment 488686
To read all comments associated with this story, please click here.
How does the US market cope?
by Kalessin on Wed 7th Sep 2011 00:27 UTC
Kalessin
Member since:
2007-01-18

It doesn't. It's like broadband and cable/satellite TV. They all suck. Generally, there are no good options. You just try and pick the one that sucks the least.

Reply Score: 7

Alfman Member since:
2011-01-28

Kalessin,


It's one of the great ironies of capitalism/free market economics. Economists promote the free market because competition is good, however corporations in a free market end up buying each other out because it's easier and more profitable than competing.

Reply Parent Score: 6

cyrilleberger Member since:
2006-02-01

It is because wireless is not a free market, but a regulated one. If it was a free market, it would be possible for anyone to create a competitor and start selling services.

However, since for wireless services, the number of frequencies is limited, and government have chosen to allocate them to a specific company, the market is not free but regulated, with limited competition. Hence the opposite of what economists promote. I actually have never heard of any economists promoting such a model, having a regulated market in the hand of private companies can only lead to price agreements and lack of innovation, since it is the best way to guarantee the maximization of profits.

The alternative would have been to have a state agency build the antenna and control the frequency, and rent them to any company for the same price. However, it would not solve the problem of innovation, since such agency tends to suffer more from bureaucracy and delay in implementation. But then you would get a free market. This is basically why, many countries also force wireless companies to allow virtual operators, but since the big companies can choose the price they sell to the virtual operators, it does not end up in more competition.

Reply Parent Score: 1

Lennie Member since:
2007-09-22

(sorry for the slightly off-topic comment)

And after an IPO companies usually stop looking at the longterm. Only shortterm profits.

By then, they are a lot more likely to get a CEO who doesn't own a large part of the company so he/she cares less about what happends to the company in a few years just getting the bonusses.

When looking at the short term, this means moving parts of the company to lower wager countries or outsourcing.

When the company starts outsourcing the production of their core products they will loose all ability to "innovate" because they will loose all knowledge of how the produce the products.

I think the system isn't perfect yet. ;-)

Edited 2011-09-08 13:24 UTC

Reply Parent Score: 2

kaiwai Member since:
2005-07-06

It doesn't. It's like broadband and cable/satellite TV. They all suck. Generally, there are no good options. You just try and pick the one that sucks the least.


Maybe if the free to air television in the US didn't royally suck balls then maybe those pay television operators would have something to compete with.

Reply Parent Score: 3

Morgan Member since:
2005-06-29

That's the crazy thing about the forced switch to digital. We were promised the sun and moon, and ended up with a turd. We gained about 45 extra local channels in my area, however about half of those are doubled. In other words, channel 23 is also channel 41, or thereabouts.

Also, only a few of the new channels are worth watching; the rest are split between local public access (and around there that means a dozen variations on Bubba's Fishin' n' Huntin' Show 24/7), televangelism networks, and Latino TV. Now don't get me wrong, I speak Spanish and could probably enjoy a couple of those, but when that's the best there is out of the bad lot it's just sad.

There are a couple of gems in there though. There is one channel dedicated to older TV shows and has very few advertisements, and there's one similar but for really old and obscure movies, like all of Roger Corman's stuff, and old Basil Rathbone and Vincent Price flicks. For a classic horror fan like me that's a boon.

Overall though, it's nowhere near competition for cable. I've been doing the Netflix thing since I got an Xbox on the cheap, but my girlfriend will soon be cancelling her subscription due to their increase in prices. I may look into Hulu Plus, and there's always torrenting but I've always been somewhat on the fence about that. Broadcast TV I don't have an issue with so much, but pay TV I don't like to download "unofficially". I guess if the show is really good, it's worth waiting on the DVD, but I'm impatient. ;)

Reply Parent Score: 2