Path: utzoo!news-server.csri.toronto.edu!cs.utexas.edu!wuarchive!zaphod.mps.ohio-state.edu!casbah.acns.nwu.edu!nucsrl!telecom-request From: sichermn@beach.csulb.edu (Jeff Sicherman) Newsgroups: comp.dcom.telecom Subject: Re: Cable TV Companies Enter the Telephone Business Message-ID: Date: 8 Mar 91 06:47:22 GMT Sender: news@casbah.acns.nwu.edu (Mr. News) Organization: Cal State Long Beach Lines: 31 Approved: Telecom@eecs.nwu.edu X-Telecom-Digest: Volume 11, Issue 185, Message 2 of 8 Originator: telecom@delta.eecs.nwu.edu X-Submissions-To: telecom@eecs.nwu.edu Nntp-Posting-Host: hub.eecs.nwu.edu X-Administrivia-To: telecom-request@eecs.nwu.edu In article cyberoid@milton.u. washington.edu (Robert Jacobson) writes: > I'm sorry, perhaps I missed it, but who has refuted the argument that > the local telephone monopoly does indeed allow for rate averaging and > holding down local rates? In eight years of telecom policy work, I > never heard a convincing argument to the contrary ... and, in fact, > energy regulation has proven precisely the opposite. Throughout > California, the state with which I am most familiar, residential and > commercial (small-business) customers are paying billions more in gas > rates so that industrial customers can be cajoled away from > "competitive options" (many of which they created, for just this > purpose) with lower rates. Competition just means more costs for the > "core customers" who can't get access to real alternatives. I don't > see cable rushing to hook up the Aunt Minnies, or you, or me. I am not refuting this point, but please be specific about rates *and* revenues. With sufficiently high volumes, it is perfectly possible for a large user with lower rates to generate a level of revenue that makes an industry/activity economically viable that wouldn't be with the lower volumes of residential/commercial usage even with their larger numbers. It's fair to call this a subsidy but also an economic necessity in some cases. [Moderator's Note: Rural areas will find all this to be a very moot discussion for years to come, I imagine. You're quite correct in calling it a subsidy -- but as you point out, that does not make it bad in all cases -- or maybe not good either -- but a realistic solution. PAT]