It seems to me that acting like greedy assholes to the point that the regulators step in, would actually be failing at maximizing shareholder value.
I believe also that paying dividends would be an alternative to having a pyramidal share price.
I believe also that paying dividends would be an alternative to having a pyramidal share price.
Software companies do it all the time. Oracle charges Salesforce more for its database than it charges a university and it gives it way for free to some organizations.
Essentially, net neutrality is saying that the telecoms don't have the right to choose how to charge for their product.
If the FCC is saying the internet is a right everyone should enjoy at the same rate, why don't they create a public wireless grid? People argue against that saying the government will control our traffic, but essentially that's what they are arguing for here as well. They want the FCC to control the internet, but keep it private in such a way that limits the corporation's ability to profit.
I'd be angry if the FCC came in and told me what I could charge for my SaaS or my consulting hours. Why is it different for the telecoms?
Because the telecoms have gotten tons of help from the public, via the government, over the years. At the Federal level, the cable and satellite companies got the original anti-circumvention laws that led to the DMCA. They also get to be exempt from a lot of state level regulation that they might not like, in exchange for the far friendlier FCC. And at the local level, telcos get to use public rights of way and often have monopoly grants.
They're in no way comparable to a small entrepreneur. They're like a company that's been given (or bought) permission to operate a toll road. In exchange for being allowed to make money, they need to charge everyone the same tolls and the amount of the tolls that they charge is going to be subject to regulation.
As for why the government doesn't just build and operate the infrastructure itself ... if the telcos keep it up, that may just be what happens. Critical infrastructure has been a frequent target, historically, for nationalization when the owners of that infrastructure are perceived to be rent-seeking to excess. The public tolerance for toll roads evaporated in the 1880s [1] and they were almost entirely stamped out by the Progressives; the telecommunication operators of today would do well to keep that in mind.
[1] http://eh.net/encyclopedia/article/Klein.Majewski.Turnpikes
But back to your point, the toll roads I travel on charge more for semi-trucks than they charge for passenger vehicles.
I understand the thought that the public is investing in these wires, so they own them, but the public invests in all sorts of industries, including pharmaceuticals (via the NIH), vehicles (buying GM), mortgages (fannie may, aig), but yet they don't regulate what gm charges for cars or Pfizer charges for their drugs.
I wonder why we believe it is okay for the govt to meddle in some areas and not others? Where and how do we draw the line?
Yes, because the semis cause more than their share of road-maintenance costs. This is akin to charging me 2x as much if I want to upgrade to a pipe that's 2x as fast. Nobody has a problem with that.
The problem happens when the government sells the tollway to a private corporation, who then starts up its own trucking line. The road's new owner charges its own trucks $0.25 and everybody else's trucks $5.00. How could you defend that?
I wonder why we believe it is okay for the govt to meddle in some areas and not others? Where and how do we draw the line?
This isn't even a new question. There are some interesting parallels with the early telephone switching system. About a hundred years ago, an undertaker named Strowger noticed that his competitor was getting all the calls whenever someone kicked the bucket. It didn't take much investigation before he discovered that Betty the Switchboard Operator was the sister-in-law of Bob the Undertaker at the competing funeral home.
Nowadays we're faced with the exact same scenario, but due to the logistics of the last-wire monopoly, we can't solve it by inventing a new switching system like Strowger did. That's where the government has a legitimate role to play.
The overarching point is that it's a clear good for society. It doesn't have to be fair - we're not required to be nice, or fair, to corporations - they're not people. We're required to maximise the benefit of the citizens in the country. Sure, being 'unfair' to corporations can have negative long term outcomes, which is why you only do it in cases like these: where the outcome is so clearly a positive for the system as a whole.
Right now, they are basically stuck paying for all the copper they bought. They can't buy new fiber. They can't install new towers, etc...
Even so - I'm not sure they're being prevented from charging more, necessarily - although the FEC would gain the power to do so if necessary. The main thing is, they're being prevented from charging in a discriminatory manner.
I'm not sure how tractable this problem is. If you'll forgive some hand-waving, it reminds me of the oligopoly problem turned inside out - rather than a few large companies in a market, you have a few powerful directors in a market where shareholder votes are exchanged for management services. Even if directors have independent ideas about the right policy for the corporation, as they should, the nature of the (internal) market itself may result in unanimity to the detriment of shareholders. Shareholder demand for value (qua consumer demand for management services) is rather inelastic, which limits the appetite for risky things like firing the entire board, and by proxy firing the management team - the more so when fund managers of institutional investors (administering important things like pensions) have a clear fiduciary and ethical duty to maximize returns to the fundholders.
Yes, simple risk/return analysis? And they were warned too.
"Don't harass the chicken that lays golden eggs too much."