So that's actually $200 million split between four companies and what really amounts to not much more than cost od business for them.
This doesn't factor in the ongoing PR cost of headlines like "FCC weighing fining ISP X", "FCC fines ISP X", "ISP X appeals fine", "ISP X loses appeal", etc.
Still, I agree the fine could have been harsher.
The US telecom market could be more "free" than it is, but there are lots of options, none of which are perfectly "free".
The telco industry has always been a regulated monopolistic market and that is primarily caused and was created by regulation..
Right, agreed.
> implying such is dishonest.
/me raises eyebrow.
Making utilities into something that consensus opinion would label a "free market" is incredibly difficult. Without regulation, you get monopolies. With regulation, you get monopolies.
Implying that a "free market" can solve the utility problem is (I won't say "dishonest" because I don't believe you're arguing in bad faith) facile.
Anywho I am a proponent of Local Loop Unbundling. Limited conduit/pole space and complex webs of property easements make wired telecoms natural monopolies. Have the government own the conduits and fiber cables, and rent them to service providers instead.
Also, for there to be a free market, there needs to be some sort of market which probably requires a sense of property rights. Whether property rights are in the "natural" state of things is an argument for the philosophers I suppose.
A free market isn't the equilibrium state. Even if a particular idea - like adding or removing some regulations - looks like it would create a free market in some sector, that's only a static picture of conditions just after applying the idea. When you look at that market evolving over time, you'll see it rapidly shedding its "free" status.
Government regulation does not have to lead to regulatory capture. Though it does require vigilance.
You're not describing a free market. In a free market the goal is always just to make the most amount of money possible. Once you've achieved that goal, you can just drop prices, absorb losses via debt, and freeze out competition. That's why free markets don't work and need heavy regulation.
I don’t think it’s reasonable for the FCC to be levying excessively punitive fines that put businesses at risk just to make a point. The fine seems like it should be based on the violation.
And unfortunately each of the big careers was doing this sort of thing. If we don’t like it then we should look to support congress passing some form of data privacy rules for carriers.
[1] https://www.wsj.com/articles/t-mobile-vows-to-fight-fcc-fine...
Maybe based on revenue, profit, market cap, and/or something a lot more well thought out than what I throw together on my phone at a whim. Obviously when you specify certain factors like "income," they end up being gamed to minimize those factors and therefor minimize punishment so whatever factors you use need to be difficult to adjust around. Probably also need to account for recovery rates.
Earning 1% back for one person may be trivial compared to the another which makes them more likely or at least financially capable to repeat the offense.
There are many criticisms of the approach, but those are mostly about crimes committed by individuals, not corporations. When you're talking about HugeCo abusing customers, I think seriously punitive fines can work. But you need to make them painful enough that at least the board, and preferably the shareholders, want to ask questions about how exactly they know this won't happen again.
> I think the endgame from such a punishment regime is companies will reorganize their corporate structure to section everything off from such liabilities.
Of course they will. Any time a corporate entity can construct legal structures to capture more, shed externalities or shift risk, it will. Why wouldn't it? "We have a legal obligation to maximize profit..."
But that's not the "endgame of such a regime", that's normal business.
Deterrence is the goal.
On the other hand, a corporation rarely if ever does anything for reasons other than "revenue > costs"; in fact, it usually employs people making sure that ideas violating that rule don't get executed. So calculating a punishment in a way that erases all profits from the infraction and then some is a very good strategy when dealing with big companies.
If you’re basing the punishment on profits from the infraction, you still have to take into account the percentage of those infractions that are punished. If the fine is 5x what the company would make from that behavior, but there’s only a 5% chance they get caught, they may very well choose to do it anyway.
Also, corporations are made of people. An emotional punishment may sway someone high up at the company who has the power to reform it.
Companies will keep doing illegal things if they can make money doing so.
Without this context, it's hard to ascertain how meaningful of a deterrent the fine actually is.
What if they gave it all away for free? We wouldn’t fine them $0. The revenues earned should be considered, but we have to keep in mind that price does not equal value, and if a transaction occurred then the buyer was probably willing to pay more than the list price for it, that auctions only result in the price being equal to the amount the second-highest bidder was willing to pay, and that your data once sold by the telco company could end up selling for even more in future markets than it is selling for in today’s markets.
Should we fine them how much they were able to gain from it without pricing in how much the victims lost from it? And how well can we evaluate how much the victims lost? The problem with the government getting all the money is that the focus is removed from the victims, and questions like these aren’t given complete consideration. Would we have a better valuation if the victims were to receive compensation, if only due to the conversations that would arise from such proceedings? And also since, well, they’re the victims?