Re:Legitimate reason for bailout? (Score:5, Insightful) by djlowe (djlowe@mailandnews.com) on Tuesday October 22, @09:58AM (#4504316) (User #41723 Info)

Doesn't their existing infrastructure, and social dependency on that infrastructure, give them a somewhat legitimate need for a bailout? As far as I know, the citizens of the US are engaged in an ongoing "bailout" of the Baby Bells... that's what all of the tariffs, etc. on the standard phone bill are for. We've *paid* for the infrastructure, allowing the telcos to profit from their regional monopolies for decades. I think that it is time to reclaim our ownership of it, decouple the infrastructure from the services by making infrastructure maintenance the province of non-profit organizations, forcing the the Baby Bells to compete for services on a level playing field. Of course, it will never happen - the Baby Bells spend enormous amounts of lobbying money at both the state and federal level to retain their "ownership" and control of "their" infrastructure, and the fact that our money was spent to build out their regional infrastructures is something they'd prefer everyone ignore. Oddly, one of the justifications that the Baby Bells continue to use for tariffs is to guarantee services in low population density areas... yet these regions are still lagging far behind more populous locations in DSL availability (and even quality POTS lines) because it isn't "cost effective" for the Bells to roll out such services there, despite the fact that the tariffs are supposed to eliminate cost considerations in such places in the first place! Further, the ILECs continue to prevent competition from CLECs whenever possible. True story: Here in Upstate NY I had a customer that wanted high speed Internet access... they are located in a small rural town, and a T1 line wasn't an option due to the cost. The POTS lines are lousy (and have been for the nearly 2 decades that I've done service there), and the local cable company didn't offer cablemodem services because their infrastructure couldn't support it and the owner wasn't prepared to make the financial commitment to rebuild the cable plant in town. The ILEC in this case (Verizon) wouldn't even offer them ISDN, which was in theory available, would have been at least acceptable for their Internet needs (which were basic email and light Web-browsing for some 20 LAN users). Well, after some searching, I found a CLEC that could offer DSL albeit "only" at 256Kbps due to distance) and local business dialtone service as well. There was much rejoicing, and plans were made to roll it out. A few other companies in town discovered what this company doing, and they too expressed an interest in DSL for their Internet access. It looked like a "win-win" for everyone: My customers would get cost-effective Internet access, lower cost business telephone service, the CLEC would get business that Verizon couldn't (or wouldn't) provide and my company would make money installing the firewalls, routers, mail servers, etc. When Verizon found out what was going on, they closed the POP from which the CLEC was operating, splitting the services between 2 small cities in the area, citing "lack of demand for services" from that location as the reason for their actions, thereby eliminating the CLEC's ability to deliver local dial tone and DSL services to that town. This is the same Verizon that is now allowed to offer long distance services because they have sufficiently opened up the last mile to competition... The more things change, the more they stay the same, at least here in Verizonland. It's obvious to me that so long as the RBOCs have control of the last mile, continue to have it supported by tax dollars, credits and tariffs, and abuse their monopoly control over it, that they will *not* compete, but will simply continue to ask for more money from us and the government when their mistakes cost them money. Time to wean them from the public teat. No more bailouts! Switch when you can, route if you must, and bridge only when absolutely necessary.

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Re:Legitimate reason for bailout? (Score:5, Insightful) by evbergen on Tuesday October 22, @06:56AM (#4502991) (User #31483 Info | http://www.e-advies.info/)

This is why we should seriously consider abolishing the government and leaving everything to the market forces. I don't know about you, but I'd sure miss the powers granted to me by the fact that I live in a democracy right now, and the rights granted to me by my country's constitution. Go back to the jungle, or participate in a free fight, if you think that's best for humanity. But please allow the rest of us to strive for some civilization. Thanks. All generalizations are false, including this one. (Mark Twain)

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Re:Legitimate reason for bailout? (Score:5, Insightful) by 4of12 on Tuesday October 22, @09:24AM (#4504040) (User #97621 Info | http://slashdot.org/ | Last Journal: Wednesday May 08, @04:12PM)

I don't know of any rights granted to me by the constitution. Read it again. Compare the government of the United States with governments typical 250 years ago and with various contemporary governments in other parts of the world such as North Korea, Saudi Arabia, Myanmar, Iraq, Zimbabwe, etc. Most U.S. citizens are spoiled by not having direct first-hand experience with a big league oppressive regime. Take a 6 month bus tour of Central America and tell me when you get back that we aren't lucky to have the luxury to be actually arguing over something like a ballistics database. Personally, I rather enjoy the right to not be woke up in the middle of the night by jack-booted thugs displeased with my criticism of some leader in government.  • 9345837475 replies beneath your current threshhold.

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Re:Legitimate reason for bailout? (Score:5, Insightful) by October_30th on Tuesday October 22, @07:16AM (#4503084) (User #531777 Info | http://slashdot.org/~October_30th/journal/ | Last Journal: Friday May 24, @11:35AM)

This is why we should seriously consider abolishing the government and leaving everything to the market forces. Like health care? "Sorry, sir. I know there's a gaping wound in your skull and that it hurts, but your credit is no good here. Please go away and die outside in the gutter with all the other poor people." Like law enforcement? "I'm sorry, sir, but there's nothing we can do. You have not paid for our police services. We cannot dispatch officers even if there's a murderous psychopath banging on your door with a bloody knife in his hand." Like rescue services? "I'm sorry to hear that your house is on fire, sir, but we are a business not a charity. You should remember to pay your bills next time." And so on... People like Friedman and Hayek have proved You can't really prove anything in even hard sciences like physics. Saying that something has been proven in economics or sociology is just ridiculous. Like psychology, economics and sociology are not hard, predictive sciences (some would say that they're not science at all) in the same sense as physics or chemistry. If capitalism were a scientific theory, it would have been dropped a long time ago because it has no real predictive power and often contradicts with the real world observations. Moderators: Please do not moderate me up. I'm a conscientious karma objector!

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Re:Legitimate reason for bailout? (Score:4, Insightful) by October_30th on Tuesday October 22, @08:42AM (#4503703) (User #531777 Info | http://slashdot.org/~October_30th/journal/ | Last Journal: Friday May 24, @11:35AM)

and have a license to carry a Ruger .38 to do so. And I am happy to know that if I am burgled or mugged the criminal will rarely have a gun and that it's even rarer that the gun will be used. Regardless of whether the cops will catch the criminal, I can cope with losing some money or property. Health care? You have only to go to a socialist country to see how that works. They won't throw you out in the gutter, but they will make you get in line, possibly for months to remedy serious ailments such as cancer. Well, you could say I've been to a socialist country: I was born in a one with mostly state controlled economy. I am currently living abroad in a Northern European country which has had a large socialist party in the government for the last twenty decades. And you know what? The living standards are excellent in both countries. Working public transportation, no people living under the poverty line (check out the US and UK stats in the CIA worldbook for comparison), free public schooling, public libraries and goverment subsidized university level education to allow even the low wage blue collar workers' kids to have an advanced degree if they so choose. Crime is low because the social "safety net" will provide you with basic necessities even you go completely bankcrupt. As far as your medical care argument goes, you couldn't be more wrong when it comes to Northern Europe and Scandinavia (UK public health care is in real shambles, though). As I've pointed out in one of my recent posts, I've undergone several surgeries. The latest problem with the eye was diagnosed at a private clinic (you know, private clinics are allowed even if the public health care is run by the government!), I got a referral to the local hospital (state run university hospital) and was under the knife in a week. I spent another week in the ward and paid $200 for that - the $8000 operation itself was paid by the society. I pay the progressive 28% income tax gladly for a system like that that is accessible to all citizens regardless of their income (unlike insurances). You should know more about practical socialism before your spout nonsense like that. That's the kind of black and white reasoning that's not realistic. There is a middle ground between dog-eat-dog capitalism and total commitment to a government run economy, you know. Moderators: Please do not moderate me up. I'm a conscientious karma objector!

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Re:Legitimate reason for bailout? (Score:5, Insightful) by elvum on Tuesday October 22, @08:45AM (#4503728) (User #9344 Info | http://www.round.org.uk | Last Journal: Thursday July 25, @08:36AM)

The primary reason most people advocate capitalism is ETHICAL, not scientific. It was liberals and their endless dreams of micromanaging the perfect society that gave birth to that study. Indeed - you only have to look at the fine examples of capitalistic ethics provided recently by companies such as Enron, Worldcom, Global Crossing etc to realise how unnecessary government regulation in the free market is. As far as your other statements, many of us wish there WAS no police force. I am perfectly capable of defending myself, and have a license to carry a Ruger .38 to do so. Ah yes, and of course the police do nothing that giving everyone a gun wouldn't. It's like I've always said: you can't beat a heavily-armed lynch mob for a meticulous and professional criminal investigation leading to a fair and open trial. Health care? You have only to go to a socialist country to see how that works. They won't throw you out in the gutter, but they will make you get in line, possibly for months to remedy serious ailments such as cancer. Even dialysis machines are hardly easily accessible. And of course, limiting access to healthcare according to personal wealth or employability is such a fair way of arranging things, isn't it? After all, it's obviously entirely your own fault if you're poor or unemployed. I'm sure many of the /. readers left jobless by recent events in the tech industry will back me up on this one. Incidentally, which socialist countries are you thinking of? How about Cuba as a counter-example? The health service there is excellent, and completely free at the point of use.

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Capitalism is ethical? (Score:4, Insightful) by Epeeist (Colin@murorum.demon.co.uk) on Tuesday October 22, @08:47AM (#4503748) (User #2682 Info | http://www.murorum.demon.co.uk)

> The primary reason most people advocate capitalism is ETHICAL, not scientific. In what theory is capitalism ethical? Nothing in my readings has any statements about an ethical dimension. > Health care? You have only to go to a socialist country to see how that works. They won't throw you out in the gutter, but they will make you get in line, possibly for months to remedy serious ailments such as cancer. So what happens if I have cancer, but no money for treatment? How is this different to the "socialist" case? > You need to think about more than one possibility. Chanting to yourself over and over again "Government can solve my problems, government can solve my problems" is not going to work. As opposed to chanting "Government can't solve my problems" or "Only the market can solve my problems"?

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neo-economic-liberal bullshit (Score:5, Insightful) by dmiller (djm@mindroCOFFEEt.org minus caffeine) on Tuesday October 22, @07:17AM (#4503086) (User #581 Info | http://www.mindrot.org/)

Well, the point is that it is fundamentally wrong for the government to do anything to hinder the workings of the market economy. I sincerely hope that you are joking, or playing devil's advocate. The "market economy" is a fiction, created by government contrivance. Do you really believe that it is some sort of objective truth? or that it is the ultimate expression of human desire for advancement? The market economy has done such an excellent job in protecting the environment and promoting individual liberty. Ironically enough, the "free market" has given us the most blatent interferences in market freedom that we have seen. This is not to say that the market is undesirable or is not an excellent allocator of (some) resources - just that is it insufficient as a complete societal model.

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The market economy depends on a strong government. (Score:5, Insightful) by Per Abrahamsen on Tuesday October 22, @07:34AM (#4503208) (User #1397 Info | http://www.dina.kvl.dk/~abraham/)

It is far more profitable to either kill or join with your competitors, than to compete with them by offering better products at lower prices. This is why a strong government is needed to ensure a working market, based a continues struggle to provide better goods at lower prices than your compatitors. Without such a strong government, producents will join force in guilds, who keep the market closed to outsiders, by force if necessary. This was the situation until the development of nation states with a strong King as the leader. Unfortunately, this violates the foundation for the Libertarian belief, namely that all evil is created by government and all good come from the market. And as always when belief and reality slashes, the believers are unable to see the reality. Of course, this isn't an excuse for the government to take up other tasks than ensuring that players on the market follow the rules.

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Re:Legitimate reason for bailout? (Score:5, Informative) by JaredOfEuropa on Tuesday October 22, @07:35AM (#4503217) (User #526365 Info)

"People like Friedman and Hayek have proved that markets are the ultimate source of truth, at least in this world." I suggest you go re-read Friedman. First off, he did not prove that free markets are the best solution, he merely made a (very compelling) argument that it is so. Second, Friedman himself pointed out various examples where 'Market failure' can occur. One example he cites is about public works, for example people might be willing to pay a fee for using properly maintained sidewalks, yet it would be economically unfeasible for a private company to collect these tolls. So instead we all pay a small amount of tax and the government takes care of the sidewalk. There are other factors that may may prompt a government intervention: in case of the telcos, the government may decide that having a phone line is a basic right, and that telcos are supposed to hook everyone up for a basic fee, with the easy hookups subsidising the ones in remote locations. If governments did not do this, then all the telco's would tell the few customers living in the sticks to get stuffed if they wanted a phone hookup. I am not saying any of that is right or wrong, but there is nothing fundamental about letting the market economy run its course. It may be the most efficient, and there is a strong case for any government to think twice before interfering with the free market, but not even Friedman suggested to leave everything to the market.

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Re:Legitimate reason for bailout? (Score:4, Informative) by RobinH on Tuesday October 22, @08:45AM (#4503732) (User #124750 Info | http://slashdot.org/)

Well, the point is that it is fundamentally wrong for the government to do anything to hinder the workings of the market economy. When the government doesn't do anything to 'hinder' the economy, you get a situation like the roaring 20's, which leads to rapid inflation, and overvalued markets. Then you get the depression. The reason the world pulled out of the depression was because governments started spending lots of money (another interference in the market). The first economy to pull out of the depression was Germany, because their leader said, "I don't care if we don't have money - just build me a frickin' army!" Of course, they could have spent the money on road or schools too, and that would have worked, but hindsight in 20/20. In more modern times, the central banks *agressively* set interest rates higher if the risk of inflation gets too high, so as to slow the economy, and governments will increase spending and lower interest rates if the economy slows down too much. Get this through your head: the economy is naturally Unstable! This is what economists have learned in the past century. Economies have to be regulated by governments or they fail dramatically. You owe your prosperity to Greenspan and people like him (e.g. John Maynard Keynes). As an aside... this natural instability, and our ability to control it with a feedback loop is why I think economists and control systems engineers like myself should spend some time working on the problem together. The problem of economic balancing and the control systems problem of balancing an inverted pendulum have many interesting similarities. "I have never let my schooling interfere with my education." - Mark Twain

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By all means, prop them up. (Score:4, Insightful) by Sheetrock on Tuesday October 22, @06:53AM (#4502981) (User #152993 Info | http://slashdot.org/...y&uid=442574&id=4236 | Last Journal: Thursday August 23, @05:44PM)

As you mention, a good deal of the current infrastructure was laid by these companies and is currently being enjoyed by a much larger segment that had little or nothing to do with it. However, if government is going to pump money into the telcos, it should probably be with the expectation that the infrastructure will be upgraded to make it possible for the continuing deployment of broadband technologies by the companies who are actually trying to expand their offerings to consumers. When illogic prevails, reason gives way. -- Japanese proverb

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Re:Well, yes and no... (Score:5, Insightful) by JPelorat on Tuesday October 22, @07:11AM (#4503063) (User #5320 Info)

So we should reward them with welfare? Retire them on full pension? Because they 'took a financial bullet for prosperity' or some such nonsense? You realise we're talking about corporations? Businesses. Legal entities. Not humans. They're not war veterans. They deserve no special loyalty simply because they were first or paid 'too much' for their equipment. Do we celebrate and subsidize the construction companies who laid the first interstate highways? Well, maybe, but not for that reason. The owners and employees who started the telcos and grew them and maintained them have already been amply rewarded - they were paid while they were doing it and they got to see the value of their stocks grow. If they want more money, they have plenty of other options besides being subsidized by the Federal Govt.

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Companies with failed business models should be allowed to fail: that is The American Way. This economy depends on the fact that failing companies die, and in their place better/faster companies are born. Just like any other healthy ecosystem, we need a certain amount of "churning" to keep things moving. Stagnation is bad, and will only lead to long-term problems.

Buy wind power today! [newwindenergy.com] |

The problem with airline failures (Score:5, Insightful) by alexhmit01 on Tuesday October 22, @08:43AM (#4503712) (User #104757 Info | http://www.feratech.com/about/bios/ahochber/)

The US economy is DRASTICALLY improved by commercial air travel. The fact that you can cross the country at will is a BIG part of why we think of ourselves as one country and NOT a union of states (the Civil War was a BIG step in this direction as well). If you allow unprofitable airlines to fail, there are side effects. Right now, you can get anywhere pretty easily and pretty cheaply. For a while, the regulated airline market had heavily regulated costs that helped keep all costs "reasonable." The problem with "market forces" is that it ignores externalities. There is an overall economic benefit to having small cities connected to the nation's air travel grid. The nation as a whole benefits, but the airlines are only compensated for some of it. You can't worship at the altar of market capitalism (and you SHOULD) without understanding and appreciating the problems that externalities create. Figuring out how to internalize externalities, which IS a legit role of the government, is VERY tricky business. The more you internalize externalities, the BETTER the market functions. Let me give a hypothetical. Airline A services small towns in 10 states connecting them to business centers. The airline agrees to continue service with a $1 billion bailout because the routes are unprofitable. If the routes result in business of $10 billion, and alternatives like video conferencing would only produce $6 billion dollars, than the airlines are worth $4 billion to society. In this case, it's a no brainer, because it will also generate over $1 billion in tax revenues. What if alternatives would develop $9 billion? Society is a wash on the decision, economically, but the bailout might still make sense because of the side effect of making people in those states live better by being able to vacation. We definitely need churning, but you need to look beyond the sum requested by the company, political ideology, and desire for churning. You need to understand what the full economic consequences are before judging an economic action. Alex Application development and deployment on Open Source Technologies, Feratech [feratech.com].

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This is where the government bailout would help, by allowing access to areas that would be under-served, and allow time for solutions to that problem.

Jeez, pretty hefty rant this early on a Tuesday. Must be fear of sniper-related traffic in DC.

Re:'Little' people would suffer the most (Score:5, Insightful) by albanac on Tuesday October 22, @07:08AM (#4503042) (User #214852 Info | http://www.necrotheque.demon.co.uk/ | Last Journal: Tuesday September 10, @12:01PM)

The companies that go under may be the one's currently providing the 'last mile': services for millions of americans. Note that the companies will go under. No-one will go around digging up the fibre and copper which are already under ground. Companies that fail will have their assets bought by someone who is not failing. Control of the last-mile will move. The companies are trying to avoid corporate failure. The reason there is an argument, at a philosophical level, is not that some companies will die, but that control of the last-mile will move to companies which have a different paradigm entirely. That is what the corporates are trying to make the government fear, not the actual economics of bankruptcy for certain specific players. ~cHris

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• Moore's Law: "The observation made in 1965 by Gordon Moore, co-founder of Intel, that the number of transistors per square inch on integrated circuits had doubled every year since the integrated circuit was invented. Moore predicted that this trend would continue for the foreseeable future. In subsequent years, the pace slowed down a bit, but data density has doubled approximately every 18 months, and this is the current definition of Moore's Law, which Moore himself has blessed. Most experts, including Moore himself, expect Moore's Law to hold for at least another two decades." (read source [webopedia.com])
  
  
• Metcalfe's Law: "A theory argued by Robert Metcalfe, inventor of Ethernet, which states that the power of a network increases by the square of the number of nodes connected to it. For example, where X is the number of nodes, the power of the network is X squared. Metcalfe observed that new technologies are valuable only when large numbers of people use them -- consider how less valuable the telephone would be if only two people in the world used them. The network becomes more valuable the more nodes that are connected to it." (source [webopedia.com])

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• Phone hacking, the next generation [counterpane.com]

This is because every node on the internet can have packets directed at it by any other node. That's the whole point of end-to-end. But that means any joker with a PC can log in to his ISP and start up h4x0r scr1pt5 to start cracking phone switches.

With the current phone system, control signaling is out of band - end users can only control the phones at each end of the connection, and cannot control the functioning of the switches in between. You can command the switches by dialing a number, but you can only route your call this way, not control the basic functioning of the switch.

To a large extent security can be maintained by keeping the telco equipment in securely locked buildings.

But the protocols used for the phone system apparently aren't designed with security in mind, so that when they are adapted to the Internet, they become gaping security holes.

Potentially someone could do some clever work and bring down a whole nation's phone system, if it were on the Internet.

The convergence of the telephone system and the Internet has already been going on for a while. It is quite common for long-distance calls to be routed over the Internet, so you get phone-to-phone VOIP without the user being aware of it.

It is also common for telcos to be ISPs, and they just use the same fiber for voice and data. It's more economical to use the same data formats and protocols for voice as well as data, so they transmit all the voice calls with the Internet Protocol.

I am the Slashdot user formerly known as goingware [slashdot.org].

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But economics, psychologists and other liberal arts types realize that human beings defy "nature" all the time. People who study economics essentially study the cases where economics don't work! Psychologists study why people are not rational/utility maximizers.

As far as the broadband/telecom connection goes, did anyone else read this [businessweek.com] article in Business Week?

It talks about how broadband providers are keeping prices artificially high because they would rather deal with slower adoption rates at higher margins than faster adoption at lower margins because THEY KNOW EVERYONE WILL ADOPT BROADBAND EVENTUALLY and they can force us to pay more. Cable broadband profit margins are about 50 percent now.

Makes you realize how much companies like Comcast can prevent high-speed adoption and screw over the telecoms in the process.

(I canceled my Comcast modem and television service last week. Originally, I just wanted to get rid of the television service, but they told me that if I did, they were going to jack up my cable modem price by $15. I told them to cancel everything.)

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