Saturday, May 24, 2008

Deregulation - corporate gain, consumer's bane

By Libby

I remember when the cable industry was pushing for deregulation way back in 1996, we were told this would be a boon for consumers. They told us that we would enjoy a vastly greater variety of choices and that competition would force prices down. Unsurprising they lied. It didn't save us money then and all we received in return were hundreds of more stations that aren't worth watching but we're forced to buy as part of a service package. Today, over ten years later, the cost increases are even greater and farther removed from any inflationary explanation.

They told us the same thing about electricity deregulation and that turned out to be an even bigger disaster. At least the cable companies upgraded their equipment. The electric companies raised rates and allowed the infrastructure to deterioate in favor of short term profits. We won't appreciate the full scope of this until the system fails, which seems to be a matter of not if, but when.

Keep this in mind when people tell you that all regulation is bad and to trust the free market.

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2 Comments:

Blogger rockync said...

While I'm usually an advocate of a smaller, less involved government, I do see the need and benefits of well written, sensible regs for industry sectors in order to protect national and public interests. The phone companies are the ones that get me. Remember when Ma Bell was the only game in town? Signal was clear and rates were cheap. Then came the "it's a monopoly" bogey and we have never had a decent phone service since then. The real question is who decides and how they should decide what to regulate. There's always a hidden agenda.

3:52:00 PM  
Blogger Libby Spencer said...

I remember swearing I would never use Ma Bell when they broke up that monopoly and then it turned out they were the only ones that offered a decent service even though their customer service sucked. And breaking up the monopoly didn't lower the rates. I realized then that corporate America was going to screw us no matter what.

7:10:00 PM  

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