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Post by Kliquid on Sept 1, 2011 4:06:29 GMT -5
what exactly would be the provisions for the consumer then, if monopolies were made legal? say AT&T was the only phone company in the US, where would the consumer go if the prices were too high? and what would stop AT&T from cranking up prices to where they themselves saw fit rather than what the market wouldve determined it to have been had monopoly stayed illegal? You're missing my point. Monopolies wouldn't happen if there was actually a free market because smaller companies would actually be able to compete with these giant corporations. But with the government's taxes and restrictions on business, these smaller companies simply cannot compete. And what would stop them from massively raising their prices? Well, the fact that people don't NEED cell phones would be one thing. Second, because it'd create an even bigger "need" for a lower-priced alternative. its one thing to say something and its another to know it. how do you know the govt allows and assists corporations like AT&T, Sprint, Verizon, and T-Mobile in dominating the market? and spare the "do your own research" card please Because just about every massive corporation is given huge tax breaks every year which are intended to "create jobs." Unfortunately, these businesses have continued to pocket their profits. so what they could also do to respond to losing those subscribers would be to emulate the people who are taking their customers rather than buying that company up and forcing the consumer back into the arms of these ridiculously expensive phone companies. a much more consumer friendly approach. but obviously, they dont want to lower prices so theyve decided to try and buy up the cheaper alternative, hindering competition rather than encouraging it. what good is capitalism if there isnt any competition behind it? You do realize that the reasons these other companies are succeeding is because they are making more profit, likely mostly because of their higher prices... Right...? Cheaper ≠ profit. the future of the company isnt the only narrative to consider in the story. you must decide the impact the merger will have on the consumer as well and then decide whether or not the American people are better off with or without the merger. You can't just arbitrarily decide, "This isn't good for the American people." By the basic principles of capitalism, if there is a market for a product at a certain price and it can be provided at that price, it will be created... That is, unless there is government interference, which there always is. If we got the government out of the business of trying to control our country's natural economic growth, we would be much better off. But even if you decide that the government has to step in and stop this, you have to ask - Where do we draw the line? If Ford and GM came together and said, "We're raising our prices by double to pay for our growing cost of business and because we can't sustain losing money every quarter," does the government step in and say, "NO, YOU CAN'T RAISE YOUR PRICES!" ? If Pepsi and Coca-Cola decide to merge due to one of them failing to post profits, do we tell them they can't because it'd create a monopoly? If Google wants to buy a slumping Yahoo!, does the government step in and say they can't because there wouldn't be enough search engine competition? It's a completely dangerous situation to say that the government can step in and decide when businesses can merge or not merge. In some cases, the government even encourages large mergers like Wells Fargo purchasing Wachovia. The problem is government interference in the first place. Get them the out and the market will fix itself! and just because the govt can sue AT&T and T-Mobile doesnt mean they have the power to go out and interfere with any and every little matter in all American businesses Yes it does. That's exactly what it means.
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Post by Robert69 on Sept 1, 2011 7:30:45 GMT -5
The fact of the matter is this, IF AT&T purchase T-Mobile, I'll be switching back to that company the day it happens. Right now I have Sprint, the 3rd largest company in America, and I feel like I get anally ravaged on every bill.
But it's going to be that way regardless. As a consumer, I have these options. I can stick with one of the top 4 carriers (soon to be top 3) and pay the price of having acceptable service, or I can do what is cheaper and go with a lesser known service, that quite frankly wont be as good.
I'm going to bite the bullet as an average consumer and go with one of the better companies for a better price. However, T-Mobile in my area sucks. WHEN AT&T purchases them, I'll go back with them because then I'll get the range that AT&T has, which is excellent in my city...
And I'm more willing to pay the price for them than I am for Sprint. UNLESS Sprint can offer me something to stay with them...
THAT is competition in a market that is led by only a few select companies. THAT is what I feel, as your average purchaser, what will keep this market from having happen what Comcast has done to television.
I haven't had cable for 2 years, and there is a reason for that. I had to make the choice, and the service simply was not worth the price point...
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Post by Adam on Sept 1, 2011 8:46:54 GMT -5
Ugh...a new low in government interference.
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Post by roddypiper on Sept 1, 2011 8:53:51 GMT -5
Too bad that's not the case with AT&T. They'll continue to rip people off even after the merge. Well yes, but it's the consumers' fault if they continue to buy the poop product. So small businesses should go under while large corporations flourish, basking in their large handouts and tax breaks from the federal government? Do you really not see the problem with this? And? You don't NEED a "big" cell phone provider. If you do, then you need to deal with their poop. How is that not fair to the consumer? Consumers are under contract, thus the company cannot raise their prices until they want to resign. At that point, the consumer is free to leave and find another, cheaper provider, if they so choose. Businesses raise their prices every ing day. Literally. This isn't some big change. Are you serious? Do you really think that the government pays retail prices for their cell phone plans? That's not a monopoly. An oligopoly, sure, but not a monopoly. Not illegal. Shouldn't be illegal even if it is a monopoly. These things only happen because the government ALLOWS and often even ASSISTS them in happening. If they stopped sticking their noses in things and just let these companies run, there would be actual competition. Obviously they aren't competing very well if they are merging with another company. They have seen a MASSIVE drop-off in their subscribers because they cannot provide the same service that the other companies can, likely due to their lower prices. This is capitalism. now you say, if youre unhappy with the alternative, just support one of the other carriers. do you know how terrible metroPCS is? cricKet? or any other crap phone company outside of CA & AZ? people will be forced to the top 3 because the others are complete crap. purely from the perspective of the consumer, i find it hard to argue in favor of the merger I argue in favor of their ability to do what they want to do with their own business, because it is their ing business and NOT the government's. Allowing the government to decide the futures of companies is a dangerous precedent to set. LOL it said Ratio said this when I did... Anyways, I only have one thing to say. You said the consumer is under contract and you are right. Is it fair for the two companies to merge and drive up prices while in the middle of a contract? No, that is not fair, just as we are expected to honor our end of the deal they should as well. Meaning they should not be allowed to drive up their prices while in the middle of a contract. Thats why a lot of people buy phones through Ebay and do not use an upgrade. If you go to upgrade they will make you change your plan from what people were grandfathered into. I know, I used to work for AT and T
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Post by Mike Giggs' Munchies on Sept 1, 2011 11:14:33 GMT -5
Actually prices could potentially be higher due to lack of competition. Very true. The thing is, whether the prices are going to go up or down, the government has no business stepping in and saying that businesses can or cannot merge. That is, unless said business is receiving money from the government... And then I say that the government needs to get out of the business and let them run independently. If AT&T and T-Mobile merge and prices do go up, the free market would dictate that another company would open/expand to fill the void of the people who cannot afford the AT&T/T-Mobile prices. In theory yes, but in reality no one has the ability to form such a large company in such a short space of time to challenge these guys. That model works well in markets where there are lots of smaller companies (e.g. window cleaning) or where you don't need much to get started (again, e.g. window cleaning) but in a market like mobile phone carriers it doesn't work. Its an oligopolistic market and therefore its likely that this merger would lead to a price rise and lack of competition, which the Governemnt is looking to stop.
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Post by Kliquid on Sept 1, 2011 11:31:22 GMT -5
Anyways, I only have one thing to say. You said the consumer is under contract and you are right. Is it fair for the two companies to merge and drive up prices while in the middle of a contract? No, that is not fair, just as we are expected to honor our end of the deal they should as well. They can't. If the conditions change, you are free to leave the carrier. But you are under contract with them, so the merging company must honor those conditions as well. If you're paying $20/mo now, you will be paying $20/mo then, until you resign your contract. If you go to upgrade they will make you change your plan from what people were grandfathered into. I know, I used to work for AT and T Then you can get out of the contract. Businesses can't be FORCED to allow people to keep the same prices they had in 1993.
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Post by Kliquid on Sept 1, 2011 11:32:52 GMT -5
In theory yes, but in reality no one has the ability to form such a large company in such a short space of time to challenge these guys. That model works well in markets where there are lots of smaller companies (e.g. window cleaning) or where you don't need much to get started (again, e.g. window cleaning) but in a market like mobile phone carriers it doesn't work. Its an oligopolistic market and therefore its likely that this merger would lead to a price rise and lack of competition, which the Governemnt is looking to stop. The companies already exist. They just do not have enough subscribers yet because they do not have a competitive edge on the larger companies. If they keep their prices low, though, while the other large companies get higher; expect to see companies like Boost Mobile's stock go through the roof.
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Post by Mike Giggs' Munchies on Sept 1, 2011 12:12:35 GMT -5
In theory yes, but in reality no one has the ability to form such a large company in such a short space of time to challenge these guys. That model works well in markets where there are lots of smaller companies (e.g. window cleaning) or where you don't need much to get started (again, e.g. window cleaning) but in a market like mobile phone carriers it doesn't work. Its an oligopolistic market and therefore its likely that this merger would lead to a price rise and lack of competition, which the Governemnt is looking to stop. The companies already exist. They just do not have enough subscribers yet because they do not have a competitive edge on the larger companies. If they keep their prices low, though, while the other large companies get higher; expect to see companies like Boost Mobile's stock go through the roof. But at the moment those companies are small and unable to compete. What if someone who lives in rural Wyoming needs a mobile phone to stay in contact with their family in New York, but the only signal they receive is the massively overpriced AT&T or the reasonable T-Mobile. With the merger T-Mobile prices rise and he can't afford it. This kinda stuff happens to a lot of people - I have a similar problem where I live, as the only signal I can get is O2 or Vodafone. It takes a long time for these companies to expand, and in the meantime a lot of people will be hurt. Instead of letting the market become uncompetitive and the competitive again the Government are keeping it competitive.
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Post by "The Visionary" Eldniw on Sept 1, 2011 12:49:06 GMT -5
I still say eff the government interference. A company that obviously cannot maintain day to day operations on the positive side, and are clearly having issues staying afloat are taking measures to ensure that they don't drop off the grid. It happens all the time. Did the government step in when Sprint bought Nextel? Nope. Did the government step in when Vince McMahon paid a paltry $5M for WCW? Nope. Fact is, these mergers happen all the time. And it leaves the world with a little less competition in whatever field of business they happen in. So why stop this one? I highly doubt that prices will do anything, should the merger go through. It's not a monopoly, it wouldn't be a monopoly if it happened, and people would still have a choice. Bet they wouldn't step in if Verizon went to purchase Sprint, as I read an article that said that was likely if Sprint didn't improve.
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Post by Kliquid on Sept 1, 2011 15:25:29 GMT -5
But at the moment those companies are small and unable to compete. They're unable to compete because the government has allowed these large corporations to dominate the market by giving them tax breaks. It's a classic "the rich get richer" scheme. Now they try to step in and play the good-guy role by saying, "We want to keep prices low for the consumers" when the reality is that the prices would be lower if there was more competition to begin with. But because there is a lack of competition, the prices have skyrocketed. But instead of addressing the actual problem, which is too much government interference, we stick our heads in the sand and say, "thank god our government is stepping in to save us from higher prices!" We don't even realize that we've already been duped into paying an asinine price for an often-times very mediocre service. If the government would stay out of things in the first place and stop trying to control the market, we would see MORE competition. What if someone who lives in rural Wyoming needs a mobile phone to stay in contact with their family in New York, but the only signal they receive is the massively overpriced AT&T or the reasonable T-Mobile. Then don't live in rural Wyoming. That's part of the reason people live in cities - so that they have access to technology and other things of the like. People in rural areas already don't have access to things like cable television or internet, in a lot of cases. The companies that do provide cable/internet to rural areas almost always do it at a very high price. But again, that's up to the people who want to live in that area. If you live in a rural area, then you need to understand that not every business is going to cater to you. If one of the services does reach you and you want it, expect to pay a lot because they are using a lot of their funds to provide you that service. Again, simple capitalism. Supply and demand 101. If 20,000 people move to your "rural" city in a year, you can bet your ass that the other companies are going to be wanting to get their service to your area. But if your nearest neighbor is two miles away, you can't really complain when Sprint (or whoever) doesn't put a cell phone tower out there. With the merger T-Mobile prices rise and he can't afford it. This kinda stuff happens to a lot of people - I have a similar problem where I live, as the only signal I can get is O2 or Vodafone. That sucks. You should move somewhere that actually gets cell phone service. It takes a long time for these companies to expand, and in the meantime a lot of people will be hurt. Instead of letting the market become uncompetitive and the competitive again the Government are keeping it competitive. It really doesn't take as long as you think. If Boost Mobile came out in an advertisement and said, "We are offering unlimited plans from $20/mo." while also mentioning that AT&T-Mobile (like that?) are going to charge $120 for the same product... How many people do you think would make the switch? The government makes it difficult for small companies to get bigger because they provide huge tax breaks to large corporations who are given the task to "create jobs" but never held accountable for it. With bigger tax breaks, the large corporations are able to make profits much easier and thus provide their service for cheaper (or make better products than their smaller competitors). If the government got out of it, all of the companies, large or small, would be on an equal playing field.
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Post by extreme on Sept 1, 2011 15:34:20 GMT -5
Smaller businesses can have lower prices which will appeal to some people, that's true, however the big businesses like Verizon, AT&T, and Sprint have much more leverage in making deals with manufacturers to provide the best phones. People these days will transfer to another service to get a specific phone. Look at the iPhone. The only reason people stuck with AT&T or switched over there back then was to get it. Boost Mobile and MetroPC don't have the luxury of having phones that people necessarily want. People will sign with them to pay less, however, a lot of people are going to not want to because they just don't have a line of phones that can keep up.
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Post by Kliquid on Sept 1, 2011 15:37:12 GMT -5
Smaller businesses can have lower prices which will appeal to some people, that's true, however the big businesses like Verizon, AT&T, and Sprint have much more leverage in making deals with manufacturers to provide the best phones. People these days will transfer to another service to get a specific phone. Look at the iPhone. The only reason people stuck with AT&T or switched over there back then was to get it. Boost Mobile and MetroPC don't have the luxury of having phones that people necessarily want. People will sign with them to pay less, however, a lot of people are going to not want to because they just don't have a line of phones that can keep up. So what you're saying is that people are stupid and materialistic, so the government should step in and make sure that you're able to get a new iPhone on your cheap cell phone plan? Look, it's a LUXURY to have a cell phone. It's an even bigger luxury to have an iPhone or an Evo or whatever the hell you want. It's always about cost/benefit. Make a decision with your money, don't expect the government fix the market for you.
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Post by extreme on Sept 1, 2011 15:41:17 GMT -5
Smaller businesses can have lower prices which will appeal to some people, that's true, however the big businesses like Verizon, AT&T, and Sprint have much more leverage in making deals with manufacturers to provide the best phones. People these days will transfer to another service to get a specific phone. Look at the iPhone. The only reason people stuck with AT&T or switched over there back then was to get it. Boost Mobile and MetroPC don't have the luxury of having phones that people necessarily want. People will sign with them to pay less, however, a lot of people are going to not want to because they just don't have a line of phones that can keep up. So what you're saying is that people are stupid and materialistic, so the government should step in and make sure that you're able to get a new iPhone on your cheap cell phone plan? Look, it's a LUXURY to have a cell phone. It's an even bigger luxury to have an iPhone or an Evo or whatever the hell you want. It's always about cost/benefit. Make a decision with your money, don't expect the government fix the market for you. I never said that the gov't should get involved. I'm against it. I'm saying it's not going to be as easy for small businesses as you claim.
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Post by Calcifer Boheme on Sept 1, 2011 15:46:01 GMT -5
This whole thing amuses me because AT&T basically exists because of antitrust laws.
And to say that if we had total free trade this wouldn't happen is kind of silly. That kind of free trade has existed and it created the tycoons and barons of the 1800s, which is why antitrust became a thing. yes, the corporation tax breaks are stupid and should be gotten rid of, but antitrust laws are in place for a good reason.
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Post by Kliquid on Sept 1, 2011 15:47:01 GMT -5
It's a basic free market principle, man...
A certain percentage of people are going to decide, "It's worth it for me to sign a new contract with T-Mobile for $200/mo. so I can keep my iPhone."
There will also be a percentage of people who say, "This is outrageous. I like my iPhone, but I'm not spending that much money. I'll drop down to another phone that still works and might not be as cool, but will be 1/4 as expensive each month on Boost Mobile (I keep using them as an example but there are others)."
If the market dictates that enough people want to keep their iPhones, AT&T-Mobile has made a smart business decision by raising their prices. But if enough people leave, it will force them to lower their prices or deal with significantly less profits than they had before.
Netflix is dealing with almost this exact same scenario right now. They just increased their prices across the board without really adding any sort of extra quality to their service... People were outraged... But are they outraged enough to cancel their service and switch over to a competitor? We'll see.
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Dexter Morgan
Main Eventer
Joined on: Jul 8, 2008 15:30:18 GMT -5
Posts: 3,130
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Post by Dexter Morgan on Sept 1, 2011 15:48:25 GMT -5
Let's be honest. Who REALLY cares? No one, people will continue to pay whatever is asked as long as they have their Iphones and Evos and Droids. People would be lost without them so if anyone is worried of a price increase quit paying the prices no matter what.
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Post by Kliquid on Sept 1, 2011 16:05:11 GMT -5
This whole thing amuses me because AT&T basically exists because of antitrust laws. And to say that if we had total free trade this wouldn't happen is kind of silly. That kind of free trade has existed and it created the tycoons and barons of the 1800s, which is why antitrust became a thing. yes, the corporation tax breaks are stupid and should be gotten rid of, but antitrust laws are in place for a good reason. There has never been a true "free market" in America. But when you're talking about something like cell phone services, there is nothing stopping me from creating my own cell phone company other than investment money and the federal government itself (oh and the fact that I'd have no freakin' idea what I'm doing, but that's beside the point). Technology monopolies cannot exist in a true free market system because people will always be looking for the best "deal" for themselves. Think about it for a second... Let's imagine that AT&T-Mobile have combined to literally take over 100-percent of the cell phone market. They have eaten up or ran Verizon and Sprint out of business. Now they decide, "Let's raise our prices by 500%." There will be public outrage and smart business-people will take advantage of the opportunity by creating their own businesses to compete with the large corporations. Of course, these new business-owners are going to have to be pretty damn rich themselves (likely part of a group of investors), but there will be competition if there is a service that can be provided at or near the public's ideal price point. Take the computer market, for example. There were only a few companies that were creating personal computers in the beginning, and most of them were doing it at a very high profit for themselves. This attracted other companies to the market because they realized that they could provide the same product for a lower cost while still making a profit for themselves. This is the free market at work. Because of the free market, computers are now VERY cheap and most companies make a minimal profit on each product they create. One could say that this is bad for the business, but they are still operating at a profit - just not a massive one any longer. They now have to work SMARTER to figure out ways to lower their costs while maintaining a good enough product to increase or at least continue operating at their same share of the market. This is good for the consumer because it creates lower prices AND better technology simultaneously as the companies compete for our business.
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Post by roddypiper on Sept 1, 2011 16:17:43 GMT -5
Anyways, I only have one thing to say. You said the consumer is under contract and you are right. Is it fair for the two companies to merge and drive up prices while in the middle of a contract? No, that is not fair, just as we are expected to honor our end of the deal they should as well. They can't. If the conditions change, you are free to leave the carrier. But you are under contract with them, so the merging company must honor those conditions as well. If you're paying $20/mo now, you will be paying $20/mo then, until you resign your contract. If you go to upgrade they will make you change your plan from what people were grandfathered into. I know, I used to work for AT and T Then you can get out of the contract. Businesses can't be FORCED to allow people to keep the same prices they had in 1993. This is besides the point... but... I am pretty sure cell phone service is cheaper now than in 93... my dad bought his first cell phone in 86...when they were installed in cars... it was like 3 grand..just saying
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Post by Kliquid on Sept 1, 2011 16:28:05 GMT -5
This is besides the point... but... I am pretty sure cell phone service is cheaper now than in 93... my dad bought his first cell phone in 86...when they were installed in cars... it was like 3 grand..just saying I was exaggerating. Some people are on older plans, though, which are cheaper and provide less of a service; is my point. The businesses don't have to keep allowing people to stay on these plans, though, unless it's written into their contract that the consumer has a right to extend the plan.
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Post by BØRNS on Sept 1, 2011 23:58:11 GMT -5
This merger is more important than you think.
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