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Response to usrname (Reply #9)

Tue Apr 10, 2012, 12:44 PM

11. I think your response is misleading.

Trying to do an accounting of capital expenditures for the cell phone industry
involves so much more than the cost of building towers. (And to even mention
that they don't manufacture the phones that use their networks is like suggesting
that because oil companies don't manufacture automobiles or trucks, there is a
'variable cost' penalty that Exxon or Mobile must constantly monitor, as if it were
a part of their own operations.)

The reality is that between deregulation and lax compliance enforcement from
government, the return on investment has never been higher for cell phone companies:

Here are 4 paragraphs from an Alternet article that lay out more of the real
picture:

http://www.alternet.org/story/148397/how_the_phone_companies_are_screwing_america%3A_the_$320_billion_broadband_rip-off?page=entire

In order to understand how the broadband con works, it is useful to examine how it has played out in one state and extrapolate this to the other 49 states. In this case, we will examine New Jersey as representative of a nationwide policy.

New Jersey state law requires that by 2010, 100 percent of the state is to be rewired with 45-mbps, bi-directional service. To meet this goal, Verizon collected approximately $13 billion in approved rate increases, tax break and other incentives related to upgrading the Public Switched Telephone Networks. To cover its tracks, Verizon submitted false statements year after year, claiming that it was close to fulfilling its obligations. For example, in its 2000 Annual Report, it claimed that 52 percent of the state could receive "45-mbps in both directions or higher."

Based on such false claims, Verizon has benefited for significant pricing increases for essentially inexpensive computerized services. For example, Call Waiting and Call Forwarding cost less then $.01 cent to offer yet the company charges $4-$7 for such features. In addition, fees for inside wiring went up to $7.00 from $1.25.

The company also benefited from more invisible perks. It secured massive write-offs on its network even though it wasn't being replaced; it actually secured a write-off of over 105 percent above the amount of construction. These write-offs helped save it billions in taxes. These factors have helped significantly heighten the company's Return on Equity, the standard measurement of profits, jump from 12-14 percent before deregulation to 30-40 percent.

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Arrow 19 replies Author Time Post
kpete Apr 2012 OP
ProgressiveProfessor Apr 2012 #1
uponit7771 Apr 2012 #12
belcffub Apr 2012 #2
uponit7771 Apr 2012 #13
belcffub Apr 2012 #14
ProgressiveProfessor Apr 2012 #19
mojowork_n Apr 2012 #3
leftyohiolib Apr 2012 #4
mojowork_n Apr 2012 #5
leftyohiolib Apr 2012 #10
saras Apr 2012 #6
ProgressiveProfessor Apr 2012 #15
accord99 Apr 2012 #17
Egalitarian Thug Apr 2012 #7
ProgressiveProfessor Apr 2012 #16
marshall gaines Apr 2012 #8
usrname Apr 2012 #9
LineLineNew Reply I think your response is misleading.
mojowork_n Apr 2012 #11
facultyandstaffshow Apr 2012 #18
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