EU does something useful - Dan faints

I'll just add quickly that I fancy a new mobile, wouldn't mind a Blackberry - since it may only cost Blackberry £30 to make one and they're selling it for £300, can I have the government come in and make it £90? Sounds great doesn't it? but as the numerous examples of price controls shown in the CATO document I linked to show - it distorts the market, creates unintended consquences and solidifys a monopoly. One other example is this - that I would like to know of those who sold sweets on the playground when they were in school, did they limit themselves to a certain profit of say 10p per chocolate bar sold? or did they sell for the highest that they could possibly get? .... like every single business in history.

Government intervention in business is FUN and always works out for the best...........

Oh interesting coincidence as I open up tumblr:

http://25.media.tumblr.com/tumblr_m3...tm3ao1_500.jpg

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Originally Posted by -:Undertaker:-

In regards to a monopoly, which I know will be your responses to what i've posted below - how do you think most monopolies arise in the first place? government regulation such as price controls.

I will give one example of the water companies which i'm familiar with. A great deal of people blame the water companies for being too greedy and charging too much for the droughts and shortages we have. This, on the face of it seems rational and it would then seem rational to have the water companies prices regulated and have the government even nationalise them. But this is a false argument, because if you look at the water companies in this country - it has been the government who have regulate the companies to the extent that only a few companies exist and are unable to build backup lakes due to government regulation.

If I manage to open a new mobile operating company (which, with the amount of regulations if very difficult) and I offer a better service but for a higher price (which I also need to do to recover my costs of investing in the first place) - you are preventing me from doing this. You thus prevent the market finding its correct value and you distort it, serving only to enforce the monopoly that the main companies at the top have because they then cannot be displaced by new rivals. I mean, why do you think so many large companies support (via lobbying) candidates and governments which want regulation? because it helps cement those at the top in their place.

It is the classic law of unintended consquences, you only serve to reinforce the monopoly.





Yeah you're both right actually, lets regulate prices - worked well in the 1970s didn't it? why not extend it to televisions, energy, fast sports cars, football kits, clothes, iPods? hell, lets just nationalise everything!

If you seriously believe price regulation by the state (de facto nationalisation) works then frankly, well I don't even know what to say.

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You're making yourself out to be a moron if you're suggesting we regulate EVERYTHING on the market, of course we shouldn't, that would be ridiculous. What isn't ridiculous though, is regulating natural resources, basic amenities and "public" services. Consumer product prices regulate themselves, if everyone suddenly whacked their TV prices up, one company is going to take advantage of this and offer them at a lower price whilst demand falls due to the expense, it just wouldn't happen.

Regulating public services on the other hand (which SHOULD include water companies in my opinion) is a fantastic idea, especially from a technical standpoint (you bring up the case of starting a new mobile network, go ahead, Giff Gaff managed it by using other people's networks. Now, if you want to setup your own network, beg Ofcom like Three did who got massive discounts on frequency space because of their smaller size back in the day) because it means everything works properly for a start, and from a monetary standpoint, it means we aren't all paying £100 a month for basic mobile service.

You can't put an exact price on a recurring service with very few companies because the market cannot regulate itself in this case (oh look, which is the case with roaming data abroad, funny that).

A great example of some lovely regulation is the fuss O2 and Vodafone are kicking up because of Everything Everywhere's ability to get a new LTE network up wayyyy ahead of them, thus creating a monopoly providing a much faster service before O2 and Vodafone could physically do it. Ofcom have stepped in and are currently assessing the situation, otherwise we'd have law suits flying around and consumer service would get hurt in the process.

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Originally Posted by Recursion

You're making yourself out to be a moron

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There is no need to directly insult me because while your argument may be simple minded, ill thought and thus moronic, I very much doubt you are a moron yourself.

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Originally Posted by Recursion

..if you're suggesting we regulate EVERYTHING on the market, of course we shouldn't, that would be ridiculous. What isn't ridiculous though, is regulating natural resources, basic amenities and "public" services. Consumer product prices regulate themselves, if everyone suddenly whacked their TV prices up, one company is going to take advantage of this and offer them at a lower price whilst demand falls due to the expense, it just wouldn't happen.

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I just gave the key example of water, a natural resource, and how government involvement and regulation (for the good of course as it the reason always given) has actually pushed up prices and led to the water shortages we have now yet you've completely ignored it. And besides, doesn't government regulate of natural resources de facto mean regulation of everything else indirectly?

Quote:

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Originally Posted by Recursion

Regulating public services on the other hand (which SHOULD include water companies in my opinion) is a fantastic idea, especially from a technical standpoint (you bring up the case of starting a new mobile network, go ahead, Giff Gaff managed it by using other people's networks. Now, if you want to setup your own network, beg Ofcom like Three did who got massive discounts on frequency space because of their smaller size back in the day) because it means everything works properly for a start, and from a monetary standpoint, it means we aren't all paying £100 a month for basic mobile service.

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Then you need to read up on the water companies and the involvement of EU regulation and Whitehall regulation which has led to the absolute mess we have now. In addition to that, a read of the CATO document of historical price controls (which I seriously doubt you managed to read or bothered to read) wouldn't go amiss nor would a look at how nationalised industry performed/performs in 1940s Britian to 1970s Britain/the Soviet Union.

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Originally Posted by Recursion

it means we aren't all paying £100 a month for basic mobile service.

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I don't want to pay £300 for a Blackberry, where is my regulation for a basic mobile that I desire?

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Originally Posted by Recursion

You can't put an exact price on a recurring service because the market cannot regulate itself in this case.

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Can I ask what no regulation actually means? does it mean business doing what it wants and creating a produce/profit (the purpose of business) and regulation meaning what you want? that's the definition truly, isn't it? can I ask you what makes you think you have a 'right' to force the owners of a company and service which they own to offer a price you find suitable? you have no such right my friend.

You do however have the right to set up your own company and rival the existing monopoly - which would be made far easier (or even possible) without all the regulations you yourself put into place on other companies but which now directly also apply to you. As a small business, you are thus prevented from charging a higher price for a newer (and even better service) because you have enforced price controls leaving you unable to recoup your investment = thus a monopoly is created.

Quote:

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Originally Posted by Recursion

A great example of some lovely regulation is the fuss O2 and Vodafone are kicking up because of Everything Everywhere's ability to get a new LTE network up wayyyy ahead of them, thus creating a monopoly providing a much faster service before O2 and Vodafone could physically do it. Ofcom have stepped in and are currently assessing the situation, otherwise we'd have law suits flying around and consumer service would get hurt in the process.

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The only reason lawsuits are involved is because of the mess regulation causes, ie again - water companies and shortages in the United Kingdom as of 2012.

Oh what a web we weave..

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Originally Posted by -:Undertaker:-

There is no need to directly insult me because while your argument may be simple minded, ill thought and thus moronic, I very much doubt you are a moron yourself.



1. I just gave the key example of water, a natural resource, and how government involvement and regulation (for the good of course as it the reason always given) has actually pushed up prices and led to the water shortages we have now yet you've completely ignored it. And besides, doesn't government regulate of natural resources de facto mean regulation of everything else indirectly?



2. Then you need to read up on the water companies and the involvement of EU regulation and Whitehall regulation which has led to the absolute mess we have now. In addition to that, a read of the CATO document of historical price controls (which I seriously doubt you managed to read or bothered to read) wouldn't go amiss nor would a look at how nationalised industry performed/performs in 1940s Britian to 1970s Britain/the Soviet Union.



3. I don't want to pay £300 for a Blackberry, where is my regulation for a basic mobile that I desire?



4. Can I ask what no regulation actually means? does it mean business doing what it wants and creating a produce/profit (the purpose of business) and regulation meaning what you want? that's the definition truly, isn't it? can I ask you what makes you think you have a 'right' to force the owners of a company and service which they own to offer a price you find suitable? you have no such right my friend.



5. The only reason lawsuits are involved is because of the mess regulation causes, ie again - water companies and shortages in the United Kingdom as of 2012.

Oh what a web we weave..

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1. I'm not going to pretend I know a whole lot about out water situation (it's ridiculous that we're using 'for profit' companies for this, but hey **! Same goes for energy (and lol, the joke of a UCAS service), perhaps these should be nationalised... so long as we don't end up with massive amounts of wind farms) so I can't really say too much on it.

2. I really don't want to read something like that at 2am on a Saturday morning, especially when I have far more reading to do on a project I have due in a week and a half

3. A mobile phone is a consumer device, the prices regulate themselves. An iPhone is worth £500 because when Apple priced it, they knew consumers would pay it, obviously people weren't buying it, they would lower the price. It's simple supply and demand. I'm not sure where you plucked the £30 manufacturing cost from, but it's quite obviously a mobile phone costs a fair amount more than that to manufacture after research, design, materials, processing, assembly, testing, marketing, sale etc. Also, hence why a lot of networks will subsidise the cost of a phone with a contract, if you don't want to pay so much for a phone, you can take out a monthly contract with a subsidised phone cost.

4. "No regulation" to me would mean no government involvement, let companies do whatever the hell they like, whilst regulation (again, to me) would mean protecting the consumer from ridiculous profit margins and greedy shareholders. Lets go back to mobile data, like this thread is about. How do you put a price on data? It's an intangible good. The network provides the medium (copper, and an allocated frequency by... Ofcom!) to process and transfer this data, so you pay for the installation and maintenance of said equipment, but what price do you put on a data packet? Someone needs to be around to regulate that.

5. Law suits don't come around from regulation, generally anyway. Law suits generally come form two types of business. A, where someone sees something good happening elsewhere and wants a slice of the action, usually limiting product growth and limiting technological advancements. And then B, where a company has generally fallen fowl somewhere (perhaps due to a regulator in fact, which can also become part of a law suit) that legitimately needs fixing (ala O2 and Vodafone falling behind EE on LTE rollout).

Anywhos, tomorrow needs to be a productive day for me. Good night!

Quote:

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Originally Posted by Recursion

1. I'm not going to pretend I know a whole lot about out water situation (it's ridiculous that we're using 'for profit' companies for this, but hey **! Same goes for energy (and lol, the joke of a UCAS service), perhaps these should be nationalised... so long as we don't end up with massive amounts of wind farms) so I can't really say too much on it.

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You think the state doesn't and won't run these companies for profit? do you honestly believe that? the key difference is, because everything runs on a profit, whether state appointed bureaucrats appointed not on expertise but political position can do a better job than those with knowledge of the industry wanting consumers to choose their business over rivals? who do you think will provide the better service?

Because both are out to make profit, it's simply a matter of choosing the more competent one.

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Originally Posted by Recursion

2. I really don't want to read something like that at 2am on a Saturday morning, especially when I have far more reading to do on a project I have due in a week and a half

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Something for you to bookmark then.

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Originally Posted by Recursion

3. A mobile phone is a consumer device, the prices regulate themselves. An iPhone is worth £500 because when Apple priced it, they knew consumers would pay it, obviously people weren't buying it, they would lower the price. It's simple supply and demand. I'm not sure where you plucked the £30 manufacturing cost from, but it's quite obviously a mobile phone costs a fair amount more than that to manufacture after research, design, materials, processing, assembly, testing, marketing, sale etc. Also, hence why a lot of networks will subsidise the cost of a phone with a contract, if you don't want to pay so much for a phone, you can take out a monthly contract with a subsidised phone cost.

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A mobile phone is a service/product as is the network/service which it runs on. The example I gave of the Blackberry is randomly picked out of the air, but yes companies make profits of those proportions - so on the basis that you think services should be regulated, why shouldn't mobile phone prices be regulated? the argument you give for this EU ruling is to 'protect consumers' in other words 'use the state to force a company to charge the price I deem fit/the lowest price possible' - why can this not be applied to everything, from bread to sugar, to mobile phones and football kits?

Why? because history shows that it does not work.

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Originally Posted by Recursion

4. "No regulation" to me would mean no government involvement, let companies do whatever the hell they like, whilst regulation (again, to me) would mean protecting the consumer from ridiculous profit margins and greedy shareholders.

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And you are not greedy? when you sell your car on, do you not try and charge the highest possible price that the consumer is willing to pay? to do otherwise is an act of charity and a business is not a charity. I again go back to the sweets example on the playground. In the words of Milton Friedman "..of course none of us are greedy, it's always the other fella who is greedy".

It seems to me that you use the word greedy as an excuse to have something forcibly made cheaper, which I argue is on the level of theft (which is true greed).

Quote:

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Originally Posted by Recursion

Lets go back to mobile data, like this thread is about. How do you put a price on data? It's an intangible good. The network provides the medium (copper, and an allocated frequency by... Ofcom!) to process and transfer this data, so you pay for the installation and maintenance of said equipment, but what price do you put on a data packet? Someone needs to be around to regulate that.

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It is a service which they provide/use which you choose to buy.

Quote:

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Originally Posted by Recursion

5. Law suits don't come around from regulation, generally anyway. Law suits generally come form two types of business. A, where someone sees something good happening elsewhere and wants a slice of the action, usually limiting product growth and limiting technological advancements. And then B, where a company has generally fallen fowl somewhere (perhaps due to a regulator in fact, which can also become part of a law suit) that legitimately needs fixing (ala O2 and Vodafone falling behind EE on LTE rollout).

Anywhos, tomorrow needs to be a productive day for me. Good night!

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A shows to me exactly how your priorities are wrong, indeed regulation which comes to support your point on A is exactly what denies new rivals from breaking a monopoly - it creates a monopoly.

Firstly the article you linked is completely irrelevant because it only discusses price controls in terms of good but we are talking about services - the two are different. Not to mention the bias of the organisation who published the article..

Also the barrier to entry of setting up a mobile phone company has nothing to do with roaming charges. The main barrier to entry would be the infrastructure needed to provide the service to the whole of the country. You mention monopoly but there is no monopoly, we have an oligopoly in the UK in terms of mobile phone service providers. What I don't think you understand is that roaming charges are mostly artificial charges levied on mobile phone service providers by other mobile phone service providers for use of their network that are then passed on to customers. These charges are substantially higher than what is actually costs to process the call/text/data. If you actually look at the limits on wholesale pricing for roaming charges (i.e what other networks charge each other for use of their network) you'll see that in some cases the charges are still higher than what they would charge their owns customers on their network.

The price controls are really only to remove the artificial price inflation on roaming charges set up between the mobile phone service providers which I don't see how you can see as a bad thing as it almost amounts to indirect price fixing.

Also there is no link between the quality of your service and roaming charges. You might provide a excellent service with 100% coverage anywhere in the country and charge a higher price to your customers in your home country. Fine. Now think what roaming charges actually are. They are the cost to a customer to use their mobile phone on another mobile phone provider's network that is not their normal network. Their normal network has no control over the quality of the other mobile phone network's service and no matter if they did roaming for free or it cost a million pounds a minute for calls they are not going to get any better or worse.

Quote:

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Originally Posted by -:Undertaker:-

In regards to a monopoly, which I know will be your responses to what i've posted below - how do you think most monopolies arise in the first place? government regulation such as price controls.

I will give one example of the water companies which i'm familiar with. A great deal of people blame the water companies for being too greedy and charging too much for the droughts and shortages we have. This, on the face of it seems rational and it would then seem rational to have the water companies prices regulated and have the government even nationalise them. But this is a false argument, because if you look at the water companies in this country - it has been the government who have regulate the companies to the extent that only a few companies exist and are unable to build backup lakes due to government regulation.

If I manage to open a new mobile operating company (which, with the amount of regulations if very difficult) and I offer a better service but for a higher price (which I also need to do to recover my costs of investing in the first place) - you are preventing me from doing this. You thus prevent the market finding its correct value and you distort it, serving only to enforce the monopoly that the main companies at the top have because they then cannot be displaced by new rivals. I mean, why do you think so many large companies support (via lobbying) candidates and governments which want regulation? because it helps cement those at the top in their place.

It is the classic law of unintended consquences, you only serve to reinforce the monopoly.





Yeah you're both right actually, lets regulate prices - worked well in the 1970s didn't it? why not extend it to televisions, energy, fast sports cars, football kits, clothes, iPods? hell, lets just nationalise everything!

If you seriously believe price regulation by the state (de facto nationalisation) works then frankly, well I don't even know what to say.

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Originally Posted by Tomm

Firstly the article you linked is completely irrelevant because it only discusses price controls in terms of good but we are talking about services - the two are different.

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The only difference between goods and services is the physical element, other than that nope.

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Originally Posted by Tomm

Not to mention the bias of the organisation who published the article..

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Really? there's bias in a document that supports the free market?

Quote:

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Originally Posted by Tomm

Also the barrier to entry of setting up a mobile phone company has nothing to do with roaming charges. The main barrier to entry would be the infrastructure needed to provide the service to the whole of the country. You mention monopoly but there is no monopoly, we have an oligopoly in the UK in terms of mobile phone service providers. What I don't think you understand is that roaming charges are mostly artificial charges levied on mobile phone service providers by other mobile phone service providers for use of their network that are then passed on to customers. These charges are substantially higher than what is actually costs to process the call/text/data. If you actually look at the limits on wholesale pricing for roaming charges (i.e what other networks charge each other for use of their network) you'll see that in some cases the charges are still higher than what they would charge their owns customers on their network.

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What is this use of the phrase 'artifical charges'? do you not realise that everything in business is an 'artifical charge' once the cost of developing and producing the product reaches £0? the phrase you should be using and would be using say if you sold a car for the highest price possible is profit. If you do not like the costs, then do not use the service.

It really is that simple.

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Originally Posted by Tomm

The price controls are really only to remove the artificial price inflation on roaming charges set up between the mobile phone service providers which I don't see how you can see as a bad thing as it almost amounts to indirect price fixing.

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Price fixing doesn't matter if the market is deregulated enough to allow new rivals to emerge. If price fixing exists in a market then you know it is over regulated because they can charge anything they want without fear of a new rival coming and offering either a better service or a cheaper service (or both).

Quote:

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Originally Posted by Tomm

Also there is no link between the quality of your service and roaming charges. You might provide a excellent service with 100% coverage anywhere in the country and charge a higher price to your customers in your home country. Fine. Now think what roaming charges actually are. They are the cost to a customer to use their mobile phone on another mobile phone provider's network that is not their normal network. Their normal network has no control over the quality of the other mobile phone network's service and no matter if they did roaming for free or it cost a million pounds a minute for calls they are not going to get any better or worse.

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Don't use your phone then if you're going to be charged for it and you deem it unacceptable, duh.

@-:Undertaker:-;

There are regulations for a reason. Pure capitalism and the idea of a free market have one major flaw, eventually all money will end up in the hands of a few whilst the rest are poor. Regulations prevent consumers being exploited and being forced to pay extreme prices.
Heck, should we remove health and safety regulations from kitchens? I’m pretty sure you’d come complaining when one of your loved ones dies from salmonella or cholera or would it be for the greater good because government regulation is pure evil :rolleyes:

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Originally Posted by The Don

@<a href="http://www.habboxforum.com/member.php?u=24233" target="_blank">-:Undertaker:-</a>;

There are regulations for a reason. Pure capitalism and the idea of a free market have one major flaw, eventually all money will end up in the hands of a few whilst the rest are poor. Regulations prevent consumers being exploited and being forced to pay extreme prices.

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No it doesn't, indeed the effect has been the opposite since the pre-Industrial Revolution .. before the Industrial Revolution the few very Lords held the wealth and the peasants had next to none, with the Industrial Revolution this changed with the educated (but who otherwise would have been poor) inventing and producing which then led to workers conditions improving gradually. The best example of this today I can give you is the case of China and India - India is a very restrictive market with numerous regulations to improvement workers conditions whereas China is vastly more free. Yet ask this of yourself, would you rather be a worker in China or India?

The poor to wealthy pattern you describe today however is a product of our monetary system, not the free market.

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Originally Posted by The Don

..being forced to pay extreme prices.

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Nobody forces you to buy anything, well, except the government through nationalisation.

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Originally Posted by The Don

Heck, should we remove health and safety regulations from kitchens? I’m pretty sure you’d come complaining when one of your loved ones dies from salmonella or cholera or would it be for the greater good because government regulation is pure evil :rolleyes:

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It depends what you class as health and safety, this video explains it [the role of the government and its courts in the economy/health and safety] much better than I can.

http://www.youtube.com/watch?v=cD0dmRJ0oWg

"..what i'm trying to say to you, is that these things are a little more sutle and sophisticated than you are at first led to believe."