| Profit is a matter of accounting. The telcos specifically are incentivized to have as little calculated profit as possible. Their subsidies and ability to charge different rates is partially based on their accounting. So they play Hollywood accounting tricks (https://en.m.wikipedia.org/wiki/Hollywood_accounting). They have been chastised on this repeatedly. For instance, "The FCC Had To Remind ISPs Not To Spend Taxpayer Subsidies On Booze, Trips To Disney World" (https://www.techdirt.com/articles/20151022/09232532594/fcc-h...) here, the $1,300,000 spent by an executive to buy a house for their children's use as college housing wasn't part of the profit. That's simply the cost of running business, as essential as keeping the lights on ... nothing wrong with the twice a week $96,000/year massages either, I'm sure that's got a lot to do with FTTH residential deployment. Oh wait, the taxpayers built that. This has happened a few times, such as with verizon (https://www.huffpost.com/entry/are-the-salaries-of-veriz_b_9...) where the 4 top executive pay (without benefits) was $41 million ... which would have been fine if it was in their operating expense and they could afford it. But they did this because it wasn't and they couldn't. If the telcos make something called "Local Service" unprofitable when compared with "Corporate Operations Expense" (which includes jets, multiple homes, multi-million executive pay, etc) and technically run "at a loss" they can legally raise prices and reduce service. Because they can make things look unprofitable, federal regulation permits them to raise prices to make up for it. It's an perverse incentive, an executive spends $100,000 a year on pet care to make sure local service becomes unprofitable and then they can use a legal procedure to raise prices. rinse, wash, and repeat. So yes, it could be 1/4th the price but no, the free market is the most efficient allocator of goods, we're told. They do things the cheapest we're told, there is no alternative ... yeah, bullshit. High speed internet is $7.67/month in Russia, $5.41 in Ukraine, $6.12 in Venezuela and $63.07 in the USA. Ah, the magic of trusting the market. Can you feel it!? |