{"id":1584,"date":"2009-08-19T10:15:57","date_gmt":"2009-08-19T10:15:57","guid":{"rendered":"https:\/\/discovery.org\/tech\/2009\/08\/19\/wall_street_journal_guest_colu\/"},"modified":"2024-10-15T21:56:50","modified_gmt":"2024-10-15T21:56:50","slug":"wall_street_journal_guest_colu","status":"publish","type":"post","link":"https:\/\/www.discovery.org\/tech\/2009\/08\/19\/wall_street_journal_guest_colu\/","title":{"rendered":"Legacy regulation killed Google Voice"},"content":{"rendered":"

Reacting to Apple’s decision to not allow Google Voice for the iPhone, Wall Street Journal<\/i> guest columnist Andy Kessler complains<\/a>,<\/p>\n

It wouldn’t be so bad if we were just overpaying for our mobile plans. Americans are used to that–see mail, milk and medicine. But it’s inexcusable that new, feature-rich and productive applications like Google Voice are being held back, just to prop up AT&T while we wait for it to transition away from its legacy of voice communications. How many productive apps beyond Google Voice are waiting in the wings?<\/p><\/blockquote>\n

So Kessler proposes a “national data plan.”
\nBefore we get to that, Kessler complains that margins in AT&T’s cellphone unit are an “embarrassingly” high 25%. He doesn’t point out that AT&T’s combined<\/i> profit margin — taking into account all products and services — is only 9.66%.
\nAT&T is actually earning less now than it was legally entitled to earn when fully regulated — 9.66% versus 11.75%.
\nDon’t fall for the myth that AT&T killed Google Voice.
\nThe truth is regulators are quietly expropriating wireless profits to hold prices for regulated services like plain old telephone service artificially low.
\nThis has always been how the game is played. Regulation has kept prices for basic phone service at or near the bare cost providers incur to offer the service, forcing providers to chase profits elsewhere.
\nIn a normal business, an unprofitable product or service would disappear. But telecom providers are still required by law to provide plain old telephone service to anyone who requests it. It’s called the “carrier of last resort” obligation. Believe it or not, providers are still required to provide copper-based, circuit switched phone service in many places, even though they could cut costs by deploying fixed wireless and VoIP to deliver basic phone service.
\nThis service obligation imposes a tax on those of us who have cancelled our landline service in favor of our cellphones in the form of artificially high prices for wireless service.
\nKessler offers one solution, but before we get to that, I’ve got a simpler one.
\nThe solution is to give providers full freedom to set prices and choose their own technology. Yes, I mean freedom to raise<\/i> prices for basic phone service so cellphones don’t have to subsidize it, because<\/i> cellphone providers who are affiliated with landline units could afford to lower their prices.
\nDon’t lose me here: Cellphone providers would<\/i> lower their prices, because every time prices fall subscribers consume more minutes of use.
\nKessler favors a more convoluted plan, which I will admit is more practical politically than my own:<\/p>\n