I recently moved and found a way to tell whether a company is a monopoly or not. The discovery was due to my attempts to change my address with the utilities companies. I called my garbage collector, Waste Management, and cancelled the service without any hassle. The lady over the phone was friendly and didn't even asked why. The conversation with my cable company, Comcast, was totally different. Not that the guy was rude, but that the guy tried extremely hard to keep me as their customer. In the end, I decided to stay with Comcast, but got a call a couple of days later. They wanted me to upgrade to premium lineup with HBO for one dollar more per month! The deal was attractive, maybe too attractive for a graduate student. I didn't upgrade because it is really hard to squeeze HBO into my already tight TV-watching schedule.
So my finding is that if the breakup with your service provider is extremely difficult or sometimes painful, chances are the service provider isn't a monopoly. Well, who doesn't like a no-hassle cancellation? But I would always prefer money saving to a friendly conversation with an old lady. Comcast cut my bill after our hard bargaining. I save $120 over one year!
Public utilities need to be regulated because they are monopolies by nature. Only monopolies can take advantage of network externalities, so says the economics. Regulations can drive utilities companies to do crazy things (or nice things). Except for tobacco companies, utilities companies are probably the only businesses that tell customers to consume less of their products. It never makes sense to me, but that is your tax dollar/politicians at work. Of course, the regulations include a mandate to have a friendly conversation with your customers who are breaking up with you.
That is all good, but I still love the money more. With the technology catching up, more and more former monopolies are now facing fierce competition. Not a very long time ago, Comcast is still one of the highly regulated monopolies. Nothing sounds better than competition to a free-marketer like me. So, if one day we have difficulties to break up with Waste Management or PG&E, we know that technology has helped free market conquer another territory!
(Picture: screwyou.thezeroboss.com)
2 comments:
Who drew the picture? So good! You must have lots of things to move. Everytime when I move, I think human beings consume too much material. We may have to know what is WANT and what is NEED. And I found I waste more and more.
Don't worry! Capitalism is at work and working pretty well.
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