Comment Re:Disintegration of the Bell System (Score 1) 118
"The former Bell companies are following the example of American rail and steel companies, milk the system for cash and let the infrastructure rot in place"
I'm afaid this analogy is rather unaccurate for several reasons. Contrary to traditional blue-collar rhetoric, neither the rail empires nor the steel magnates voluntarily let their infrastructure crumble in order to maximze their profits.
The construction of America's interstate system in the 1940's and 50's brought with it an explosion in cheaper (relative to rail) freight service via large trucks. This major blow to the railroad's traditonal revenue streams, long-distance freight service, precipitated an almost complete collapse of most publicly owned rail systems in less than a decade. (read::Conrail)
As for steel, the late 1970's and early 80's trend towards increased unionization made it more economically rational for firms to buy raw steel imported from South America and Southern Asia where reduced labor costs brought the total costs to less than 1/5 of the domestically produced alternative. Perhaps if more capital was invested
in automation (read::South Asia), the decline of American steel could have been averted.
The demise of both examples is a result of obsolence brought about by technolgical change. The telcos are probably immune to any similar paradigm shift as they will own exclusive rights to whatever technology replaces the current telecommunications infrastructure (this include wireless since the telcos have invested ungodly sums of money to "rent" most of the usefull UHF and microwave spectrums).
I'm afaid this analogy is rather unaccurate for several reasons. Contrary to traditional blue-collar rhetoric, neither the rail empires nor the steel magnates voluntarily let their infrastructure crumble in order to maximze their profits.
The construction of America's interstate system in the 1940's and 50's brought with it an explosion in cheaper (relative to rail) freight service via large trucks. This major blow to the railroad's traditonal revenue streams, long-distance freight service, precipitated an almost complete collapse of most publicly owned rail systems in less than a decade. (read::Conrail)
As for steel, the late 1970's and early 80's trend towards increased unionization made it more economically rational for firms to buy raw steel imported from South America and Southern Asia where reduced labor costs brought the total costs to less than 1/5 of the domestically produced alternative. Perhaps if more capital was invested
in automation (read::South Asia), the decline of American steel could have been averted.
The demise of both examples is a result of obsolence brought about by technolgical change. The telcos are probably immune to any similar paradigm shift as they will own exclusive rights to whatever technology replaces the current telecommunications infrastructure (this include wireless since the telcos have invested ungodly sums of money to "rent" most of the usefull UHF and microwave spectrums).
