It’s even better: a lot of essential or close to it things are pretty much monopolies or cartels (for example, Internet access in most of the US) so people have no actual choice but to pay a specific entity whatever they chose to charge.
It’s like tax but without the upside of taxes (which is that they’re money that’s supposed to entirely end up benefiting you, even if most of it indirectly) because when you buy a product or service from a monopoly or cartel only part of it goes to cover the cost of the actual product or service you’re getting and a large fraction or even most of it goes to shareholder dividends, which has zero benefit for you.
I’ve taken to call these things Taxes Paid Directly To Private Companies.
Horizontal Territory Allocation is a common practice with Oligopolies with physical products (which the telephone wires and routing equipment they build to run the internet very much is).
Basically two or three massive companies simply don’t enter eachothers turf by unspoken agreement and they all get to benefit by not actually competing with eachother. They they can take turns raising prices in their own turf and know their customers have to physically move to get their “competitors” prices. As long as they never actually talk to eachother about doing it it is technically not illegal.
As for how they got the turf in the first place this mostly was small governments at the town and county level signing short term exclusivity agreements with a telco to run the initial infrastructure back in the 80s-90s when this was common. And many of these municipalities actively work against new telcos moving into the area long after those original agreements ended. You can always rile up some nimbys to bitch about construction noise at a small town hall and halt projects like this for decades. This is exactly how my hometown spent 8 years blocking fios in an area that only had dsl.
You tell a 40-50 something homeowner a three inch patch of their grass will be ripped up for just a week and they’ll drag their balls bare over fields of broken glass to show up to town hall week after week for 8 years to avoid it even if their isp quadruples prices in the same time frame.
It’s even better: a lot of essential or close to it things are pretty much monopolies or cartels (for example, Internet access in most of the US) so people have no actual choice but to pay a specific entity whatever they chose to charge.
It’s like tax but without the upside of taxes (which is that they’re money that’s supposed to entirely end up benefiting you, even if most of it indirectly) because when you buy a product or service from a monopoly or cartel only part of it goes to cover the cost of the actual product or service you’re getting and a large fraction or even most of it goes to shareholder dividends, which has zero benefit for you.
I’ve taken to call these things Taxes Paid Directly To Private Companies.
Weird. How did those ISPs end up the only option?
Horizontal Territory Allocation is a common practice with Oligopolies with physical products (which the telephone wires and routing equipment they build to run the internet very much is).
Basically two or three massive companies simply don’t enter eachothers turf by unspoken agreement and they all get to benefit by not actually competing with eachother. They they can take turns raising prices in their own turf and know their customers have to physically move to get their “competitors” prices. As long as they never actually talk to eachother about doing it it is technically not illegal.
As for how they got the turf in the first place this mostly was small governments at the town and county level signing short term exclusivity agreements with a telco to run the initial infrastructure back in the 80s-90s when this was common. And many of these municipalities actively work against new telcos moving into the area long after those original agreements ended. You can always rile up some nimbys to bitch about construction noise at a small town hall and halt projects like this for decades. This is exactly how my hometown spent 8 years blocking fios in an area that only had dsl.
You tell a 40-50 something homeowner a three inch patch of their grass will be ripped up for just a week and they’ll drag their balls bare over fields of broken glass to show up to town hall week after week for 8 years to avoid it even if their isp quadruples prices in the same time frame.
Government and corporate interests can’t help but suck each other off. Petty tyrants are gonna tyrant.