Wednesday, July 25, 2007

Regulatory Inefficiency Theorem

This funny post from Long or Short Capital highlights the absurd path that telco regulation has taken in the US.
The Regulatory Inefficiency Theorem states that any move by a regulator will thereafter be reversed by the market. The time to reversal will vary inversely with the amount of regulatory oversight implemented whereas the lobbying dollars spent will vary directly.
The article ends by noting that the telecom industry spends more on lobbying “than the tobacco, aerospace and gambling lobbies combined.” If you want to know why it's sensible for them to do this, check out the taxes on your local and long distance landline bill.


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