13 Comments

1. Al  •  Jan 31, 2009 @2:45 pm
   

   "Sure, it lost money and didn’t have as many channels."

   I could make some snarky anti-socialist comment but seriously, how am I supposed to top that?

2. Ken  •  Jan 31, 2009 @7:35 pm
   

   It's interesting that it offered such good customer service — not something that I normally associate with government-provided services. I would hypothesize that it was small enough and isolated enough for some exceptional individuals to lead it effectively.

   But ultimately, it lost money over the long term, right? So Ezra, though you are going to be paying $40 per month more, I suspect that you, or somebody, was already paying more than you thought for Alameda's services. You were paying it through taxes, or higher costs at businesses that pay taxes, sooner or later.

   I respectfully submit that the current state of governmental affairs in our great state do not encourage the view that government is the best equipped to meet people's needs.

3. Xmas  •  Jan 31, 2009 @9:13 pm
   

   You can probably complain to the city. Comcast;s franchising deal with your city can't be so horrendous that the city has absolutely no leverage.

4. Ezra  •  Jan 31, 2009 @11:37 pm
   

   To me, one of the great faults of capitalism is that profit is the only metric. Sure, Comcast offers me 30 more channels that I will never watch (Fox Reality? BYU Network?) and only one that I will (getting SciFi in HD is pretty sweet..) but the sharp drop in customer service (which I prize in any field) is a major negative to me.

   By the way, I never really should have framed this as anything socialist, because Alameda entered into the Telecom business to make money, not (as I would prosaically have it) out of any wish to create a socialist state.

5. Mitch P.  •  Feb 1, 2009 @6:44 pm
   

   I'm not sure that the profit metric is the problem, but the weird psychology of pricing models. The question is: How much more would you have been willing to pay merely that better customer service? I would pay more for better service (say $10month to not have to wait on a voicemail queue when I called), but that usually isn't an option. Companies don't want to appear anti-egalitarian by requiring more money merely for reasonable customer service (though customer service is one of the biggest costs for most businesses.)

   Most businesses *will* try to come up with other ways to separate out price sensitivity. Some use differences in demand over time; like matinees and senior discounts. Fewer people want to see a movie at 10am on a Tuesday, and seniors are more likely to come at lower-volume times (and more often) but are more price sensitive. Other price tweaks are based on criteria that have nothing to do with the underlying cost of providing the product or service. It's why "staying over a Saturday" makes a round trip flight cheaper. Business travelers are less price sensitive, but typically fly and return in the same week. Most security rules (i.e. needing to show ID and not being able to resell tickets) have more to do with protecting this business model (by preventing the tickets from becoming a commodity) than any real security benefit.

   I live in the Bay Area, and I share your distaste for Comcast. If I had viable alternatives, I would seriously consider them, but Comcast is effectively a monopoly. (DirectTV is a alternative product, but not really a direct competitor. At best it makes it an oligopoly rather than a monopoly.) Private monopolies are generally no better, (and often worse) than government monopolies because they only have to avoid provoking enough outrage to cause regulatory changes that would threaten their status.

   If comcast were actually trying to build a product to address customer demand, they would allow for a la carte channel selection instead of "service teirs". Their "service tiers" seem to be designed not with different tastes, but to separate out different price sensitivities. Instead of letting you choose based on broad interest categories (Geeky, sports, classic movies), you need to choose by obscurity. The more specialized and low viewership your desired channel, the higher-priced the tier it's in. If you really want the IFC, or the Science Channel, or BBC America, or the weirder sports channels or all the obscure PBS HD channels, you need to go up to the $80/month (or more) tier. We have digital cable only because that's the only way to get CSPAN2, and my wife LOVES bookTV.

   As for nice, quasi-regional ISP, I use sonic.net. They cover all of California, they have excellent customer service (though only from 7am to 10pm on the phone.) They don't even balk when I say my primary OS is linux, or that I want a static IP (or more than one static IP) If you go for the fancier services, they they can be quite expensive, but for basic DSL with a non-static IP, then you pay only a 10-20% premium. I pay over $70/month, but I get multiple static IPs, and better bandwidth. I've never waited more than 5 minutes on hold, and the people I do talk to can help me (even if I'm trying to talk to them about the BGP configuration with their peering points…. or some other obscure technical issue.) I'm not associated with them, other than a loyal customer of 10+ years.

6. Grandy  •  Feb 2, 2009 @7:43 am
   

   "To me, one of the great faults of capitalism is that profit is the only metric. Sure, Comcast offers me 30 more channels that I will never watch (Fox Reality? BYU Network?) and only one that I will (getting SciFi in HD is pretty sweet..) but the sharp drop in customer service (which I prize in any field) is a major negative to me."

   It's true that other benefits can be viewed through the lens of profit, but I don't understand the "Capitalism only has one metric" statement, which taken at face value appears to be off base. People very obviously care about such things as customer service. It's not an overriding point of interest to everyone in every situation. Jeff Atwood had a post – I can't recall if it was recently or not – about self-checkout stations in super markets. They're not really customer service focused, and a bag boy + cashier can probably do it more efficiently than you can. If they do it pleasantly that's even better. But nobody in the store cares about getting your stuff processed and checked out more than *you*. I like self-checkout for the same reason.

   OTOH, I better get some customer service or something similar when I walk into a comic book store/geek store. When I frequent a place like that I'm certainly looking to tap into the geek mind. There was actually a decent place in Macon (they sold it some time after I left town alas) and I had a pretty decent rapport with the owner, leading to plenty of good suggestions. I preferred to shop there for Graphic Novels and such, over the big book sellers and even over online.

7. Mitch P.  •  Feb 2, 2009 @9:20 am
   

   Re: the profit metric

   Economic theory is predicated on the axiom that money provides a single scalar (directly comparable) metric of value (cost or benefit.) Seen that way, the profit of an enterprise (the value others see in its product/service over it's production cost) is a fine metric… *if* you can accurately reflect all costs/benefits. One of the ways it can fall down is if there is a cost or benefit that isn't accurately reflected.

   Plenty of companies won't even try to measure certain cost/benefit ratios. In a perfect market, the cost of a safety improvement (for example, to a car) could be measured agaist the reduced mortality rate. But putting a monetary value on human life is hugely distasteful to most people. The irony is that not putting an explicit value on it has the effect of tending to undervalue it, since any attempt to analyse said value will be most distasteful to (and therefor not done by) those who value it most highly (the person, and those who care for him/her.) Instead you get things that make people feel safer (SUVs) long before things that actually make them safer (airbags), because the analysis of the cost-benefit trade-off is too risky. Insurance companies do this analysis, but only in terms of settlement costs, and even then the results are sometimes too politically charged. (A few years back they published a study showing that having ABS doesn't reduce the accident rate or the size of settlement payouts, but they still offer a discount for it.)

   While customer service isn't (usually) life-or-death, but it's another area where accurately passing costs on to customers has a high PR cost. The perception (not altogether inaccurate) is that their shoddy business practices, product design or quality control is the reason you need customer service in the first place, and charging more for "good" customer service amounts to double dipping. If you had healthy competition, then the "cost" of shoddy customer service is losing your customer to your competitor, but in this case there aren't that many alternatives. You have DirectTV (whose customer service is probably similarly bad… I have no experience) or not having a paid TV service. Some would choose the internet (Either legal or illegal streaming) but that has little or no customer service either because the business model for customer service on the internet (where the problem is often out of the control of the service provider, and opaque to the customer[*]) is more broken than for cable TV.

   — Mitch

   [*] Say the video you're trying to stream your favorite show from Hulu, but it's choppy and stuttering. Hulu can't even afford to pay someone $10/hour to read a script to walk you through the basic problems, most of which are out of their control. The problem could be in the network (but is it latency? or bandwidth? or jitter? or routing instability? or path MTU? or tcp window transmission size? or the stateful firewall of your home router? or the porn movie that your teenage son is downloading with bittorrent) Or is the problem in your computer? (The flash software from Adobe? the way it interacts with your video card? a virus? other software on your computer hogging the CPU? a USB device which is playing games with DMA and invalidating your processor cache too often?)

8. PLW  •  Feb 2, 2009 @4:38 pm
   

   "Economic theory is predicated on the axiom that money provides a single scalar (directly comparable) metric of value (cost or benefit.) Seen that way, the profit of an enterprise (the value others see in its product/service over it’s production cost) is a fine metric… *if* you can accurately reflect all costs/benefits. One of the ways it can fall down is if there is a cost or benefit that isn’t accurately reflected."

   No economic theory I know has that as an axiom. In some circumstances we assume we can judge how much you value something by how much money you'd be willing to give up in exchange for it, but that's just to judge how much it's worth to the individual in question not as some global statement of value.

9. Mitch P.  •  Feb 5, 2009 @11:34 pm
   

   @PLW So I wonder which economic theories you know that *don't* have that as an axiom. You can build economic systems without money (usually intro economics courses talk about barter systems), but they're not very flexible… after all the person who wants to buy your pottery only has goats to offer in trade, and you don't need goats. They person who wants the goats may only have grain, but you don't want that either, you want vegitables, but the person with vegitables will only take iron tools…etc. While you can build economic models without money, they tend to be academic curiosities.

   Economies work MUCH better with money. The advent of standardized coinage caused an explosion of trade and commerce that makes the internet pale, but coins were just fixed increments of precious metals, and they were useful because while you might not need copper, silver or gold, they had high enough value by weight (and that value didn't diminish with time or distance) that you could transport "value" over large distances without actually taking too much stuff with you.

   Now we don't even have the precious metals, and money has (almost) no intrinsic value, other than the shared delusional value. If I break a $20, and get four $5 bills, why do I think I've broken even? I have 4x as much paper by volume and weight. Often, even the paper is missing. If I buy a new CD from amazon, pay for it with my debit card, which gets deducted from my bank account, which was filled by direct deposit from my employer, then I've (indirectly) traded my work for the CD. The way Amazon, my employer and my bank figure out the exchange rate for how much of my work is needed for the CD is done with money.. that never really existed at all except for bits in a computer somewhere.

   Certainly different things have different values to different people. Nearly 20 years ago, I saw the movie Cliffhanger at a $0.99 super bargain show (and I may have been ripped off.) However, plenty of people thought enough of it to pay $7/person. Now the way we can say that it was worth more to them is that money provides the common metric. Of course.. some of them might have been willing to pay $9 to see it, but the theater was only charging $7, so in their estimation they got a bargin. Almost anytime you buy something, you have made a value judgement–that the "thing" is worth more than the money you will give up. Similarly, the person/business/entity selling it has decided that the money is worth more than the "thing". There are whole sections of microeconomics that deal with how those value judgements are made, but they assume that the way those value judgements are expressed and compared use money as the metric. Macroeconomics works the other way around, and tries to explain how we decide what the actual number of that value is, and since the money has no intrinsic value any more, that can be surprisingly tricky. If you had/made only 1/2 as much money as you do now, but everything cost only 1/2 as much, then would you be any poorer in a real sense?

   Anyway, this is a long and pedantic answer, but I just don't understand how you could say that money doesn't act as a value metric in economic theory… after all.. what else is it?

10. PLW  •  Feb 6, 2009 @6:51 am
    

    Money is a veil. What you give up is whatever you would buy with that money. The money is far from axiomatic.. it's a convenience. The opportunity cost is much more basic. If I decide to marry one woman (in our society), I give up the opportunity to marry some other. If I go to the basketball game, I give up the opportunity to watch the football game (or whatever the my next-best option is). We talk about money when we are being informal, but the true value of something its the other real things we are willing to give up to get it.

    "I wonder which economic theories you know that *don’t* have that as an axiom."
    I don't really know what you have in mind by "theories", but here's a little list of important results in economics that have nothing to do with money:

    -The First Fundamental welfare theorem (which doesn't mention or require money at all) (With perfectly competitive markets, we get an efficient outcome by simply letting people trade)
    -The Second Fundamental Welfare Theorem (You can get any efficient outcome you want by fiddling with people's initial endowments)
    -Coase Theorem (If all essential property rights are well defined, and all appropriate markets exist, production will be efficient, even in the presence of externalities.)

    In fact, I challenge you to find an important result in welfare economics that isn't explicitly looking at money (i.e., looking for a theorem about inflation is sort of stacking the deck), but which requires an axiom similar to the one you state.

    In fact, I think you might be confusing axiom's with results. It is true that in a perfect competitive environment, the price of a good will represent its value to the marginal consumer of that good. But that's not an axiom: it's something you can prove occurs in that setting.

11. CT  •  Mar 3, 2009 @3:17 pm
    

    Hello Ezra,

    Do you still have the letter which Comcast mentioned their guarantee that they will keep AlamedaNET's price for one year from November 2008?

    As it turns out, my father received a second letter from Comcast, saying that prices will go up in March 2009, and that is what Comcast is going by. I have nothing to dispute their new claim since I no longer have the earlier letter.

    Thanks!

12. CT  •  Mar 3, 2009 @4:22 pm
    

    By the way, my internet situation seems eerily similar to yours. Comcast blocked my service all of sudden while I was uploading documents online. That forced me to call in. During the call, they changed the account number and price plan, which was revealed later in the week when a new bill was mailed. I had no idea at the time of the call that the associate altered the account information so drastically to restore service!

13. LCC  •  Mar 10, 2009 @12:55 pm
    

    I had the same experience with Comcast's "24 hour" customer assistance line. When I called in at 7:45 am, I received the message that the phone is answered after 8am. I had also spent 25 minutes on hold the previous night but gave up waiting for assistance when it was close to midnight and I started falling asleep.

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