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   Derek Kerton (profile), Apr 23rd, 2007 @ 11:01am

   
   

   Sounds Fair

   Funny, I'm actually in favor of this balloon expansion. What the carriers are saying is that if they are prevented from gouging roamers in order to balance their books, they will lose a subsidy they have used to underwrite their domestic business. They will charge very slightly more for domestic, spread out over the relatively larger amount of domestic calls. Hmmm, sounds like allocating prices based on costs. Sounds fair. It's just too bad that it took regulation for the carriers to allocate more appropriate prices to their services. At Techdirt, we'd rather not see regulations whenever competition can do the trick, but one of the reasons that competition wasn't working for international roaming is that very few customers shop for their phone service based on the roaming rates. They shop based on phone design, and domestic pricing. Then when the go abroad, they are surprised to find they are gouged. Since it is not something customers care much about at the point of purchasing a phone, all carriers engage in the gouging. Since they all do it, there is no option for the few customers (me!) who actually care. Economics, competition, etc. all depend on perfect markets with perfect information. This never translates to the real world 100%. In the case of roaming minutes of use, it is a very imperfect market.

    

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