This’ll be short, I think. Or it won’t. That’s a consequence of writing a stream-of-consciousness article at 1:11 AM on a Saturday Night. Bonus: No alcohol in my system! Egads, does this mean I’ve grown up?
Wait. Are you sure I’m not drunk? Because, according to this article by Peter Salter, of the Lincoln Journal Star, the state of Nebraska is requiring private companies to keep pay phones in operation despite staggering losses on their investment. We’re talking, according to Mr. Salter’s article, the tune of $1,000+ losses.
When Governments Force Businesses to Operate
Most of us remember the days before cell phones. I can tell you a funny story about how I, a strapping young lad, used to “phreak” a free message out of the old pay phone at the recreation center; all I’d do is ring up my parents via a collect calling service, and when the operator gave me a bit of time to identify myself before my mom accepted charges, BAM, I’d say “Swim practice is over, come get me.” She’d refuse the charges, I’d save a quarter. It was a common trick.
Anyway, pay phones! Back before cellular phones were as popular as they are today, or, you know, invented, they were your best bet at calling someone when out of town. Phone booths? Y’know, those things Superman used to change in? They were your best (and only) friend if you were lost, because all you’d need is a quarter and you could call your destination for directions.
From the “lost and desperate traveler” position, I can understand wanting a payphone. Especially if, say, there is no cell phone reception in an area, or if – heaven forbid! – a traveler’s battery goes dead. In that respect, publicly available telephones are certainly a generous offer from a community to its potential guests! And, if the government has that as one of its interests, surely it should pay for that, right? And certainly it would have a right to collect some form of compensation for said service, yes?
No. Not in this case; in this case, its the K & M Telephone company. Said company, according to Mr. Salter’s article, even gathered $19.58 in change for the telephones it now wants to retire from service! Of course, this is money meant to defray $1,469 in costs.
How are these costs so high? As per Mr. Salter’s article,
“The company told the commission it spent $1,469 maintaining them that same year. That includes checking the coin boxes, repairing damage and paying for dial tones, surcharges, fees, taxes and phone books”
Now, I’m not a Professor of Business, but really? I mean, that cost estimate seems a little high. Dial Tones? I suppose that means service. Repairing damage? I dunno. Surcharges and fees? Aren’t those usually paid to the company? Or are they payments to the government, in some fashion? Or another company? As for checking the coin boxes…Well, you need to pay a person to do that, I guess, and that might be expensive.
So the costs sound a bit high, yes. However, that doesn’t immediately invalidate the company’s argument that these phones are not a profitable business. And, under the general assumptions of a Capitalist economy, if it isn’t profitable, shouldn’t they be allowed to get out of it?
The Good Subsidy
There is a perpetual argument over whether the government should ever subsidize a business. Whether its “Big Oil,” “Big Pharma,” or “Big Farm,” I’m sure you can run a quick web search and come up with plenty of arguments. Simply tapping in “Obama oil subsidies” lead me to this CBS article, wherein President Obama suggests that oil companies should no longer get them.
The entire rationale behind a subsidy is that the government has an interest in seeing a particular business or service exist, and provides some or all of the money to cover its expense. There is nothing wrong with a government, in this case the State of Nebraska, deciding it wants to guarantee the availability of at least one pay phone in each municipality. Provided its State government wishes to do such a thing, hey! More power to ‘em! That’s what this Democratic Republic thing is for, right? And if they can find a company that can make money for it, all the better! Governments running businesses is usually not the best policy! Otherwise it’d be called a “Command Economy.”
But for it to turn around and slap those costs on a private company that is unable to come even close to breaking even within its business model, and has no reasonable expectation of resurrection, is unfair. If the State of Nebraska – or any other government – really wants to ensure payphones – or any other service – exist in their locality, they should be willing to front the costs.
Of course, then taxpayers might start asking some inconvenient questions, such as: “How would a traveler know a payphone exists?” ”Assuming a traveler knew the law was that a payphone must exist, how would he go about determining where said payphone is?” ”Do we really believe that no bar, convenience store, government office, or whatever-is-open would refuse to allow a lost patron to make a fast telephone call?” Or, my personal favorite, “Why doesn’t this fictitious traveler get with the millennium and get a celly?”
Or, perhaps the most logical one of all…
Why not, instead, pass a law that mandates any store which sells goods allow for a “Good Samaritan” phone call? Under this pseudo-proposed (by me!) law, and to protect the business’ interests, the phone call may (and should) be made in the presence of the store’s management, to ensure that the “traveler” is not calling a criminal accomplice, or something like that. Or, to ensure that the call is not, say, a personal thing. It would strictly be for directions and/or assistance, and if abused the hospitality could be withdrawn.
But, hey, I’m just a guy writing on a webpage…