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December 11, 2005 - The Business of Business













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Odd business news, from Monday, December 5, 2005 -

This tidbit from the Washington Post, on what happens when you make a major corporation angry

 

Hours after New Orleans officials announced Tuesday that they would deploy a city-owned, wireless Internet network in the wake of Hurricane Katrina, regional phone giant BellSouth Corp. withdrew an offer to donate one of its damaged buildings that would have housed new police headquarters, city officials said yesterday.

According to the officials, the head of BellSouth's Louisiana operations, Bill Oliver, angrily rescinded the offer of the building in a conversation with New Orleans homeland security director Terry Ebbert, who oversees the roughly 1,650-member police force.

City officials said BellSouth was upset about the plan to bring high-speed Internet access for free to homes and businesses to help stimulate resettlement and relocation to the devastated city.


Around the country, large telephone companies have aggressively lobbied against localities launching their own Internet networks, arguing that they amount to taxpayer-funded competition. Some states have laws prohibiting them.

 

There are a number of points of interest here.

Several cities have done what New Orleans is trying to do here, create a public utility actually, like the street maintenance folks filling potholes or a city-run electrical grid providing the juice to light the place, or some other such service, like a police force. Some things for the general good have, in the past, been seen as something everyone should chip in on and let the government do. On the national level one thinks of the interstate highway system, the armed forces, and on the state level roads and bridges and public schools, and prisons.

Now the current crew in power have long held that far more of such stuff should be privatized - as in home schooling is better than kids going to school in schoolrooms, and if they must go to schoolrooms, unregulated market-based private schools are better than synchronized and standards-qualified public schools (distribute vouchers for them and let the public school system wither and die, as Bill Bennett wanted when he was Education Secretary). So now we have private utilities, and for-profit prison systems here and there, and the armed services have contracted out a whole lot of what they used to do to private "security firms" - and the range of what is for everyone and should be a public thing and provided by the government, local, state or national, has gotten narrower and narrower.

Here there is an implicit question with a new technology. You can create a city-wide array of wireless "hot spots" that allow anyone with a computer and the right chip inside to access "the grid" and surf the web and send and receive email - and you can call it a public utility, like roads and bridges, something everyone can use - and pay for setting it up and maintaining it with public funds.

Or you can say that model is not the one to follow - let the private service providers complete, set up incompatible grids, charge what they think will attract costumers and earn them a healthy profit, and see what happens as market forces determine what is available at what price and what level of service and reliability.

Is this something the "invisible hand" of profit-driven economics will create and sustain at maximum efficiency, or is this something that should be just one of those basic things that's better shared? An analogy, perhaps not that close, is to think about whether a privately developed system of tolls roads is better than a network of public taxpayer funded highways. There's no tax burden with the former, there are no pesky tolls with the latter.

Of course, private "pay for use" systems exclude those with low income in one way or another. But that may be the idea - they chose to be poor and live off the dole and be parasites on those with the proper work ethic and positive attitude, so maybe making everything "pay for use" will be one more incentive for them to show some personal responsibility and all that.

Should a wireless grid of "hot spots" be a public utility? It's all how you look at it. It's a matter of where you draw the line between "this is free-market stuff" and "this is something basic everyone uses or could use." That line moves around a lot.

The second point of interest as to do with what the public relations folks at BellSouth were thinking. Yeah, we could give you this damaged building we don't want for your new police headquarters, seeing as how the whole city was pretty much wiped out. But you want to define a wireless network is a utility? Screw you. And screw your police force. We'll leave that building empty, and let it eventually collapse, and your police force can go pound sand for all we care.

This seems unwise. But then again, every Republican in the country is standing up and cheering.

A third point of interest is what ever happened to the massive national effort to rebuild New Orleans and the Gulf Coast?

 

We really do have a short attention span.

On another front, where ideology meets the free-market, one sees here that "Focus on the Family," James Dobson's group out in Colorado Springs, has dumped Wells Fargo Bank. Wells Fargo will handle their funds no longer. This is to protest the bank's "ongoing efforts to advance the radical homosexual agenda." It seems that part of the bank's regular corporate charity program is to match employee contributions to the Gay and Lesbian Alliance Against Defamation. And the bank gave money to the Human Rights Campaign. And there was that gay festival held in the empty parking lot at a Wells Fargo branch in San Francisco. Enough is enough. All the accounts have been moved to the First National Bank of Omaha - a "family-friendly institution."

Wells Fargo Bank pretty much shrugged

 

Chris Hammond a vice president of business development for Wells Fargo, said the bank agreed to match contributions to a media campaign fund for the Gay and Lesbian Alliance Against Defamation...

"We simply made a grant to one of many nonprofits Wells Fargo supports in the San Francisco Bay Area," Hammond said. He said he told Focus officials that the bank contributes to many charities, "including nonprofit agencies Focus on the Family believes in."

A bank statement on its Web site said, "We direct our giving to areas that we believe are important to the future of our nation's vitality and success: community development, education and human services."

 

Dobson may be close with Bush and the administration, but Well Fargo Bank does business in San Francisco and West Hollywood and such places. They do their charities, left and right, to come off as good folks, and narrowing their "focus" is clearly not in their business interest. Dobson can fume. Taking sides here is just bad business.

Note also here Dobson tells the Rocky Mountain News that "gay and lesbian activist groups have picked off all the big companies in the United States."

It seems "the big companies in the United States" see no profit in antagonizing blocks of prospective customers. The idea is to make money, or keep in the black somehow - and joining Dobson's crusade to eliminate the threat of mincing queens overrunning America and making us all listen to the soundtrack to "Cats" while our pure children are forced to watch SpongeBob SquarePants is a loser. The world is a competitive place - you just don't choose sides and narrow your market.

There is the exception of course - the Ford Motor Company has informed gay media outlets that they will no longer place any advertising for their Jaguar and Land Rover lines in those nasty, godless pages. This may or may not be so. You have to take the word of the American Family Association. They say they are calling off their plan to boycott Ford. Their president Donald Wildmon - "They've heard our concerns; they are acting on our concerns."

Maybe.  Ford Plans To Axe Factories And Jobs In Bid To Restore Fortunes - closing eight or ten major plants in North America (one in Canada, one in Mexico, the rest here), and some small ones, laying off thirty thousand.  One suspects they're just cutting back on their advertising budget, generally.  Believe this was the result of pressure from "the truly godly" when each new Ford Focus has picture of James Dobson or the "Focus on the Family" logo on the hood. 

As noted here, the American Family Association was all over the Lowe's chain of home improvement stores for advertising Christmas trees as "holiday trees." And they are calling for a boycott of Target to punish it for an effort to "ban Christmas." And there's this Ford thing. Whatever.

The American Family Association wants these businesses to drive away Jewish, Buddhist, Muslim and agonist or atheist customers. Dobson wants Wells Fargo to drive away homosexual customers and "focus on the family." (Gay folks don't have family - they just hang out together - and work on their plans to corrupt our youth and destroy the country.)

Yeah, yeah - but turning away customers with cash in hand seems really dumb. BellSouth doesn't want to lose customers with the City of New Orleans defining one of their products, wireless services, to be a public, shared utility. And no one wants to play along with Dobson and Wildmon and lose customers who are sinners, or haven't found Jesus yet.

Making a buck is getting harder all the time. That fact trumps all the rest.































 
 
 
 

Copyright 2003, 2004, 2005, 2006 - Alan M. Pavlik
 
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