Re: "They'll charge it to the customers"
Posted Jan 9, 2010 18:05 UTC (Sat) by giraffedata
In reply to: Re: "They'll charge it to the customers"
Parent article: GSM encryption crack made public
Everything you say is right and important, but I stand by my statement that the phone companies would pass the cost on to the customers instead of eating it.
First of all, I'm being approximate because the rise in price will not be the entire rise in cost; it will be somewhat less. This will cause there to be less phone service delivered (because some customers are priced out of the market), which will reduce costs to fill the rest of the gap.
But the more important part of my statement is that the producers won't eat the cost of fraud. It's a competitive market; the producers have no profits with which to eat it. The cost of fraud will be reflected in higher prices and less total service.
It's not true that if the industry could raise prices, it would do it even without the fraud. The competition among individual members of the industry prevents it from setting a price above cost.
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