Does a cheaper, Public Internet Service really benefit the consumer? [Archives:2003/660/Business & Economy]

August 18 2003

By Rayan Mohammed
For the Yemen Times

To many the internet is concerned the greatest change of the latter half of the 21st century. The internet has not only proved a means of communication, but it has made the world smaller, and people closer to one another. It has become so integrated into our lives that the demand for faster, better and cheaper internet services has become a common cry among people. Yet it is no secret that the internet services in Yemen are in a state of stagnation, despite government's effort to make the internet more accessible by making it a public service. Yet the internet has become more unreliable and frustrating. The logic of a public internet service is questioned, was it better when the internet was provided privately?
Has a cheaper internet service resulted in higher costs for others? The internet in Yemen is greatly lacking in speed and efficiency, and the connection is notoriously unreliable. The argument for either case depends on moral views and economic opinion, though a lack of understanding of both views proves incompetence on the view held. As with all public services, the objective of the provider is to please the public.
The single most driving force in an individual is personal gain. We work from morning to night to make money so we can be rich to buy OURSELVES things. We marry and have children to find some happiness to OUR lives. Why neglect it, this is the way of the world. The more we try to gain, the more efficient we become in our methods of achieving this goal. A private internet service would have many advantages all relating to the idea of profit maximization. Any private firm aims to maximize the amount of profit it makes by selling as much of the product as possible and using the cheapest method of production. Efficiency is perhaps the best arguing point. From the supplier's point of view, the quest for the most efficient and cheapest method of production is vital. If the product is of poor quality, the consumer will buy the same product from the competition. Therefore the firm must ensure that the product is of adequate quality for the slated price. Now if this was applied to the internet in Yemen, the internet would be faster and better. The firms will try to ensure that the connection seldom fails to please consumers; however it would demand a higher price for the consumers' wish. Secondly, when the firm makes profit, it may use some of their profits for research and development. Research and development may yield more efficient methods and new technology. If this were fully utilized in Yemen's internet, the possibility of broadband internet would seem brighter than it is right now. Also new technology may allow the firms to produce at a cheaper cost, therefore higher profits for them and lower prices for consumers. Lastly, a private firm will hire workers at better prices; therefore there is a competition among workers to work harder for faster promotion and better salaries.
The argument in favour of public internet service is closely linked to how significant the internet is. The internet has revolutionized the way we live, trade and learn. As more people connect to the web, more views, ideas and beliefs are exposed for people to read and learn from. A cheap, public service doesn't discriminate the right to learn and communicate to the highest bidder, but rather allows the community as a whole to benefit from it. This allows your average working class citizen to broaden your horizons. However, one of the many advantages of the internet is to economies job availability. The internet has opened a market that doesn't really require the highest qualifications, but an interest in the internet itself may suffice. The cheaper the internet is, the wider its appeal becomes for all to become interested in. Therefore more people may enter the market and find jobs as web site managers, etc. Secondly, in a developing country like Yemen, where a large percentage of the population is poor or uneducated, an increase in public services boosts government popularity and is more forgiving on the nation poorer people. With new technology like the internet, it shows that the government isn't discriminating and neglecting the poor, but rather giving them the opportunity to be equally educated.
The internet is a window to many possibilities. Yet, we can take a series of small steps as a whole or we can take steps at different rates. Though I support the growth of a community as a whole, I firmly believe that capitalism is a beautiful concept and I believe that a person should strive for him/herself and not drag behind for the welfare of others. Therefore, I disagree with the idea of a cheaper, government-owned internet. Though its advantages are numerous, if the internet is private the prices will eventually reach the price given by the government now. Firms' incentive to maximize profit by competing will keep prices low and keep the internet's quality higher. In my opinion, it would have been a wiser idea to invite more firms in the market, increasing competition. Competition is a great mechanism for ensuring efficient production, good products and reasonable prices, without much government interference. In turn, the government can focus its attention and finance to other issues such as health and social security. Meanwhile, the internet market can regulate itself maintaining quality internet at reasonable prices.