For whose benefit

Eric Strumingher, an analyst for Cobalt Capital, from a Congressional hearing today, gets to the heart of the issue about regulation of the local phone companies:

The only legitimate reason explanation that I see for the current state of ambiguity in the rules is that the federal government is generally conflicted as to whether the local telephone companies should be run for the benefit of their shareholders or for the benefit of U.S. citizens generally.

This is actually a hard question. The telcos are not as evil or stupid as some make them out to be. If we evaluate them by the standards of companies in other industries, they are doing the right thing: working to maximize shareholder value. But can we make that leap? After all, these are companies that had legal monopolies for decades, and control essential infrastructure paid for by captive ratepayers. I’m starting to think that it doesn’t matter which way we cut the Gordian knot, so long as its done boldly. Either break up the Bells or give them what they want; once exposed to market conditions, they are doomed either way. The worst outcome is the current purgatory of uncertainty.