Att made around a 12% profit margin, which seems reasonable if a bit high. Would you consider 12% == “printing money”? I usually think of 25+% margins like in big tech that way.

Not arguing just trying to understand how much money these companies are actually making.

12% in perpetuity with no stress the number will go down and lots of (imho insidious and customer unfriendly) ways for it to go up is in fact "printing money"

Being able to make money risk free without risk of competition always ends up being worse for the customer and bad for the overall economy (in terms of efficiency)

This is why AT&T keeps looking for the next big thing that will net them double digit margins in perpetuity with minimal effort.

They have bought and damaged the following assets in pursuit of this goal: DirecTV, HBO, CNN, Cartoon Network, Warner Bros and more.

AT&T has terribly mismanaged and damaged these assets, from destroying their carriage agreements with Dish and other cable companies for HBO, reducing their revenue by hundereds of millions a year, to, to more than halving the value if DirecTV by destroying its value proposition and failing to retain the customer base.

Compared to what? Food retail is generally at 2% ...

food retail margins are 2% every time they turn over their inventory, which if they manage it properly can be much less than a month. so that 2% is annualized via a large multiplier

the margins for telecoms are considered on an annual basis.

Sorry, I don't understand.

Are you saying that gross revenues for food retail are higher, and thus 2% of <a huge number> is bigger than 12% of <a smaller number> ?

if you buy broccoli and sell it a few days later at a 2% profit (net of costs), you just made 2%. if that took you a week, and you do it again the next week, and the week after that, you took your investment and grew it 52 weeks @ 2% a week, you'd be at 280% or more than 180% profit (1.02 ^ 52, presuming you also buy and sell 2% more of the broccoli itself every week. if you just buy the same amount of broccoli every week that's just 52 * .02 plus a little for interest, and you take the profits and pay off debts or take it as income, etc.)

if you lay fiber and connect it to the internet and hire cable guys to visit people's houses and customer service people to answer the phone, and your total revenue for a year minus your costs for a year comes out to a profit margin of 50%, you have 50% margins.

This math makes sense because grocery stores only buy broccoli once and then sell it over and over again for theoretically infinite profit. $1 spent on a broccoli over a year can be in the millions due to this phenomenon

If you buy broccoli for $1.00 and sell it in a week for $1.02 you’ve made 2%. If you buy another broccoli for $1.00 and sell it again for $1.02 then you’re still at a 2% profit for the year. You’ve spent $2 on inventory with revenue of $2.04, for a total profit margin of 2%. This is obviously simplified.

the piece of corporate finance you are missing is that the money you use to buy the broccoli is scarce, you have to "pay" for it. you can't leave it out of the calculation. You pay for it to who you borrowed it from, or to your shareholders, or the opportunity cost of taking it out of whatever use somebody else was paying you for.

that dollar you use to buy the broccoli, it's like a machine you use to knit sweaters. If you put that dollar to use for a year and sell one broccoli, you made 2%. If you put that same-single-dollar to use for a year and sell 52 broccolis, you made more.

what I originally said was that you can't just look at the margin on a sale, you need to look at inventory turn, how many times you collect the margin.

what makes the margin low is competition. a grocer is willing to accept a 2% margin on a sale because the cycle can be repeated many times in a year. In a sense, the interest rate (which is quoted at annual rates) on the borrowed dollar is fixed at that annual rate, but if you get to cycle through your operating capital quickly, you get to look at it as the amount of interest you need to pay each week.

It's not a "big tech" product. It's an infrastructure product. A public utility. With (if they don't mess up) life-long subscription customers. With essentially zero risk (aside from infrastructure risk: earthquakes, upgrade cycles.)

They won capitalism. The prize is you don't have to compete anymore, you don't have to innovate, and you get to charge more and deliver less.

Getting companies to this position is foundational to the incentive structure of our economic system. Once they win, that's it. They get to stay there forever.

I worked in IT for a large telco for four years that has a monopoly on an extremely large part of Canada.

After years there, learning the insides, working closely with marketing and sales and all the rest…..I agree with you 100%.

They literally have guaranteed teed profits in the form of VERY large government subsides. Of course they chase them, so instead of FTTH or other interesting initiatives they were hell bent on installing fax lines and copper because they had enormous subsidies.

Canadians love their monopolies full stop. It's a cultural issue where each sector has its handful of heavyweights, of which you have a choice of 1 or 2 to use locally, and even if there is a third option most Canadians just won't consider it.

Comparatively, the US has thousands of small banks & credit unions, and tons of small and midsize ISPs that provide a 3rd or 4th option in areas like MDUs where they can make a go of it.

They won capitalism? The government regulations are entirely responsible for the lack of competition.

As it stands, competition found away around the wired line regulations. The wireless devices came along. And soon the satellite networks will give the cellphone carriers a real kick in the pants.

Nope, you can’t the-free-market-will-fix-everything this one. The telco lobbyists wrote the government regulations. Wireless is slow and coverage is spotty. Satellite is unreliable, expensive, and has a fixed latency cost that can’t be eliminated.

> The telco lobbyists wrote the government regulations.

This is the issue. There isn't a free market in this (or many) sectors because of regulatory capture. If that were gone, if competition was even possible, then we would see improvement.

We wouldn't necessarily see improvement, especially in a deregulated Telecom environment where you order new service and the technician gets you installed but knocks your neighbors on a competitor out of service, resulting in them scheduling a tech who knocks you out of service.

Physical networks like this also clutter up the skies or create areas you can't dig in, and accrue damage while decreasing in value each year until they are abandoned or upgraded.

Abandoned Telecom infrastructure is a serious issue all its own as well, no one wants legacy unused cabling running under their streets or in their building.

> Nope, you can’t the-free-market-will-fix-everything this one. The telco lobbyists wrote the government regulations

Just a point of clarification, the free market generally means independence from government regulation. This isn't the free market failing so much as incumbents using the power of government to force their advantage, part of the argument of the free market is that by not allowing the government to interfere in this manner no one can get laws written to benefit them because the government doesn't get involved in the first place. Now granted that's in a frictionless airless world with spherical cows. But to say the free market failed and the very next sentence say it is because of regulation from the government is oxymoronic.

Even in this version of the free market, monopoly is still the incentive and end goal. Eventually, either a single player wins out (possibly by buying or merging with previous competitors) or a few big players agree that colluding with each other is more profitable then competing (remember there is no government interfering in this free market to prevent this). Once this happens, new players won't enter the market because they can immediately be crushed by the incumbent.

So either way, monopoly is the inevitable end point.

Monopoly is only an incentive if it is clear that it will be permitted.

But it always is though. In a government regulated economy, there is regulatory capture and lobbying to create industry friendly laws that allow monopoly (aka our current system). In a fully free market, then there is no laws to prevent monopoly.

And by monopoly, I am also referring to systems where there are a few big players that just don't compete against one another, or one where there is a big player and a few small but inconsequential players. All of these result in the same effect as plain monopoly.

Especially with natural monopolies like infrastructure, there is no economic case to overbuild most power grids, water/sewer districts, Telecom infrastructure or natural gas networks regardless of regulation.

The rare times you see overbuilding there is always a scheme involved, whether it's Comcast's recent edge outs to appear as though they aren't bleeding internet customers, or government money incentivising an overbuild cause the current ISP didn't document that they serve a set of addresses.

The definition of "a free market" you're offering here is one that has never existed. So we can either talk about the free markets we have (which compared to markets in other places and at other times are stupendously free) or we can talk about, yes, spherical cows.

> They won capitalism? The government regulations are entirely responsible for the lack of competition.

Capitalism isn't the absence of government regulations, you seem to have confused it with anarchism.

Capitalism is the name applied by critiics to a real world economic system existing at the time it was described based on particular structures of properry rights and the resulting class system. Government regulations systematically benefitting the dominant class is... very much one of the features widely observed to result from that system.

It's not quite that simple.

Sonic focuses their fiber services only in areas that are most profitable to install fiber. As far as I know, they only install fiber on telephone poles that have free space, in areas that are high density. The cheapest install option for the highest possible revenue. I live right next to an area that has Sonic fiber, but there's no telephone poles, and an install would require an expensive underground installation. As a result, my area isn't even on their roadmap for future development.

If you're outside the areas covered by their fiber service, Sonic feels it's still perfect fine to charge $50/mo for a 50 mbps asymmetrical DSL connection.

Stupid idea, I know, but what do you think of

Telephone-pole-as-a-service TPaaS

What are the regulations in place for putting up telephone poles and what are the associated costs?

Fiber-to-the-curb has been a concept for decades. The last couple hundred feet would traditionally be completed with copper but short range wireless could easily fill that gap in 2024.

The costs include loss of service in every third major storm.

This is already a thing in many countries! There is one company building and maintaining infrastructure, and anyone who wants to can provide a service on it for a fixed fee.

I believe this is legally required for gas & electricity in Europe, and some of the privatized national phone companies here have similar obligations.

This is called pole attachment, and most pole owners offer this for tens of dollars a year per pole.

No property owner wants additional poles put up, and it certainly won't be cheaper to buy and install a pole than just paying a few hundred dollars a decade to make it the pole owners problem.

Sonic announced expansion to my neighborhood 2 years ago with a status tracking page and everything!

Status hasn't changed since the initial announcement 2 years ago...

Sonic is phasing out their DSL offerings.