No, it is not technologically feasible. Without the coercive power of government, telemarketer-free phone service is technologically impossible! Your telephone is part of a network shared by thousands of phone companies and billions of users all over the world. The phone company used by a telemarketer is not usually the same as the phone company used by the consumer. Telemarketers do not identify themselves in advance by placing their numbers in a database; nor do they notify the thousands of phone companies operating in the United States of their existence. Without the power of government to impose fines and jail sentences, they cannot be blocked! (Even with the power of government, it may prove impossible; time will tell.)
For anybody who disagrees with me, don’t waste time arguing in an SDMB thread; found a phone company, offer this service, and become rich.
Since government is required, is this then a market failure? I don’t know. Is the fact that I rely on the government to protect me against theft, murder, and trespass a market failure? Maybe. We grant government a monopoly on the initiation of force. Use it with care.
I disagree, kinda. Phone companies can and do regulate the traffic on their networks. A person who makes harassing or threatening calls can have their service discontinued. If phone companies so desired they could specify that telemarketing calls (generally or to certain numbers) are not to made on their network. And phone companies do write ferociously detailed conditions about traffic in their interconnect and access agreements (I know because mrs hawthorne used to write them).
Now of course, this requires the coercive power of the state in order to enforce the contracts, but it can be done and non-complying telemarketeers could be reduced to the status of heavy-breathing phone callers, furtively calling from phone booths.
The idea that it would be hard for a new entrant to offer such a contract because existing players are so big is one we’ve already talked about a bit. But something I mentioned right up the top is that maybe phone companies are stopped from doing this by existing policies. Perhaps phone companies would like to do this - because they know it would increase the quality of their services and that telemarketers aren’t paying their way - but that no-one wants to make the first move because it’d be difficult and expensive and if they succeed other companies could copy them at lower cost. Perhaps what they’d like to do is collude to get it done.
Ordinarily we’d think of big companies colluding as “a conspiracy against the public” (as Adam Smith suggested all talk between business people turns to). But not always. Consider the wine industry. For years the Australian wine industry has been complaining about cork taint ruining a substantial fraction of their product. But no premium wine-maker wanted to be the first to do it, since traditionally only crap wine comes in a screw-top. This year they agreed amongst themselves that all the premium producers of dry riesling and sauvignon blanc would seal with screw-tops. The producers are happy and the wine is selling better because it’s higher quality (the Portuguese are pissed off though). So one policy that could be preventing the market from doing better could be laws against anti-competitive behaviour.
I reckon so. The private sector version of these services is the mafia. :D:
The argument is that it would not be so profitable ( and would not have proliferated so much) if it had to pay all the costs associated with the business. A business that sells stolen cars may be hugely profitable, but that’s not evidence that it is efficient. Efficiency is where net social benefits are maximised (which is where the marginal benefit and marginal cost of the activity are equalised*). Only when the customer captures all the relevant benefits and the producer pays all the relevant costs will what is privately profitable match up with what is socially profitable.
Anyone got a comment on my attempt to characterise the list in property rights terms?
Sure, but that’s a crime. If service discontinuation were the only penalty, the heavy-breather would just switch to a different telco. The kicker comes from the threat of a fine or jail time.
But that wouldn’t accomplish much. The telemarketers would just switch to a company that did allow it, and continue to call the same customers. Which leads to your next point . . . **
The American interconnect agreements with which I’m familiar were indeed ferociously detailed, but only as related to compensation, not denial of carriage. Conceivably, I suppose, a telco could say, “If you want to interconnect with my customers, you must ban outbound telemarketing calls. If someone from your network telemarkets my customers, I’ll terminate your interconnection rights.” In the United States, I think that this might actually be illegal, because there are regulatory interconnection mandates. But even if it were legal, it turns into a game of chicken–what if your company has a million legitimate customers, and five telemarketers? If I block you because of the telemarketers, none of my customers can call any of your customers, and vice versa. I just think that this is awfully difficult to accomplish contractually.
Although consumers can’t purchase a service from the phone carrier to block “spam” phone calls from coming through on their individual phone lines, telemarketers can. There is a service called “Teleblock” offered by Verisign that telemarketers can use to block outbound phone calls to customers on any of the Do Not Call lists.
That isn’t a technological problem. Assuming that a database of the phone numbers of every telemarketer could be put together, it’d be easy to block calls from numbers on that list from calling customers who don’t want to hear from them.
So why hasn’t it been done? Because the database hasn’t been put together.
The telephone company shouldn’t have a problem discovering which of its customers are telemarketers. The problem is that telephone companies are unwilling to do it, or to share their telemarketer lists with other telephone companies.
Customers want spam-free phone service; phone companies are unwilling to take steps to provide it. Sounds like a market failure to me. If the government were to mandate that phone companies must develop and share lists of telemarketers’ phone numbers, we could have spam-free service within months.
That’s too simple. Anytime people want something would then be a market failure. I’d like to see some reasoning behind why this service wasn’t offered from phone companies, if they have any of course, but I guess we’ll probably never know. Still, the very fact that people don’t get what they want doesn’t seem to be a market failure. People would want teleportation and food replicators, no? I demand legislation that farmers work with MIT to get this done, they’re falling behind! (Obvious hyperbole I trust you see)
I’m not sure it is reasonable to expect a once-monopolized deregulated market act like something that was always more or less free, and to blame the market for it when it doesn’t. We created something that didn’t act like we wanted it to, and so we’re going to create something else to try and compensate for what happened. But let’s call it a market failure? ::shrug:: I don’t know.
I take your point. But when might we expect this market to get its shit together? Or is it a case, as I suggested above, of the wrong rules for the market? There was a stimulating Slate piece on this posted yesterday arguing along those lines for spam: If you owned your inbox, spammers would pay to get inside. It looks like I didn’t entirely pull the property rights story out of my arse.
On the issue of the mere fact that people want something not being a market failure, I agree of course. But to me, the fact that tens of millions of people took the time and signed up for this list pretty quickly indicates something. At the least it indicates that they’re willing to forego the useful calls they may get in order to filter out the garbage calls. And that’s a sign that something’s seriously wrong.
The property rights angle is interesting, but I think the argument can be made that you rent phone lines, you don’t own them. Of course, I don’t expect my apartment to have billboards inside of it or random advertising slipped beneath my door.
[reading that article] Didn’t I suggest last page that there might be something like an ability for all people that rent a phone line to charge people who call them? (I think I tossed it out; it crossed my mind, anyway) I think that’s a good idea, but I don’t know what it would take to get something like that going on a per-number basis. On one hand, you’d almost seemingly have to always go through a disclaimer message much like the ones that indicate the call may be recorded, “By placing this call you accept that you may be charged for it” which is a bit of a nuisance for callers but surely much less than the evil telemarketing. With something like this in place telemarketers might be scrambling for a DNC list themselves to avoid getting nickel and dimed to death.
In some respects, such a service would involve a cost to the phone company, which means they’d need to charge for it. Perhaps the cost could be offset by having every charged call split the funds in some way so, for example, the charge for a rejected call is $0.5 and the phone company gets $0.25 and you get $0.25. Something like that.
I think the larger question that needs to be addressed, though, is: what could the phone companies have done? Though they had localized monopolies, they really weren’t nationwide. This means the phone companies would have to share information about their customers (or at least which numbers are blocked) and that means keeping track of the database and updating it regularly. We might be looking at companies that would form instead to do this, much like credit reporting agencies, to handle DNC lists. I think this market makes a good standard of comparison, no? Or do I not understand credit reporting agencies?
What interests me here is what methods were plausibly available, and what roadblocks existed to those methods, and what the expected costs would be.
Well, my statement may have been a little too broad. Certainly we can’t expect companies to do the impossible just because customers want it, but in the case of blocking telemarketing calls before they reach your house, it’s not impossible.
The roadblock as I see it is that phone companies either don’t want to collect a list of telemarketers (or a DNC list, looking at the problem from the other side) or they don’t want to share that list with other companies, which would be necessary for the system to work. The failure is not that telemarketing calls can’t be blocked, but that phone companies don’t work together to block them.
It might not be entirely appropriate to call it a market failure when the market was restricted to begin with, but I’ll note again that phone service was a natural monopoly when it was introduced, and only recently has it become technologically feasible to have competing local phone services.
One such system is already in place for anonymous remailers: HashCash. To send a message, you “mint” a HashCash token, which is a computationally intensive process that can take anywhere from seconds to hours, depending on your CPU speed and the “price” of the service. The mail server verifies your token before forwarding your message.
If all mail services implemented this and required HashCash tokens that take 10 seconds (on average) to mint, the cost of spamming would rise dramatically: each spammer could only send 8640 messages per day per CPU. But at the same time, it stays friendly to people who want to send legitimate email: it doesn’t cost them any real money, only a few seconds of their time.
(Obvious hyperbole I trust you see)
Certainly we can’t expect companies to do the impossible just because customers want it, but in the case of blocking telemarketing calls before they reach your house, it’s not impossible.