Σάββατο, 4 Ιανουαρίου 2014

Free Wi-FI - a boost for development. Really?

The Prime Minister’s declarations for free wi-fi connection come under the mantle of “growth”, but we shouldn’t buy. Once free wi-fi is provided, the companies which failed to win the tender will be swept from the market or grow significantly weaker as the demand for their paid services will be minimal.The lack of competition entails decreased investments and thus no technological progress is expected. The winning company will be disincentivised to make large-scale investments as a)there are no strong competitors to run behind b)there’s an increased uncertainty regarding the continuation of their activity(cronyism,corruption,other extra-market factors) which fuels predatory behavior.Furthemore,internet provider’s contraparte will be the government, establishing a state’s monopsony,which goes down to suboptimal outcomes for internet users: enterprises in the free market spend large amounts of money so as to individualize the preferences of the various costumer types.But when the state will stand for millions of internet users,unavoidably the “average costumer’s needs” rationale kicks in and the more demanding users among us won’t be able to find a product that best suits their needs.For the aforementioned reasons,contrary to what mr.Samaras holds,such a provision would impede “growth”,distort the market and lower the quality standards of provided services. 

Mariela Tiliakou  

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