Accountants are not to blame; SEC regulation of audits is not necessary.
The networking, telecom and internet providers need to take a good hard look at the cost structure. No doubt, fierce competition has benefited us in the form of lower prices. Most of those companies are losing plenty of money and have negative cash flow. You can see that, in their effort to survive, they have reduced capital expenditure to the bare minimum. This has caused the whole cycle to grind to a halt. It indirectly effects other industries like semiconductor production.
Think of the days before the internet. We had to call our broker for quotes and to place orders. We had to dig through numerous publications to research a stock. The news was the Wall Street Journal.
Now, we have instant quotes, online trading, research at the click of the mouse, instant news, search engines at our service; all mostly free. I pay about $40. per month for a cable modem. How much of that trickles down to the companies that are actually supporting the infrastructure with software that is costly to develop, and data that is expensive to store. Probably zero. I know there are ads and the annoying pop-up ads but, evidently, they are not generating enough cash for companies to break even.
I hate to say this but, in order to stop this death spiral, we will have to pay more for internet services. I hope the boys in Washington will realize that, only then, will we see a reduction in the bankruptcy filings and a return to a healthy economy. |
