There Goes the Neighborhood

The EU has decided to put a lid on the cost of phone calls.

The European Parliament has approved new telecommunications rules that will cap prices of intra-EU phone calls….

And those Parliamentarians are proud of themselves for this.  MEP Constanze Krehl, who speaks for the German Social Democratic Party on matters related to telecommunications:

It was high time to cap the sometimes outrageous prices for international calls in the EU[.]

Just like rent controls, though, this will serve only to stifle maintenance and improvement.  Quality will lag and eventually go outright downhill as the cost of providing the service eats more and more into the revenue—now maxed out—gained from providing it.

Ultimately profits will shrink to the point that too few providers will exist and more than just price will be capped, so will capacity be capped.  Just like housing in rent-controlled areas.

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