As more and more customers abandon landline service for mobile service or rival providers, a fundamental issue is that a smaller customer base means fixed overhead costs of the network must necessarily be shared by a smaller number of customers. line loss
That means higher costs for the remaining customers, and the process will not stop as customers continue to shift their communications spending to other providers or other types of service.
Capital intensive networks are susceptible to changes in demand. In Denver, where we live in an arid climate and are highly susceptible to drought, residents continually are exhorted to use less water. We have done so. The result is higher rates. Why? Because the water utility's fixed expenses have to be covered, even in the face of lower usage (what we were asked to do), which lowers Denver Water's revenue.
Capital intensive networks are susceptible to changes in demand. In Denver, where we live in an arid climate and are highly susceptible to drought, residents continually are exhorted to use less water. We have done so. The result is higher rates. Why? Because the water utility's fixed expenses have to be covered, even in the face of lower usage (what we were asked to do), which lowers Denver Water's revenue.
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