Once upon a time some guy invented the telephone. The telephone
was good and everyone wanted a telephone. Lots of entrepreneurial
types wanted to offer telephone service because they figured they could
make lots of money because everyone wanted a telephone.
The telephone became very important and the government
decided the market required their influence so everyone got a fair
deal. So they invented the idea of a regulated monopoly.
They would let telephone companies operate as a monopoly in a region
but they would set the pricing and the amount of profit the telephone
company (Telco) could return to their investors. And most people
involved were happy, for the time being anyway.
Running a regulated monopoly was not overly time
consuming so the executives started thinking of ways to wring more money
out of this regulated monopoly system. If an executive could find
a way to put a different spin on the accounting they would be allowed a
higher rate of return and more money could be returned to the
investors. The executive could take his plan to the boss and the
boss would be impressed and he would get a promotion and an increase in
his/her annual incentive bonus. And this was good for the
executives and good for the Telco and good for the investors but bad for
the rate-payers - luckily they would never know though.
Another executive looking for a new way to get his
promotion and bonus decided to try lobbying the government people
responsible for the regulated part of their business. It was
quickly realized that buying a few meals and a few other perks could get
the regulators to approve accounting changes, rate increases, and
basically allow the Telco to make more money. And this was good
for the executives and good for the Telco and good for the investors but
bad for the rate-payers - luckily they would never know though.
The Telco grew very big and employed lots of
people. Some were promoted and supervised other workers.
Some of these supervisors should not have been promoted as they were not
nice to their workers. The executives of the management team were
too busy trying to figure out ways to get promoted and make more money
so they failed to notice the supervisor was not treating his workers
fairly. The workers got mad, they went home frustrated, they
complained to anyone who would listen. Soon someone got the idea
that they should start an union to get the Telco to treat them
fairly. The executives of the management team were so busy
figuring out ways to get promoted and make more money that they just let
it happen rather than deal with the source of the problem. And this was
good for the executives and so-so for everyone else except the
rate-payers - chances are they will never notice the difference.
The Telco still didn’t treat their workers well so the
union became stronger and stronger. Soon the unions were so mad at
management that they started making more and more outrageous demands,
higher salaries, restrictive work designations, demands that would
significantly increase the costs of the Telco. The executives of
the management team were worried, how would they get their promotions
and bigger bonuses now? One executive quickly realized that this
union problem was in their best interest. Fighting it would be
difficult and the executives would probably not sleep well. If
they gave the unions everything they want they would increase their
costs and the amount of money which could be returned to the
investors. And this was good for the executives and good for the
Telco and good for the investors but bad for the rate-payers - luckily
they would never know though.
Then came the day both the management team and the
union dreaded. Out with the regulated monopoly and in with
competition. A new breed of executives now existed in the
management team who were willing to deal with the union. The union
was informed the gravy train would soon be over and reality would rule
as the Telco would be changing their business model. The union was
horrified, what were they to do? The union by this time was huge
and they too had executives. These executives wanted promotions
and pay increases too and they would not get them if the business model
changed. So they thought why don’t we just lobby the regulators
just like the Telco. They soon found they could buy support for
their cause with mere trinkets. These executives also decided to
tell the rate-payers that their world would never be the same,
Fear, Uncertainty, & Doubt (FUD), with deregulation and the
rate-payers listened, at least a little anyway. The regulators
were persuaded to change the terms of deregulation to benefit the Telco
and their unionized workers. By this time everyone at the Telco
was unionized except the executives of the management team. The
unions were happy, the Telco was happy, and the rate-payers would
hopefully never know what this maneuver cost them.
The End