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Political leaders in Washington are casting about for measures to ensure that the Enron debacle will never be repeated. Unfortunately, one of the main ideas being considered — requiring companies to treat stock options as expenses on financial statements — addresses an issue that not only had nothing to do with Enron's failure but is, in fact, not a problem at all.

Leave Options Alone

"I think it could be Dow 3,000 or below, and the Nasdaq below 500. People think it can't happen, but it can. That's the way markets work; that's the way economic history works; that's the way companies work."

10 Questions With Prudent Bear Fund Manager David Tice

"California state demographers estimate that 609,000 high school graduates will seek admission to the state's two-and four-year colleges and universities by 2010, a 28.6% increase over 2000."

A Baby Boom?

Growth overwhelms state schools

If that estimate is on target, the information technology job market is in the midst of a significant recovery after a sharp contraction last year. "If just half of these jobs are filled, the size of the IT work force will be restored to pre-2001 levels," the trade group said in its report."

Forbes.com: Information technology work force set to grow - report

"A separate study released last week by Information Week magazine said that tech workers' pay had dipped by 11 percent, to $63,000, compared with a median compensation package of $71,000 last year. It's the first time in the five-year history of the study that employees with technology skills reported lower wages, the trade publication said."

washingtonpost.com: For Techies, Some Hope Amid Gloom

Verizon will survive; Qwest is a definite maybe; WorldCom is on the ropes. ... Falling prices: $3,000 for an OC-3. A little over $12,000 for an OC-48. And dropping fast.

I read an article earlier this week that mentioned a price of $2,000 for an OC-3. Cheap, cheap, cheap! It wasn't too long ago that all you could get for ~ $2k was a T-1.

Only Some Will Survive the Telecom Shakeout

"If a well-regarded general-interest site churning out daily, consistent, professional-grade content can convince only 1% of its readership to part with $30 a year, you might as well take the Web subscription model out behind the barn and distract it just long enough to put the shotgun to the back of its head. "

This is a cynical view. The financial specifics are interesting.

This is just funny: (from Salons Premium page)

Salon Premium: It just gets better
Arianna Huffington explains why you should subscribe.

Let it be known that I will never buy anything promoted by Arianna Huffington...

Salon.com's subscription model.

"If Delaware really wants to solve its problem, maybe it's time for it to rethink its tax policy. "

Most corps are Delaware Corps. Industrial Memetics is a Delaware Corp. If Delaware changed its policies, as Salon suggests, this would have a broad impact. There are a lot of reasons to incorporate in Delaware that cannot be summed up purely as "tax evasion."

Salon.com Technology | Huge corporation, can you spare a dime?

MCI unveiled a plan Monday that for the first time gives residential customers unlimited local, local toll and long-distance calls for $50 a month. The goal is to gain local market share. MCI is heavily in debt and under SEC investigation. Analysts say the plan is proof of big changes in the way phone companies bill. "We are moving to a flat rate, or subscription-based, all-you-can-eat world."

How's this for a trick? Since billable minutes are falling off fast for all the carriers, MCI pondered, "Right now, the market wants to see growth in the number of minutes used. How can we get customers to make more LD calls?" and came up with the reply, "Let's go flat rate!" So they charge each customer a little more than the average one pays already, and figure they break even financially, but they get to say "minutes are up 15% this quarter!" in the next report.

One risk (which they must have foreseen) is that only the chattiest of their customers will take them up on the offer, and revenues will still go down even as minutes stabilize or climb up. So long term, it still doesn't pay the bills, but it could make for some nice weasel-words in the next quarterly report ...

According to a Knight-Ridder wire story, MCI's plan is a reply to a similar deal just announced by AT&T. MCI's marketing director: "It was important for us to come out as the first nationwide local phone company. We also wanted to step out of the price-driven commodity market of long-distance." Analysts say that if customers respond, then voice service will quickly evolve into an (unprofitable) all-flat-rate business.

The above is from JLM. I'll add that research has shown that consumers will pay more in aggregate for flat rate services then for metered services. I won't argue the likely reasons for such a decision, other than to say that this sort of pricing scheme makes the most sense in an environment where most long distance consumers are individuals and not businesses. I'm not sure what the current break down actually is. However, one wonders why they can't simply offer flat rate residential long distance and metered commercial long distance. The market is used to having different prices for local phone services already.

MCI offers unlimited calls

"The heavily unregulated DSL market has been virtually monopolized and the cost of DSL has gone up in the U.S. from $39 to $49. It costs $29 (US) in Canada for the same service. Right now, Canadians are twice as likely and South Koreans are four times as likely to have broadband access than Americans. Thats pitiful. "

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