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Businessweek Archives

A View Of Nafta From The Border

Readers Report


As a BUSINESS WEEK subscriber for the past two years, I would like to compliment you on "The Border" (Cover Story, May 12). Being of Mexican heritage, I have grown up in a world of two languages and cultures. I'm currently attending the University of Texas at Brownsville and working on my MBA in the evenings, so I enjoyed finding out more of what NAFTA was all about. There are so many different components of the accord.

In the long run, all three countries will benefit from the signing of the agreement. Although many will argue that jobs have been taken south of the border, which in some cases is true, we must also look at the increase of exports. Keep reporting on those business issues that are of importance and interest for many of us.

Juan Ortiz

Brownsville, Tex.Return to top


Amy Barrett's commentary on universal service support for rural companies, "But do Aspen and Vail really need phone subsidies?" (News: Analysis & Commentary, May 12), illustrates how easy it is to confuse reality with politics. Universal service makes it economically feasible to provide basic telecommunications service to high-cost areas--remote regions with sparse populations and often challenging terrain. Telephone networks in such areas must conform to national standards to connect with the rest of the country's phone networks. Few consumers in these areas, regardless of their economic status, could afford to have their phone bills more than doubled--to the real cost of maintaining these phone networks. To withdraw universal-service support from high-cost areas and, instead, provide phone vouchers for low-income users means that rural middle-class America pays the difference.

Economists and policymakers prefer to point to the power of the marketplace as the best means for determining costs for consumers--but there isn't a marketplace in the world that can overcome the extreme costs of operating in iron-hard mountains or soupy swamps--where the consumer population can be counted in single digits. And few big phone companies look eagerly to these places for expansion. Why risk serving a high-cost market when more lucrative options are within reach?

All Americans deserve comparable telephone service; to allow a disparity in service is to promote geographic haves and have-nots. Let's hope the decision does not rest on which areas have the highest ratio of voters per square mile.

John N. Rose, President

Organization for the Promotion

& Advancement of Small

Telecommunications Companies

WashingtonReturn to top


Your article--suggesting that airlines might be "out to crush the online travel industry" and that actions limiting commissions might be "fatal" to certain travel agents--missed a very important point ("Clipped wings on the Web," News: Analysis & Commentary, May 12). The airlines no longer receive the benefits they once did from travel agents. The airlines' 10% commission to travel agents has its roots in an era when airline prices were fully regulated and ticket technology was quite primitive. A travel agent was truly an "agent" of an airline. All airlines charged the same price for comparable service. Travel agents helped attract customers and wrote tickets for specific airlines.

Today, a great deal has changed. Airline prices are fully deregulated, and ticketing technology, largely paid for by the airlines, has evolved. Travel agents represent consumers more than they represent a particular airline. The leisure traveler wants the lowest fare and will fly only on the airline offering it. Business travel is tied to specific carriers by airlines' frequent-flier programs and rarely will change simply because a travel agent suggested it.

If the services provided by a travel agent are really worthwhile, it would seem that those benefiting from them should pay. Yet little travel-agent revenue comes from travelers. If the consumer doesn't see enough value in travel-agent services to pay for them, why should the airlines have the responsibility to keep them in business?

Douglas D. Hagestad

Flossmoor, Ill.Return to top

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