City WiFi Virus

About a year ago when I first read about efforts by the large phone and cable companies to block City-wide WiFi projects, I felt as though they were taking advantage of me. After all if one of these networks were built in my town I would receive free wireless Internet and save $50 a month. It wasn't until a few months afterwords that I heard a piece by Larry Kudlow that helped me remember capitalism still does work. If a government is allowed to participate in funding of a city-wide network, we are allowing a intervention in the free market that was not broken. This type of intervention is referred to by Milton Freedman as the "neighborhood effect," which in effect is violating the voluntary exchange principles of capitalism.

In principle if a city pays for a "free" wireless network, this obviates all possibilities of voluntary exchange. Now, computer or not every citizen will be purchasing wireless Internet with their tax dollars. Don't forget the private companies that have invested millions/billions of dollars to provide the wireless Internet that they were willing to sell to anyone that wanted it (Voluntary Exchange.) By allowing these networks, Cities and Towns must realize that they are accepting the status quo, while at the same time helping to oppress new technological innovations.

Arguments that these networks are essential for cities to attract new business and commerce are weak political attempts to justify government intervention in the marketplace. Setting aside cost/benefit or the fact that these businesses would likely never use public WiFi for security reasons. Consider that a business did use the network for all of their Internet needs, and they would pay for it through some portion of the taxes they paid. Their total tax payments may in no way reflect their reliance on the WiFi system, resulting in paying far too much or not enough for their respective usage. Wouldn't it be more efficient if they paid for Internet usage separate from their taxes, and companies not using the Internet didn't pay for Internet.

Fly CAL

My purchase of CAL two weeks ago was a bit early for market conditions. I noticed that things were becoming irrational last week for most airline stocks especially CAL. The market was too heavily focused on Ernesto and Iran. I added to my position of Jan 30 Call Options mid week to bring my basis down to 1.31. Looking back a few more options @1.00 on Friday afternoon would have been a good call, but didn't want to overload the position. The options closed @ 1.15 today, with no trades in the afternoon when the ask reached 1.35. CAL should be able to take advantage of falling oil & gas prices due to their hedging strategy (or lack of.) CAL's strategy has been to hedge future full purchases only as seats on flights are sold. This doesn't really seem like a hedge, but more of a prepayment. This strategy should serve them well if prices begin to moderate, as they will not be locked into longer term contracts or worthless futures.