Any guesses that the city officials who passed this have an ownership stake in (or kickbacks from) the few area telecom operators who can provide internet service?
I see they're upping the ante in the War Against the Poor [1].
By ensuring that all restaurants have higher operating expenses, they can see to it that prices stay high. And if every restaurant has to do it, then there's nowhere left for a poor person who doesn't even own a wifi device to go.
Bravo! Now we just need to wait until the poor starve.
</sarcasm>
OK, I'm being hyperbolic, but the point remains that they're ensuring that prices will be higher than they otherwise would, and are taking away the consumer's ability to choose what attributes they want to pay money for.
There will be non-restaurants that will provide food.
The bigger concern is
1) restaurants on the border going out of business
2) the unequal benefits derived from those using Wi-Fi more than others (ordinary eaters and email users will be subsidizing movie downloaders)
Maybe this will allow people to pay for a coffee and access the internet everyday which they could not otherwise afford and translate into grassroots innovation?
But people are already allowed to do so: there already exist Starbucks and other restaurants that offer the service. What is changing is that people will be forbidden from choosing a restaurant that doesn't provide the free service.
they could not otherwise afford
TANSTAAFL - This regulation doesn't mean it's free - you can be assured that customers will be paying for it. All it means is that the cost will be amortized across the prices of the restaurant's food. The result is that a person who doesn't want wifi still has to pay for it. And thus, at the margin, someone who could barely afford a meal will not be able to afford [meal+wifi].
Is it really the case that the poor are eating out at restaurants and will "starve" if restaurant prices increase? I do not think it is. In fact, I might suggest that this measure would save money for the poor: if restaurant prices rise, perhaps they'll take the hint that cooking at home is cheaper and then save more money? I'm aware my scenario is purely conjecture, but I think yours is equally fake. There's no way that restaurant prices will reduce the poor's ability to eat food.
Yes, as I acknowledged in my first post, I'm being hyperbolic. But it's absolutely true that the regulation will force potential diners to spend money whether they want to or not.
Thus, to your point, it's likely that the total amount of restaurant dining in Kuala Lumpur will decrease. Some people will choose not to pay the higher price, and stay home.
If you're playing armchair economist you can do better. First, you need to account for the relative price elasticities of supply and demand to determine who the burden will fall upon. Presumably some business-owners will also see their costs rise. There may also be additional regulatory compliance costs in excess of the cost of the wifi connection cost itself. It also may mean that would-be restaurant owners cannot run services anywhere that it's impractical to run wifi. All this may discourage new business. And maybe it's not a big deal for this one regulation, but how many other similar small regulations will a business face when it's starting up? Dozens? Hundreds?
If you're playing armchair economist you can do better. First, you need to account for the relative price elasticities of supply and demand to determine who the burden will fall upon.
As the saying goes, being a good economist entails understanding what is not seen. I think you hit a bunch of those in this post, and I think you're correct across the board.
Well this is interesting but unfortunately i see the information gap broadening here. In my country (India) most of the restaurant owners don't even know what WiFi or smartphone is let alone maintaining their online presence.
