Posted on May 29, 2010, Printed on May 31, 2010
http://www.alternet.org/story/147037/
If you're not angry with AT&T, Verizon, T-Mobile and Sprint -- America's
four national wireless providers that reportedly control 90 percent of the
market -- then here's some ridiculous news to raise your righteous ire.
Perhaps you'd be interested to know about one of the most outrageous cell
phone scams? It's simple: Charge customers for being forced to listen to 15
seconds of unnecessary voicemail instructions reminding them how to leave a
message after the beep. According to *New York Times* technology writer
David Pogue, if Verizon customers leave voicemails or check their messages twice a day,
the mammoth New Jersey-based telco takes in around $620 million. In return,
you lose wasted hours of your life and have to pay for it.
Speaking of Verizon, have you heard about the representative who
refused to shut down a dead man'sserviceeven though his daughter produced a death certificate and needed the account closed so settlement of his estate could proceed? Or the rep who tried to
collect an overdue $308 bill from customer Al Burrows by threatening to, and
I quote, "blow your muthafucking house
up
Do we need to even talk about AT&T's various
controversies,
from censoring Pearl Jam to allegedly helping the National Security Agency
unlawfully monitor the American people's communications?
The telco giants' latest disgrace, according to a recent Federal
Communications Commission report, has been given the egregious name of "bill
shock" (PDF)
Which is a misnomer, actually: it's certainly not shocking to find, as the
FCC explains, that "30 million Americans -- or one in six mobile users --
have experienced...a sudden increase in their monthly bill that is not
caused by a change in service plan." It's even less alarming to discover
that "nearly half of cell phone users who have plans with early termination
fees (ETFs) -- and almost two-thirds of home broadband users with ETFs
--don’t know the amount of the fees they’re accountable for."
"In January, we sent letters to the major wireless providers asking the
rationale for their ETFs," FCC spokesperson Rosemary Kimballl told AlterNet.
"While the business model of subsidizing phones by the ETFs is the carriers'
choice, our position is that the ETF charge must be made clear to the
consumer when he is signing the contract. And this does not seem to be the
case in many instances."
It is the kind of obscure legalese the industry is known for. Their
contracts are dense with clauses that no self-respecting human should have
to wade through, just to place a call or send a text. ETFs are a
particularly blatant insult to wireless customers, who can't leave an
underperforming carrier (and that's really all of them) without forking over
hundreds of hard-earned dollars. In fact, AT&T just nearly doubled its $175
early termination fee to $325 in May. That cold, capitalist logic is built
specifically for bottom lines and earnings reports, not for flawless
customer service. ETFs are financial shackles to mediocrity, and they're
just the start.
According to Wisconsin Democratic Senator Herb
Kohl the telcos have fortified their industry monopoly with other scandalous
pricing. Between 2006-2008, the cost of sending and receiving a text message
rose 100 percent. The average American consumer pays approximately $500-$600
a year for wireless service, which is practically more than any other
developed nation. Of course, iPhone addicts -- who are chained to Apple's
exclusive contract with AT&T until the probably inevitable Verizon
contract arrives
in 2011 -- pay around twice that annually in various subscription fees. This
in spite of the fact that AT&T, Verizon and Sprint continually rank among
the worst in the
nation
when
it comes to customer service. Or that suchearly termination fees are
arguably illegal
depending on which judge you ask.
"We want consumers to know that they can avoid the ETF by using prepaid
phones," Kimball added. "And we have recently released a public notice
asking for comments from consumers and the industry on how customers can be
made aware they are about to incur unexpected charges. We asked whether a
model like that used in the European Union, where customers must be alerted
when they are about to incur roaming charges, would work in the United
States."
Mandating that the wireless industry warn their customers before they
variously fleece them is a great start. But bridging the price gaps between
the carriers and their carrion is going to take a while.
"A big part of the problem is that this country is such a huge landmass,"
Pogue told AlterNet. "No one cell phone carrier can cover it all, unlike in
Europe and Japan. Therefore, people have to buy from the company or two with
coverage where they live, so there's very little competition. The cell
companies can essentially get away with whatever they want."
This geographical reality has produced a wireless market that is a
functional duopoly. Although Verizon and AT&T are only half of the big four
carriers, they actually control 60 percent of the wireless
market
between
them. Can you hear me now?
"We don't have equivalent providers in the marketplace," Consumers Union's
wireless, phone and Internet policy analyst Joel
Kelsey
told
AlterNet by phone. "There are tell-tale signs that this is not a competitive
market: the ubiquitous existence of early termination fees that have been
continually raised; the inability of consumers to bring their smart phone
investments with them from carrier to carrier; parallel and consistent price
increases in text messaging, despite the fact that the cost to provide that
service is declining; the opaque nature of data overage charges. Everything
seems randomly tacked on."
Bringing transparency and purpose to that random pricing is a primary
objective of the FCC, which seems to have finally come to its senses under
the leadership of chairman Julius Genachowski, who was nominated by
President Obama and confirmed by Congress in 2009. He's a long way from the
national joke that was FCC chairman Michael Powell, son of Colin, who
disastrously deregulated the industry while simultaneously levying
ridiculous obscenity penalties on networks airing Janet Jackson's breast,
Bono's expletives, Howard Stern's show, and even *Saving Private Ryan*. But
the new FCC regime is going to have its hands full bringing AT&T and Verizon
to heel, although its task will be helped by the telco titans' continuing
insults. But they're not giving up without a fight, especially when they can
charge anything for whatever.
"The FCC is talking about a common sense way of giving consumers more
control to help them realize cost savings," Kelsey said. "Consolidation is
increasing and the market is dwindling toward a duopoly, because AT&T and
Verizon have the best deals with the handset providers, who have the most
consumers. And they have very little incentive to invest in their own
network; investment in the network as a percentage of revenue has actually
declined. And they own the lion's share of the wireless spectrum."
At the 2008 wireless spectrum
auction,
Verizon actually sued the FCC for having the temerity to rule in Google's
favor that the five available spectrum blocks remain
open>to
services, applications, devices and networks. Verizon eventually dropped the
lawsuit, and nearly $5 billion on the FCC for the coveted open-access
C-block, but we're a long way from non-exclusivity. And further auctions
kicking off in the years to come are sure to be as contentious, especially
now that FCC chairman Genachowski has argued that the nation is due
for a "looming
spectrum crisis
because of the burgeoning desire for mobile broadband.
"There are a number of political undercurrents at play," Kelsey explained.
"The government has been trying to get as much money as possible out of
auctions, and that certainly raises the question about what is the most
effective use of the spectrum and doesn't take into account the interest in
public use or social good. It's not clear what the FCC wants or plans to do,
but their actions over the last several weeks have been great. They're
showing that they're interested in broadband mobile as a check on current
practices."
Which is great, because the bill for current practices is getting larger and
more unreasonable by the year. The check is going to need to be a big one.
Those purposefully ridiculous fees and charges from the telcos aren't going
to pay themselves.
*Scott Thill runs the online mag Morphizm.com <http://www.morphizm.com/>.
His writing has appeared on Salon, XLR8R, All Music Guide, Wired and others.
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