Gouging by Wireless Carriers

Producers: Stevie Converse and Candace Clement
Media Minutes, August 21, 2009

Text: http://www.freepress.net/files/MM_8-21-09_Transcript.doc
Audio: http://www.freepress.net/audio/download/71948/MM+08+21+09.mp3

Most people complain about their cell phone carriers. But for Mike Elgan, a journalist for Computerworld.com who has been writing about technology and consumer electronics for 20 years, the problem isn't just high prices and lengthy contracts.

In his recent article "Wireless Carriers: 10 Things I Hate About You," Elgan explained that this was an industry not only engaged in price-gouging, but whose anti-competitive practices have left the United States wireless industry lagging dramatically behind the rest of the globe.

Mike Elgan: Carriers seem to specialize in finding ways to get money for nothing. Recorded messages, the SMS charges, all that kind of stuff. Instead of innovating and competing with each other, and doing what the consumer electronics industry itself does, which is always better, faster, cheaper, better customer service and so on, carriers are just looking for ways to gouge you.

For example, Elgan points to the recent work of New York Times columnist David Pogue, who uncovered how much wireless carriers were making from longer calls by forcing consumers to listen to unnecessary instructions before leaving a voicemail.

Voicemail: At the tone, please record your message. When you are finished recording you can hang up, or press one for more options.

Mike Elgan: They make about $620 million a year from that message. It's just a thing that they force on everybody so they can get more money.

Elgan compares the practice of locking specific phones to specific providers to another familiar practice.

Mike Elgan: They want their customers to be like people who go to the movies. There's no other food, you can't bring your own food, you have to spend $5 for popcorn, and you know, $4.50 for a big cup of sugar water because they've got that monopoly. Well that's what the carriers want, too.

Ultimately, Elgan explains, the carriers forget the fundamental principle that the public owns the airwaves.

Mike Elgan: I have a tendency to be kind of libertarian, free market kind of person. And I think generally speaking when the government meddles they tend to make things worse, not better. But when it comes to the cell phone carriers, they are not making widgets. What they are doing is using a publicly owned service. When they send electromagnetic signals through the air, they're actually using something that belongs to the people, to the voters, to the citizens.

You can read more of Mike Elgan's work at his blog, The Raw Feed, at http://www.therawfeed.com.