The People vs. Cell-Phone Tyranny: A Case for Lower Monthly Bills

[...] post: The People vs. Cell-Phone Tyranny: A Case for Lower Monthly Bills …Related PostsNokia Launches Mobile Payment ServiceDr. Gwenn Is In: Please Note: “No Cell Phones” [...]

Regulators in Europe are steadily moving to lower rates and cell-phone fees—and Europeans already pay less for wireless than we do. The average cell-phone customer in Sweden and Finland pay $11 or $12 a month, or about five times less than the average American pays.

Why? It’s not because we have better service, or because folks in Scandinavia use their cell phones less than us.

It seems the entire conclusion of this author’s diatribe against the US phone industry is flawed. In fact, the US cell phone user averages 6 times more talk minutes than does the average European.

http://arstechnica.com/telecom/news/2009/08/americans-pay-5-times-more-than-netherlanders-for-wireless.ars

We can only conclude the author has an agenda or does not research what he spouts out. But this is TIme, so I expect such reporting.

atlas1776, to say “this is Time, so I expect such reporting” to qualify your comment that the author has something against the phone company. I don’t know what is wrong with people in America these days, maybe we enjoy getting ripped off, or think it’s a right to get ripped off, but you make it so easy for it to happen. The phone company is the biggest rip off ever, always has been. Fact is it does not cost what you are charged to make phone calls. The technology has gotten so much better that there are not even any people taking care of they systems, they are automated. What you are getting charged for are the commercials, ads, etc. My daughter uses the internet to make her calls and we pay nothing for that. Fact is we are an easy target. The whole home phone vs. cell phone should be a non issue by now. Cell phone companies know the gig is almost up, which is why they are going into different deals to keep your business. Ever wonder why there is no universal charger for every phone? Shouldn’t you just be able to recharge the phone without having to pay 10+ for a new charger every time you get a new phone?? It’s a gimmick. We’ve all been had, not just you. Cable is another rip off. Does it cost any more to transmit cable programming than regular programming? No, but it’s “special” so you pay more. As technology advances these things will slowly be phased out, just like tape decks and CD’s.

It’s hard to believe that the major carriers AREN’T taking us for a ride. Here’s an example: A while ago I had a basic contract with one of the major carriers. 450 minutes cost me over $50 after all the hidden charges and service fees etc. Reception was kinda spotty. 411 calls were close to 2 bucks, overages were charged at 45c a minute! I had to pay extra for a texting plan, otherwise a single text cost me 25c. Data was something like 2 dollars a Mb.

I switched to Straight Talk and now get 1000 minutes and 1000 texts, free 411 calls and 30mb of data for just $30. This is not a niche product with coverage in a single city or something – it works on Verizons nationwide network.

So if you compare the two it really is hard NOT to come to the conclusion that we are, in fact, being ripped off by the major carriers. I think I’m right if I say that not one of the major carriers will give that much for even double the price.

The “6 times” figure comes from CTIA, a wireless trade group that most certainly has an agenda. I trust the Organization for Economic Cooperation and Development (OECD) way more. It is comparing apples to apples: same # of calls, same # of SMS messages, and yet a huge disparity in what it costs the cell phone customer in Finland ($11) and the U.S. ($53) for the exact same usage.

Anyway, there are most certainly lots of Americans who use their cell phones just as often/infrequently as folks in Finland. Do you think that these Americans pay $11 a month?

I have no agenda, other than trying to bring attention to what I see as practices that are unfair to American consumers. I personally have a pay-as-you-go cell phone, and I use it so infrequently that I wind up paying less than $11 a month, on average.

This person obviously hasn’t read the report carefully. Take a close look at the OECD report. US minutes include both outgoing and incoming unlike the European ones. Why? Because unlike European carriers, US carriers charge us when someone calls us, not just when we call someone else. If you think about it, the average non-chatty person probably receives a lot more calls than they make so this inflates the minutes. If you look at another graph in their report that shows outgoing only, the U.S. is comparable in volume to European countries. If this weren’t soyou’d be left with arguing the silly notion that Americans were somehow 5 times more talkative than Europeans.

Beyond this, any argument about these statistics does nothing to blunt the argument against what is basically a utility (moving bytes of data between point A and B) being allowed to have a stranglehold over services. Imagine if the electric company proprietized their electric power delivery format so you could only use it with their own brand of appliances.

[...] we have better service, or because folks in Scandinavia use their cell phones less than us. The People vs. Cell-Phone Tyranny: A Case for Lower Monthly Bills – The Cheapskate Blog – TIME.com I wish it was so – but too many legislators in the pockets of cell phone providers – IMO! [...]

Ah, so an organization, the “OECD,” that ostensibly works “For a stronger, cleaner, fairer world economy” most certainly must do just that, right? However, a trade group, the “CTIA,” that strives to “Expand the wireless frontier” must be evil? (Note: these slogans were taken from their respective websites.)

Yes, I’d say you have an agenda or at least the inability to see facts. You see, both organizations are telling the truth on this, and I believe them both. Neither has publicly argued the numbers given by the other are “lies.” However, the CTIA has argued that the numbers given by the OECD are not the full story.

If I believe both, doesn’t that make me the “non-partisan” and you the “partisan?” Interestingly, you are the one with a Journalism degree!

The OECD showed numbers that simply made a phone call or sent a message. The phone call, for all we know, was one minute (their graphs do not tell us otherwise). I will even grant that the OECD may have had a fixed number of minutes for each call. However, as the CTIA has said, the number of minutes those in the US average is between 3 – 6 times the average minutes used by European callers. This is something the OECD has apparently agreed with, as they haven’t countered the CTIA’s numbers.

Interestingly, the OECD claims, in their spreadsheets, to not have included any sort of “Friends and Family” program in this current study. We know a large number of cell phone companies in the US do, in fact, have such programs included in their packages. I can’t say I know of any European phone companies that do likewise, do you?

Also, the US is 10 times the combined population of those countries, with over 12 times the land area to cover. This further shows the US to be at a “land disadvantage,” costing US companies more to cover.

You said that folks in Scandinavia didn’t use their cell phone more than those in the US. You have given nothing to prove your assertion, the CTIA has shown otherwise, and the OECD appears to agree with the CTIA.

Where does that leave you?

Clean up your act if you want to be taken credibly.

As you state:

“Anyway, there are most certainly lots of Americans who use their cell phones just as often/infrequently as folks in Finland. Do you think that these Americans pay $11 a month?

I have no agenda, other than trying to bring attention to what I see as practices that are unfair to American consumers. I personally have a pay-as-you-go cell phone, and I use it so infrequently that I wind up paying less than $11 a month, on average.”

Well, apparently there ARE people in the US “paying less than $11 a month, on average!”

So much for that argument.

One more item of note. In the US, the cell phone contracts include a subsidy to pay for part of all of the phone used on the contract. In Europe, you buy your phone with your own money and then choose the provider for your monthly service, with contracts lasting no longer than 6 months.
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That is something else that makes the monthly US contract an even more attractive buy.

Hi Brad — I’m John Walls, vp of public affairs for CTIA-The Wireless Association. I wanted to provide you with the facts on why the OECD numbers were flawed.

The OECD defines a “medium use” customer as someone making 780 minutes of calls a YEAR, and sending 600 SMS and 8 MMS messages a YEAR. And the report says that based on their methodology, a U.S. customer would pay $53 a month in order to get that level of service.

However, we know that the average U.S. consumers uses around 760 minutes a MONTH, and over 400 text messages a MONTH.

Even if we only count half of those minutes as outgoing minutes (to mirror the OECD assumption), that’s still six times as many minutes as the OECD methodology assumes.

The OECD event admits that the U.S. is different on page 275 of their report. They said, “It is important to note again that the OECD calling pattern in the basket can be significantly different than common calling profiles in a specific country. For example, the high-usage OECD basket includes 1,680 outgoing voice calls per year while users in the United States average 9,600 minutes of voice calls (combined incoming and outgoing) per year. In this case the basket provides the cost of buying exactly the calls and messages in the OECD basket rather than what may be considered a ‘typical’ bundle in the market.”

I would welcome the opportunity to talk with you on this matter and address any other questions you may have about the wireless industry.

Hi, thanks for your comment. I’m well aware that the average American’s cell phone use is way more than the “medium use” customer described by OECD. But I still don’t understand why that medium use customer has to pay so much more for the same # of calls in the U.S. compared to Finland or whevever. Americans seem to only get their money’s worth if they use their cell phones A LOT and they opt for one of the (pricey) unlimited minutes plans.

Well, you now have the VP of Public Relations following up with you, explaining that the OECD mentions the disproportionately high US usage on page 275 of their report. You read the report, right? It seems that the holy OECD only allows “journalists” and paying customers access to the report. I know, because I’ve tried to get it.
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It appears you either overlooked page 275, in which the OECD basically backs up the CTIA’s numbers. It is my guess that you chose to throw out wise-ass comments against businesses without ever reading the thing you spoke to us about. Really, I expect more from an official, degreed, “journalist” working for what was once a major publication (until a ton of readers bailed).
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Really, your column and your comments just tell us how clueless people are with your perspective.

The only way I pay less than $11 a month is because I use like 100 minutes a year, if that. If I was a “medium use” profile and used the same phone I had, I’d probably be paying something like $50 a month, maybe more.

CTIA has a point that the average American customer uses his/her phone more than the average customer in most countries. But the OECD is not comparing the average American customer to the average customer in Finland or wherever. It is comparing the same # of calls to same # of calls, it’s a valid comparison. I think what’s muddled in all of this is the idea that “medium use” equals average in any country; they’re different, and I admit helping to muddle things up by using the word “average” when I should have been more specific in describing what the OECD meant by “medium use.”

The billing structures are clearly different from country to country. I’d just like the option of fitting the “medium use” profile described by the OECD and paying closer to what they do in Finland. That doesn’t seem possible in the U.S. right now.

Considering the high cost of cellular service in the U.S., customers are beginning to take notice and seek out cheaper alternatives. For example, I work with Consumer Cellular, a national cellular provider that offers monthly billing with no contracts and plans starting as a low as $10 a month. The phones are simple and the plans straightforward. Plus, the company offers a risk-free guarantee for the first 30 days or 30 minutes of use, whichever comes first, and Consumer Cellular will even pay for shipping costs. As a result, the company has grown more than 275 percent since 2005! Its amazing how loyal customers can be if you allow them to change their plans anytime and not pass on extra fees or require contracts.

FACTS

dude, you really need to try reading.

in europe and asia, cell service is CALLER pays.

in USA, cell service is RECEIVER pays. Which really SCREWS up the USA cell system. Because who the fr*ck wants to pay for JUNK CALLS.

So, sorry, socialism still SUCKS. This is not the Trilateral Commission trying to hold down the “little guy.” Just a poor FCC decision that was made a long time ago.

I signed up for Straight Talk and pay $45 for unlimited talk and texts. It’s prepaid, so no funky contracts or surprise charges.

Of course most people overpay. But I don’t!

[...] Wikipedia has a long interview with wireless industry spokesman Chris Guttman-McCabe. It’s interesting, but can be summed up by one sentence from him, in the second of three parts of the interview: “I don’t think prescriptive rules are necessary.” Well, he would think that, wouldn’t he? (For a good list of criticisms, see 10 Things We Hate About Wireless Carriers and The People vs. Cell-Phone Tyranny.) [...]

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[...] The People Vs. Cell-Phone Tyranny: A Case for Lower Monthly Bills [...]

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