Uncategorized

Phone monopolies reap vast fortunes while overcharging customers for subpar service

When I was growing up in the 1970s, phones were strictly used to talk to people out of earshot. They were hardwired to walls and a cord connected the handset to the base. A home’s main phone was usually in the kitchen, which meant most calls took place there, too.

Phones today are entirely different, as is how we think of them.

My smartphone is a relatively tiny supercomputer capable of modes of communication few could have imagined in my youth. Instant connectivity, now more so through texting than calling, is ubiquitous.

Answers to most questions can be found using a smartphone’s chosen search engine and math teachers can no longer tell students they can’t go through life carrying a fancy calculator in their pocket. And yet many are the days I’d like to go back. Not for the slower pacing of communication with far fewer daily interruptions, though there is that. 

No, at issue is that while much of the (seemingly miraculous) technology behind smartphones has been, and continues to be, developed in the United States, Americans pay more for less reliable cellphone service than citizens in most other developed nations.

There are two primary reasons for this. One is a lack of competition. In the past half century, the federal government has gotten soft on monopolies, which, as a result, have grown. Two companies, AT&T and Verizon, control the majority of U.S. cellphone plans.

The second is a similar government softness on regulation. The service for cellphones, which have overwhelmingly replaced landlines in the United States, is a significant percentage of most average households’ utility expenses.

For many years, my children and I were AT&T customers. When in 2011 we moved less than 2 miles away, we could not get reliable cell service inside the new house. AT&T’s response was to set up two small signal towers inside the home for a fee, promising me our cellphones would have reception equal to our old landline. Yeah … nope. We continued to walk around our house repeatedly asking, “Hello? Can you hear me now?”

My then-partner was a Verizon customer and did not suffer connection troubles in the house or anywhere else. Eventually, we moved onto his plan. That worked well and when I left my ex, my sons and I moved to our own Verizon plan.

And yet, whenever we called someone’s landline (mostly elderly friends), the caller ID would give my ex’s name. I spent a ridiculous amount of time calling Verizon with what proved to be futile requests to fix this problem. I decided the solution was to go back to AT&T. And I figured it’d been a couple of years so surely AT&T’s connectivity quality had improved on my side of town. Again, yeah … nope. 

The boys and I returned to Verizon last fall for the superior connectivity. But as soon as we switched, multiple people told us their calls to us chronically failed. I missed several calls from an eventual employer, who luckily knows a friend of mine who told me about the calls not connecting.

For several weeks, my boys and I called Verizon about our inability to receive all calls. I also repeatedly asked that my activation fees be waived. Our connections were not fixed nor our activation fees waived until I became exasperated enough to file a complaint with the Ohio Attorney General’s Office.

Activation fees are simply monopolies getting away with making customers pay for the privilege of paying for cell service that is less reliable and more expensive than it should be. It’s like a playbook page from organized crime: You wanna do business with us? You gotta grease some palms. 

Customer service reps told me the activation fees are necessary to keep cell tower equipment in sterling condition. Baloney. Between July 1, 2022, and June 30, 2023, Verizon’s gross profits were $78 billion and AT&T’s were $72 billion. 

In other words, Verizon and AT&T have more than enough money to maintain superior infrastructure without shaking down customers for money for nothing.

This summer, my incoming calls were once again not connecting. After Apple checked my phone and found no issues, the boys and I switched to T-Mobile. The connectivity was not great, but that’s not why we quickly moved back to Verizon.

We switched back because they billed us $1,725 for two phone purchase plans and other perks they can legally remand if a contract is broken in fewer than 24 months.

Even after we returned through Verizon’s Winback program, the company tried to pull the $1,725 from my bank account. Several other erroneous charges remained as well until I, once again, contacted the Ohio Attorney General’s Office. Soon thereafter, a very helpful Verizon corporate representative began fixing our account.

The representatives, both in the stores and on the phone at all three cellular companies, have been professional and courteous. It’s important to remember that the employees do not make their employer’s policies and understandable frustrations should never be taken out on the person just trying to make a living.

Last fall, the Biden administration announced an initiative to reduce or eliminate junk fees charged to consumers. Cellphone service activation fees — which are $35 on average for each line on a plan — should certainly be at the top of the list of fees to be outlawed.

Meanwhile, our legislators, including Akron’s congressional representative, Emilia Sykes, and U.S. Sen. Sherrod Brown, should seek to replicate the policies adopted in Europe that increased the number of cellphone companies, and thereby competition, which in turn improved service and lowered consumer costs.

This column was first published in the Akron Beacon Journal on September 3, 2023.

What do you think?