Saturday, August 27, 2005

Phone company posted rates are completely meaningless

A Monthly Mystery - New York Times

Well, not completely meaningless. You know the monthly fee will be higher than whatever is published. I've blogged on this before and sent letters of complaint to our state attorney general. At last the New York Times has noticed:
Although surcharges have been around for a while, they have been growing and more consumers are complaining that such fees have become a backdoor way for phone companies to raise prices while keeping advertised rates low.

The carriers might promote flat-rate phone plans for, say, $49.99 a month, but once the many indecipherable fees are larded into a bill, a customer may actually pay $10, $20 or more a month.

"The proliferation of these charges is happening because the carriers are playing a shell game, plain and simple," said Thomas Allibone, an independent auditor and a former member of the consumer advisory committee at the Federal Communications Commission. "They'd rather weather a customer's complaint because they are making $20 or more in surcharges."

...The phone companies say that the surcharges are legal and that they have the right to keep them out of the advertised price of calling plans as long as they are explained on Web sites and in service contracts.
I wrote my letter to our attorney general about Sprint when I tried to get a copy of contract that explained their pricing. Oddly enough, they couldn't find one. I tried quite a bit.

In our increasingly libertarian world, caveat emptor is a slogan to live by.

Alas, the fundamental problem is that, in a sufficiently complex environment, we are all stupid. There is some point at which we can't keep up and we simply surrender all hope. Cheap computing power is enabling scams of great complexity, such as intricate ways to disguise true prices. We could negotiate one such scam, but not a hundred. How many people have thought through the full implications of various Digital Rights Management schemes, and how those schemes decrease the value of DRM protected media?

Bottom line, barring regulatory action, this will only get worse.

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