Intent on “Living in Poverty”? Investigate How America’s Communications Companies are Holding the United States Hostage.

The chart above has 2 parts: the left is from a paper flyer containing an advertisement from Spectrum, New York dated November 2021 and it shows that 1Gig of service costs $14.00 per Gig. The part on the right is taken directly from an advertisement from the French company “Free” wireless, that features two services being offered in France; the first is for 80GB for 9.99 Euros (about $11.20 bucks) or 150GB for about $22.40 US. (NOTE: The exchange rate was 1 Euro = $1.12 dollars, and we are rounding the numbers in some cases.)

“GB” or “Gig” or “Gigabytes” are the tech terms for the quantity of stuff you can use on your broadband wireless or wireline connection online. Thus, watching a movie or being on Zoom uses up your Gig allowance.

How is possible that in the US, a company can charge $14.00 per GB for wireless while this French company’s service delivers 1Gig for around $.15 cents? This example, and the new research we will discuss, demonstrates that America is being held hostage by a few US companies, AT&T, Verizon and CenturyLink, that have taken control of our communications services, giving them carte blanche to charge us massively excessive, inflated prices. Worse, these telecommunication holding companies, that control state-by-state the public telecommunications utilities, have held the US hostage for decades; they are responsible for the creation of the Digital Divide, where the prices are no longer affordable to many. However, at the core, these companies not only failed to upgrade most of America’s critical utility infrastructure, creating a ‘digital desert’ where large areas of America, especially rural areas, were left to deteriorate, they also unlawfully transferred billions of dollars of the construction budgets that should have been used for these upgrades, to their wireless operations. This string of bad acts helped to reinforce poverty in America, through slow broadband speeds and extremely high prices — or no services at all, creating economic growth harms in cities and to those who should have benefited from being connected.

And how can those who claim they want to fix the Digital Divide — and make prices be affordable — want to give massive government subsidies to AT&T, Verizon and CenturyLink — and the cable companies, Comcast and Charter, when they are the ones who have been able to create this massive financial and economic disparity?

Where’s the Wired Fiber Optic, State-based, Telecommunications Public Utilities We Paid for?

Unfortunately, all the questions that should be asked and answered and all of the financials of these companies that should be audited and investigated are not going to happen anytime soon.

The knee-jerk reaction to fix the Digital Divide, now that it was exposed by the pandemic, is simply to throw money at the same companies that failed to show up. The Biden plan never mentions auditing these companies; there is not even a mention of AT&T or Verizon or CenturyLink, the three holding companies that control the state-by-state public utilities, who let the utilities under their control deteriorate. And there is no mention that instead of upgrading America to fiber — the fiber now is being used to roll out their wireless services. — which left most of rural America with no high-speed broadband or direct competition to whatever the cable companies rolled out.

One has only to stare at a map of any state utility and the lack of fiber optic broadband by AT&T, CenturyLink and Verizon to realize the holding companies that were responsible and control the states’ primary critical infrastructure never showed up. Ironically, since AT&T et al. never showed up, the cable companies have been able to charge whatever they want and add made up fees, such as the ‘Broadcast and Bullsheet fees’, or the “cost recovery” fees — all of which should have been part of the cost of doing business.

How pathetic is it? There was an “EBB” “Emergency Broadband Benefit” of $50.00 that can be used by qualifying low-income families to offset the costs of broadband service, and it was lowered to $30.00 in the Biden plan.

But, there’s a rub;. The companies get to collect their “business as usual” retail charges, which includes the “cost recovery charge” reimbursement, as well as paying the super-retail modem rental fees.

The rest of this article exposes the overcharging of America for wireless and wireline broadband services, including the ‘triple play’.

And a caveat: There are plenty of ‘deals’ for wireless, but when the companies discuss this, they virtually never supply the actual price with all of the made up fees, etc. and caveats, including promotional pricing.

US Wireless Prices Are Out of Control as Compared to the Rest of the World.

New research from Rewheel Research on wireless pricing for 2021 found that overseas, customers can get 100 Gigs for a fraction of the costs we pay in America. In Italy and France, wireless with 100 Gigs averaged $9.50 US dollars a month. This comes to less than $.09 cents per Gig, though it varies by carrier. Free’s current offer is 80GB for about $11.20 US, or $22.40 for 150GB.

This chart highlights the results of the Rewheel Research quarterly survey of wireless services, including the ‘lowest cost for wireless’ from around the world.

“Among the ten operators with the lowest monthly prices for 100 gigabytes where operators from the Israeli, Indian, Malaysian, Romanian, Italian, Chilean and French markets.”

§ “In September 2021, the minimum monthly price for 100 gigabytes was 7.99 EUR in Italy and 8.90 EUR in France. “

§ NOTE: The Euro is now at $1.12 US (11/25/2021) — which means that Italy and France have a low-cost average of $9.50 (rounded) and these services do not include the “cost recovery charge” and other made-up fees that are part of the America’s pricing.

§ 100 Gig services aren’t even offered in the US, regularly.

The price per gig is $.09 cents vs $14.00 a gig per month.

And we’ve already examined this issue, not just for 100 Gig offerings but for “unlimited” plans overseas where the term has not been co-opted to mean a price cap.

When other countries are charging under $10 bucks for 100 Gigs of wireless service — and Spectrum (which is reselling Verizon’s inflated service) can charge $14 for 1 Gig…

Overcharging: There is, of course a range, but let’s call it $30-$75 a month, $360-$900 per phone, a year, per household.

Is it ‘just and reasonable’ to call this difference between the price of wireless offered by the overwhelming majority of different wireless carriers in different countries, gross overcharging that needs immediate investigation — You bet.

Overcharging of the Triple Play and Wired Broadband in America vs the EU.

On the price of the cable triple play — i.e., high speed broadband, cable TV and voice calling, America’s average was over $217.00 a month in 2019 according to Consumer Reports, after the promotional pricing has disappeared. At the same time, the previous report by the EU found that the average price of the same US service would only be $25-$47 dollars, on average.

This chart is taken from the latest European Union Commission report, published in 2021 and for this work, we have maintained a speed range of 30Mbps-100Mbps for downloads. Slower speed services should cost less.

Converting all of these pricing examples to dollars, one is struck by the massive range between the US and the EU prices for the stand alone broadband, and the double and triple play.

NOTE: The EU’s reports have had a serious flaw — as shown by the red “X”s — The EU did not add the added made up fees or the removal of the promotional savings in their calculations of the US prices. This is mainly because almost all other countries have restricted made up additions to the price a customer must pay.

The Overcharging?

How is it possible for the US to have prices that are 227%-294% higher than overseas, which has a range of $83-$105 dollars extra a month? Using the Consumer Reports total, this can be $174-$197 dollars A MONTH above the prices in Europe or other overseas countries.

How can America’s prices for the triple play be 10 times more when comparing Consumer Reports’ 2019 findings to the data from other countries?

The column on the right approximates annual excess charges — from $1,000-$2,400 dollars annual difference from the prices overseas for the triple play depending on which set of the numbers are examined; i.e., the lowest cost or the costs as compared to the Consumer Reports’ findings.

Let’s Talk about Overcharging and Keeping the Poor, Poor — and America Underserved.

There is a national disgrace here. We’re being gouged and instead of halting the billions in overcharging — annually, many of the well intentioned Digital Divide crowd want to give the same companies more money.

To summarize and average:

The triple play is being overcharged about $150 a month after the made-up fees and promotions are adjusted. — That’s $1,800.00 a year.

And when other countries are charging under $10 bucks for 100 GIGS of wireless service — and Spectrum (which is reselling Verizon’s inflated service) can charge $14 for 1 Gig…

We estimate that wireless overcharging has a range of $30-$75 a month, $360-$900 a year per phone, per household.

Instead of insisting on giving discounts off of AT&T et al.’s retail rates, which will only help those who are ‘below the poverty level’ — if the services were priced at ‘fair and reasonable’ rates, those who struggle to pay their bills would have more access to connectivity services.

Bottomline:

§ No more excuses: Follow the Money and fix this mess without government subsidies.

§ Investigate How America’s Communications Companies are Holding the United States Hostage.

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New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 38 years, and I have been playing the piano for 63 years.

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bruce kushnick

bruce kushnick

New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 38 years, and I have been playing the piano for 63 years.

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