Linked by Thom Holwerda on Tue 26th Aug 2014 09:47 UTC
Internet & Networking

If your monthly cellphone bill seems high, that may be because American cellphone service is among the most costly in the world. A comparison of two similar plans, one in the United States and one in Britain, reveals a marked difference.

Both plans include a new iPhone 5S with 16 gigabytes of memory. Both require a two-year commitment and allow unlimited voice minutes and unlimited texting. The plan offered by the British provider, Three UK, offers unlimited data and requires no upfront payment. With Britain's 20 percent tax included, the plan costs 41 pounds a month, or $67.97 at current exchange rates.

The plan provided by the American carrier, Verizon Wireless, has an upfront cost of $99.99 and then $90 a month, not including taxes. Spreading the upfront cost over 24 months and adding 17 percent tax - typical for the United States - comes to $109.47 a month. But while the British plan includes unlimited data, the American plan does not. It includes two gigabytes a month, with an additional gigabyte free during an introductory period.

This should not surprise anyone. Companies like Comcast, AT&T, Verizon, et al., are state-owned monopolies in all but name. They are not state-owned, but the way the US government - both local and federal - protects them essentially makes them the equivalent of being state-owned. They have no competition, and they know it. There is no incentive for them to lower prices, improve service, or expand coverage to less important areas.

Meanwhile, here in The Netherlands (I can't speak for other countries), our government mandated that the owners of the physical cables provide access to other players, ensuring competition across the board, which has benefited all of us. Don't quote me on this, but I'm pretty sure something like 95%-99% of Dutch households can get broadband internet via several different media and through several different ISPs. All because our government was smart enough to realise that it would take government intervention to ensure competition.

Of course, it's unfair to compare one of the smallest and most densely populated western countries to the United States, which is crazy large and has large stretches of impoverished areas that probably do not have access to the financial means to create a proper network infrastructure. Still, the US is supposed to be the richest country on earth, and if it really wanted to, it could definitely provide good broadband access to every American citizen at low prices.

It's just that the monopoly companies don't want to.

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Comment by frood
by frood on Tue 26th Aug 2014 09:50 UTC
frood
Member since:
2005-07-06

I don't know about now but certainly a few years ago Three were known to be rubbish. The coverage was very poor so to compensate they offered amazing deals.

Reply Score: 2

RE: Comment by frood
by Sparrowhawk on Tue 26th Aug 2014 11:12 UTC in reply to "Comment by frood"
Sparrowhawk Member since:
2005-07-11

I'm on Three UK (switched from O2 about 6 months ago). So far I've had no coverage issues (except at my parent's cottage on the Dorset coast where no network is able to reach! The rest of Dorset I passed through was fine)

I work in Bath and we just got 4G there a few weeks ago.

I pay £12.90/month and I get unlimited data, 500 texts and 200 mins (I think - I never reach my limits anyway)

As far as I can tell so far, the network coverage is pretty good (been to London, Dorset, the Midlands and Wales in the last six months).

I've also been to France and Greece. When in France, you get to use your allowance as though you were in the UK, so no data roaming bills ;) No such luck in Greece as yet though.

Recent report on UK mobile providers:
http://www.bbc.co.uk/news/technology-28837671
Three comes a close second to EE.

I know what you mean though - my sister used to be on Three a few years back and won't go back due to the poor coverage at the time.

Reply Score: 5

RE[2]: Comment by frood
by shotsman on Tue 26th Aug 2014 13:55 UTC in reply to "RE: Comment by frood"
shotsman Member since:
2005-07-22

You also get roaming in the USA out of your plan with (well with my $16/month) Three as well.
Then there is tethering as well. no charge.
I didn't get charged in the US for using Safari on my Mac via the iPhone personal hotspot.

As for coverage with 3, there are still some silly black spots but I get 4G, again at no charge.

The USA is in the stone age in this area as far as I'm concerned. Charges for this, charges for that ...
Don't forget the USA has the NSA listening to all your calls. I'm sutptised that carriers have not added a charge for that to your bill.

Reply Score: 4

RE[3]: Comment by frood
by glarepate on Tue 26th Aug 2014 14:11 UTC in reply to "RE[2]: Comment by frood"
glarepate Member since:
2006-01-04

The NSA pays the carriers for listening in so that charge is covered by tax money rather than charging cell phone users directly.

Reply Score: 3

RE[3]: Comment by frood
by dhickman on Tue 26th Aug 2014 14:13 UTC in reply to "RE[2]: Comment by frood"
dhickman Member since:
2009-04-12

We do have to pay for surveillance. It is officially under the CALEA fees.

Reply Score: 3

RE[3]: Comment by frood
by krreagan on Tue 26th Aug 2014 17:27 UTC in reply to "RE[2]: Comment by frood"
krreagan Member since:
2008-04-08

Just because you are not in the USA doesn't mean the NSA isn't listening in on your calls too!

Reply Score: 4

RE: Comment by frood
by NuxRo on Tue 26th Aug 2014 12:04 UTC in reply to "Comment by frood"
NuxRo Member since:
2010-09-25

They still have poor coverage in some places, even in London (Hampstead Heath for one). Disappointing.

Reply Score: 2

RE[2]: Comment by frood
by Sparrowhawk on Tue 26th Aug 2014 13:43 UTC in reply to "RE: Comment by frood"
Sparrowhawk Member since:
2005-07-11

That's annoying. Aren't there some phone towers in immediate line of sight on Muswell Hill though? Or am imagining that? It's been quite some time since I was up there. And they could of course be other networks' kit.

I have family in Chalk Farm and love the heath (especially just north of Gospel Oak, where I myself used to live - happy memories)

Anyway, around Chalk Farm the signal seems ok. Unless I'm imagining things. Which is always possible!

Reply Score: 3

RE: Comment by frood
by stestagg on Tue 26th Aug 2014 12:51 UTC in reply to "Comment by frood"
stestagg Member since:
2006-06-03

I'm on 3, my girlfriend is on O2.

It seems like we have about equal coverage, but in different areas, quite often if one of us has no reception, the other one will.

The advantage that I have, is I get unlimited 4g for free, while my girlfriend had to sweet-talk the sales assistant to get reduced-price 2GB of 4g a month

Reply Score: 4

RE[2]: Comment by frood
by charlieg on Tue 26th Aug 2014 13:43 UTC in reply to "RE: Comment by frood"
charlieg Member since:
2005-07-25

> I get unlimited 4g for free

No, no you don't. You are paying for your access. Unlimited 4G is just part of the package, but there is nothing FREE about it.

Reply Score: 2

RE[3]: Comment by frood
by stestagg on Tue 26th Aug 2014 13:50 UTC in reply to "RE[2]: Comment by frood"
stestagg Member since:
2006-06-03

You're technically right, but this is a bit pedantic really.

what I meant was (I didn't think I needed to go into all the details):

I signed my contract before 4g was available on the 3 network. When 4g was rolled out to london early this year, 3 allowed me to use the 4g connections for no extra charge (over what I was already paying).

This is different to other networks, include O2, where a 4g connection incurred a sur-charge.

Reply Score: 4

RE[3]: Comment by frood
by shotsman on Tue 26th Aug 2014 13:57 UTC in reply to "RE[2]: Comment by frood"
shotsman Member since:
2005-07-22

By FREE, I mean that we get 4G at no extra charge from the price we were paying before. This is unlike many plans on other networks. In that sense, it is free {of additional charges}

Reply Score: 3

50 million people on a tiny island
by joshv on Tue 26th Aug 2014 09:57 UTC
joshv
Member since:
2006-03-18

Don't you imagine that covering a densely populated area might be a bit cheaper than having to string thousands of miles of towers out into the middle of nowhere? Verizon is who you get if you want rock solid coverage in the US - nobody else even comes close. That costs money - and people value it, so they pay the high rates.

If your local coverage on Sprint or T-Mobile is good and you don't travel much, then you can probably save a lot of money - just don't be surprised if your phone is half useless on the road or on vacation.

Reply Score: 0

christian Member since:
2005-07-06

50 million people? Scotland is still in the union (at the moment), you know, so we're actually about 68 million.

But the original point still stands. Most people in the US are in densely populated areas, so I dare say US customers are being ripped off, and I wouldn't be surprised if it's not mostly on the handset costs side.

Reply Score: 3

joshv Member since:
2006-03-18

Am I being ripped off when I travel away from Chicago (which is densely populated) and find that my phone gets absolutely stellar 4G coverage along every highway I travel, no matter how remote? Am I getting ripped off when I am on vacation in the middle of nowhere, with no WiFi, and find Verizon has a solid 3G signal I can tether to my laptop?

As I said, if all you are interested in is densely populated areas, you can get much cheaper plans. If you want your phone to work well everywhere, you go with Verizon. It's not as if Verizon doesn't have competition. They charge those rates because the market will pay them.

Reply Score: 0

charlieg Member since:
2005-07-25

> They charge those rates because the market will pay them.

Thom's point (and I would struggle to disagree with him on this) is that the market is captive because lobbying and various other political corporate influences mean that companies like Verizon don't have true competition so don't have to lower prices to retain customers.

Market economics only applies in a free market. When the market is not free, i.e. when there is a monopolgy, then the incentives amongst the providers (for corporate providers) becomes one of raising cost to the point at which the market will bear it.

Reply Score: 4

joshv Member since:
2006-03-18

> They charge those rates because the market will pay them.

Thom's point (and I would struggle to disagree with him on this) is that the market is captive because lobbying and various other political corporate influences mean that companies like Verizon don't have true competition so don't have to lower prices to retain customers.

Market economics only applies in a free market. When the market is not free, i.e. when there is a monopolgy, then the incentives amongst the providers (for corporate providers) becomes one of raising cost to the point at which the market will bear it.


Yes, I am aware of the point Thom is making and he's wrong, there's plenty of competition in the US wireless market. All of the competitors are cheaper than Verizon, and all of them provide inferior service compared to Verizon. Thus Verizon commands a premium - pure market economics.

Reply Score: 1

Drumhellar Member since:
2005-07-12

The comparison against Verizon is somewhat unfair, though. Verizon has coverage for damn near everywhere in the US - including remote mountain canyons accessible only by off-road vehicle (Or snowmobile during the winter). I know this from experience.

I pay about $62/month for T-Mobile for mostly the same service as the British plan mentioned. My coverage in remote/rural areas isn't nearly as good as Verizon, but that's okay. I'm rarely in those areas, and when I am, not having coverage is usually a feature.

Reply Score: 3

unclefester Member since:
2007-01-13

Don't you imagine that covering a densely populated area might be a bit cheaper than having to string thousands of miles of towers out into the middle of nowhere? Verizon is who you get if you want rock solid coverage in the US - nobody else even comes close. That costs money - and people value it, so they pay the high rates.


Australia is the roughly same size as the continental US. The population is only 24 million. An iPhone 5s with unlimited calls and 2GB of data costs as little as AUD60/(USD56) month on a 24 month contract (Vodafone). Even Telstra, the most expensive carrier, only charges half as much as Verizon. There is no upfront handset fee.

Reply Score: 8

joshv Member since:
2006-03-18

Yeah, so sparsely populated that much of it is uncovered. Verizon actually covers a significant fraction of the land area of the US with good coverage, even 4G.

Reply Score: 2

The1stImmortal Member since:
2005-10-20

Yeah, so sparsely populated that much of it is uncovered. Verizon actually covers a significant fraction of the land area of the US with good coverage, even 4G.

For the population density, Australia doesn't do too badly - Telstra is forced by law to provide a certain level of access anywhere in the country (it's a bit more complicated than that actually but long story) - it's pretty close to pulling that off too.

Remember that there are areas of Australia the size of (the larger) US states which are things like military testing grounds and national parks, not to mention essentially uninhabited regions (cattle don't count) - they don't really need coverage.

And Telstra is forced to provide access to other carriers too. It seems it tries desperately to wriggle out of that but there is a complex legal framework around third party access to Telstra copper.

Reply Score: 3

bosco_bearbank Member since:
2005-10-12

Currently with Sprint; formerly with T-Mobile. Half useless, in my experience is definitely an exaggeration. YMMV. I'd say neither is more than one-fifth useless when on the road. I've also been places where T-Mobile worked but Verizon didn't.

Reply Score: 4

01Michael10 Member since:
2013-05-07

...just don't be surprised if your phone is half useless on the road or on vacation.


I guess if one only goes on vacation in the US. Outside of the US you will have better luck with phones from AT&T and T-Mobile as they are GSM while most Verizon phones are CDMA only which no one else uses.

Reply Score: 3

TemporalBeing Member since:
2007-08-22

"...just don't be surprised if your phone is half useless on the road or on vacation.


I guess if one only goes on vacation in the US. Outside of the US you will have better luck with phones from AT&T and T-Mobile as they are GSM while most Verizon phones are CDMA only which no one else uses.
"

Verizon,et al will give you an "international" phone that has the ability to use a SIM card solely for international travel; and otherwise uses CDMA with the build-in identifiers. You can get it if you (i) pay more and (ii) request an "international" phone.

Most Verizon customers know nothing of this, so it's not a standard thing for them. I only know of it because a former employer used Verizon even though we had to travel around the world. (I think we was because the accountant liked Verizon or something; nothing else made sense as to why they used Verizon and she did that with many of the vendors, favoring her favorites and friends.)

Reply Score: 2

zima Member since:
2005-07-06

Wouldn't it be cheaper/simpler to just get a basic unlocked GSM phone for travels and local SIMs?

Reply Score: 3

TemporalBeing Member since:
2007-08-22

Wouldn't it be cheaper/simpler to just get a basic unlocked GSM phone for travels and local SIMs?


Most in the US don't know a thing about the difference between GSM and CDMA cells. They just know their phone works on their carrier and as long as that remains true could care less.

The sad fact is that the CDMA, non-SIM card phones that are in use by most carriers in the US only propagates the issue that the carriers are in charge and control the phones, leaving people to think they have to replace the phones when switching, etc; not realizing the rest of the world doesn't put up with that crap.

Most also don't travel abroad.

Now as to my former employer, well it probably would have been cheaper for the company to have GSM based phones instead of CDMA+GSM Verizon phones but as I said - the person in charge of accounting really liked Verizon and wouldn't allow anything else, despite Verizon not being very good internationally.

Reply Score: 2

zima Member since:
2005-07-06

Finland, Norway, Sweden, have around half the population density of the US, and still better service & prices.

Reply Score: 2

Poor choice of words
by wocowboy on Tue 26th Aug 2014 10:15 UTC
wocowboy
Member since:
2006-06-01

Thom's wording of "large stretches of impoverished areas that probably do not have access to the financial means to create a proper network infrastructure" would be better phrased as "large stretches of less densely populated land and small cities and towns where it costs much more per potential customer to build a proper network infrastructure". Just because a particular area has smaller cities, towns, and villages does not mean that there is great poverty, or even poverty at all, it just means that area is not densely populated and there aren't as many potential customers there, and therefore it's not financially feasible for 5 or 6 carriers to all build infrastructure, hence the large gaps in some carrier's coverage. That's where the requirement to share infrastructure would be a good thing, and I do support that. The people living in those "middle of nowhere" areas have just as much right, demand, and need for cellphone service as those that are piled on top of one another in the big cities.

Edited 2014-08-26 10:17 UTC

Reply Score: 2

RE: Poor choice of words
by unclefester on Tue 26th Aug 2014 10:49 UTC in reply to "Poor choice of words"
unclefester Member since:
2007-01-13

Americans are just being ripped off. In Australia we have three carriers serving every town over 1000 people. Telstra provides mobile services to hamlets with a dozen people 1000Km from the nearest big city. We still pay less than the Verizon prices.

Edited 2014-08-26 10:57 UTC

Reply Score: 5

RE: Poor choice of words
by sirhalos on Tue 26th Aug 2014 11:25 UTC in reply to "Poor choice of words"
sirhalos Member since:
2007-04-04

I completely agree. This is something that is very difficult to someone that does not live in the US. Besides the few very big cities where it is just too difficult to drive (New York City for example) people tend to move away from the city and the rich tend to move even further. The city is not really a place you want to be or live close to. It is for business and that is about it. Cincinnati, Columbus, Dayton, Cleveland, Detroit, Pittsburgh... and that is just a small section of the US and no, just no one wants to live there in the city. The richest areas in the Ohio are 30 ~ 40 minutes outside the major cities and no those people aren't farmers.

Reply Score: 1

worse...
by hobgoblin on Tue 26th Aug 2014 10:47 UTC
hobgoblin
Member since:
2005-07-06

They are private companies protected by cronyism, if not downright corruption.

Had they been state owned they would have been forced to provide a service for everyone, not just those with the most money.

Reply Score: 5

RE: worse...
by unclefester on Tue 26th Aug 2014 10:55 UTC in reply to "worse..."
unclefester Member since:
2007-01-13

Telstra Australia's largest telco (formerly government owned) has a Universal Service Obligation. It must provide (subsidised) basic services without discrimination to all customers. That means that any two dog town in central Australia has mobile and basic internet access at the same price as its' customers in the major cities.

Reply Score: 4

No competition?
by joshv on Tue 26th Aug 2014 10:55 UTC
joshv
Member since:
2006-03-18

"This should not surprise anyone. Companies like Comcast, AT&T, Verizon, et al., are state-owned monopolies in all but name. They are not state-owned, but the way the US government - both local and federal - protects them essentially makes them the equivalent of being state-owned. They have no competition, and they know it. There is no incentive for them to lower prices, improve service, or expand coverage to less important areas."

I thought you were talking about Wireless providers - there is massive competition. Where I live there is Sprint, Verizon, AT&T, and T-Mobile, and perhaps some smaller more local players/resellers. I pay for Verizon because its coverage is worth it.

Reply Score: 1

RE: No competition?
by kwan_e on Tue 26th Aug 2014 11:04 UTC in reply to "No competition?"
kwan_e Member since:
2007-02-18

Where I live


Therefore, everywhere is like this.

QED.

Reply Score: 6

RE[2]: No competition?
by tidux on Tue 26th Aug 2014 13:49 UTC in reply to "RE: No competition?"
tidux Member since:
2011-08-13

Everywhere IS like that in the US, except for the really sparsely populated rural areas where Verizon is the only game in town, and a few areas at the margin where it's Verizon and AT&T. For 90% of the population, all four carriers work just fine.

Reply Score: 0

RE[3]: No competition?
by TemporalBeing on Tue 26th Aug 2014 16:40 UTC in reply to "RE[2]: No competition?"
TemporalBeing Member since:
2007-08-22

Everywhere IS like that in the US, except for the really sparsely populated rural areas where Verizon is the only game in town, and a few areas at the margin where it's Verizon and AT&T. For 90% of the population, all four carriers work just fine.


In the sparse areas it flips back and forth between only Verizon and only AT&T.

But yes, agreed for 90+% of the population you have quite a few choices. That said, only one of them (T-Mobile) seems to be doing much with respect to being customer friendly in prices, etc.

Reply Score: 2

RE[3]: No competition?
by kwan_e on Tue 26th Aug 2014 16:43 UTC in reply to "RE[2]: No competition?"
kwan_e Member since:
2007-02-18

For 90% of the population


That's 32 million people missing out. One and a half times the population of Australia is missing out. That's roughly how many people died from the Great Leap Forward, which horrifies people.

Sometimes percentages hide the sheer numbers. 30+ million of anything is huge, regardless of percentage.

Reply Score: 5

v RE[4]: No competition?
by tidux on Tue 26th Aug 2014 17:27 UTC in reply to "RE[3]: No competition?"
RE[5]: No competition?
by The1stImmortal on Tue 26th Aug 2014 22:11 UTC in reply to "RE[4]: No competition?"
The1stImmortal Member since:
2005-10-20

Do you have *any* idea what an enormous pain in the ass it would be to fully blanket the US in cell coverage? Short of a new law standardizing on a single protocol stack (GSM-based) and frequency set, banning roaming fees, and subsidizing tower construction, it's not going to happen.

I can't see why standardizing protocol stacks and frequencies is an issue - other industries have had that happen without issue... Even telcos have had that happen with fixed line trunking protocols...

Heck - that's what the FCC is actually for isn't it?

Reply Score: 4

RE[5]: No competition?
by kwan_e on Tue 26th Aug 2014 23:13 UTC in reply to "RE[4]: No competition?"
kwan_e Member since:
2007-02-18

Do you have *any* idea what an enormous pain in the ass it would be to fully blanket the US in cell coverage?


So? That doesn't negate the facts. 30+ million is a huge number. And they keep telling us these problems can only be solved by private enterprise, and we all know it's not going to happen because it is a pain in the arse.

Reply Score: 4

RE[5]: No competition?
by zima on Mon 1st Sep 2014 23:26 UTC in reply to "RE[4]: No competition?"
zima Member since:
2005-07-06

Do you have *any* idea what an enormous pain in the ass it would be to fully blanket the US in cell coverage?

Somehow the Nordic countries (the "big three" (Norway, Sweden, Finland) have population densities around half that of the US) are doing fine...

Reply Score: 2

RE[4]: No competition?
by joshv on Wed 27th Aug 2014 21:26 UTC in reply to "RE[3]: No competition?"
joshv Member since:
2006-03-18

Those 30 million people are not driving Verizon's high rates - unless you are saying that a monopoly over 10% of the population somehow allows them to apply monopoly pricing to the other 90%?

Reply Score: 1

RE[5]: No competition?
by kwan_e on Thu 28th Aug 2014 07:19 UTC in reply to "RE[4]: No competition?"
kwan_e Member since:
2007-02-18

Let me give people here a vocabulary lesson: http://en.wikipedia.org/wiki/Oligopoly

"Monopoly" seems to be the go-to word, but it is not just monopolies that are detrimental.

Reply Score: 3

RE[6]: No competition?
by joshv on Thu 28th Aug 2014 11:47 UTC in reply to "RE[5]: No competition?"
joshv Member since:
2006-03-18

Let me give people here a vocabulary lesson: http://en.wikipedia.org/wiki/Oligopoly

"Monopoly" seems to be the go-to word, but it is not just monopolies that are detrimental.


Ok, replace monopoly with oligopoly in my comment - point still stands. There is an Oligopoly only in a small portion of the market - this fraction cannot possibly be driving prices in the competitive portions of the market.

Reply Score: 1

RE[7]: No competition?
by kwan_e on Thu 28th Aug 2014 12:16 UTC in reply to "RE[6]: No competition?"
kwan_e Member since:
2007-02-18

"Let me give people here a vocabulary lesson: http://en.wikipedia.org/wiki/Oligopoly

"Monopoly" seems to be the go-to word, but it is not just monopolies that are detrimental.


Ok, replace monopoly with oligopoly in my comment - point still stands. There is an Oligopoly only in a small portion of the market - this fraction cannot possibly be driving prices in the competitive portions of the market.
"

Are you sure you understand what an oligopoly is? The oligopoly covers a greater percentage of the market than an oligopoly. So it's not a "small portion".

You basically have 4 really large companies that supply for most of the market. That is an oligopoly. That is not a small portion.

Reply Score: 3

RE[2]: No competition?
by joshv on Wed 27th Aug 2014 02:55 UTC in reply to "RE: No competition?"
joshv Member since:
2006-03-18

Yes, most places in the US are like this - with the exception of sparsely populated areas where you will find Verizon, and perhaps one of the others.

Reply Score: 1

In France
by ToxN on Tue 26th Aug 2014 12:03 UTC
ToxN
Member since:
2008-07-16

Same offer here in France can be found at around 50$ per month.

Reply Score: 4

17% tax??
by Morgan on Tue 26th Aug 2014 13:24 UTC
Morgan
Member since:
2005-06-29

adding 17 percent tax — typical for the United States —


I'm not defending Verizon nor typical US cellular prices, but on what alternate Earth is 17% a typical sales tax for any US state? Most combined state and local taxes on consumer goods and services averages around 7%, with some states as high as 12% and some as low as 4.5%[1]. But claiming 17% is "typical" (i.e. "average") for the US is simply not true.

This makes me question the validity of the rest of the article, if something like sales tax is so exaggerated. And it's worth noting the exaggeration wasn't even necessary; even inserting actual sales tax figures, the US is still significantly more expensive on average than most other countries. But when the article combines a bill from the most expensive US carrier and a completely made-up tax rate, it certainly paints an even darker picture. I expect better, more accurate reporting out of a major publication like the NYT.


[1] http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#By_ju...

Reply Score: 2

RE: 17% tax??
by rft183 on Tue 26th Aug 2014 14:44 UTC in reply to "17% tax??"
rft183 Member since:
2005-08-11

Sales tax isn't the only tax that is included on cell phone bills. There are many taxes and fees that are included that raise the extra cost to a much higher percentage than simple sales tax. Here is an article about it: http://money.cnn.com/2013/07/10/technology/mobile/wireless-taxes/

Reply Score: 4

RE[2]: 17% tax??
by Morgan on Tue 26th Aug 2014 15:17 UTC in reply to "RE: 17% tax??"
Morgan Member since:
2005-06-29

Most of those are "surcharges" and "regulatory fees", not actual taxes, and a lot of those fees are nothing but pure profit for the carriers, hidden under names like "regulatory cost recovery fee". Taxes are required to be paid by law, are used for the benefit of citizens, and are generally restricted to sales and use tax. I could see the 911 (emergency number) fee being considered a tax, but most of the rest is not a true tax.

I remember reading a while back of a customer actually calling their carrier (wired/internet or wireless I don't recall) and demanding they remove any vague fee or surcharge that is not legally required, and the rep admitted that they are nickel-and-diming the customer for profit using those vague fee names.

Reply Score: 4

RE[3]: 17% tax??
by rft183 on Tue 26th Aug 2014 16:32 UTC in reply to "RE[2]: 17% tax??"
rft183 Member since:
2005-08-11

I agree that much of the fees are going to the carrier and therefore are not a true tax. However those fees must be included in the price in order to make an accurate comparison, and so I think the article was justified to include them. I suppose in the interest of accuracy, the article should have worded it as "taxes and fees," but I don't think the omission of the word "fees" invalidates the entire article.

Reply Score: 2

RE[4]: 17% tax??
by Morgan on Tue 26th Aug 2014 16:44 UTC in reply to "RE[3]: 17% tax??"
Morgan Member since:
2005-06-29

You're right, probably an overreaction on my part. Still, like I said before they are using the most expensive US carrier instead of an average between the big four. They should also have used an average of the British carriers as well, and explained (like you said) that it's a combination of taxes and fees instead of just calling it taxes.

Or maybe I'm just being extra picky and pedantic today.

Reply Score: 3

RE[5]: 17% tax??
by rft183 on Tue 26th Aug 2014 16:55 UTC in reply to "RE[4]: 17% tax??"
rft183 Member since:
2005-08-11

Well, maybe a little picky... ;) I found it odd that they used the most expensive carrier in the country as well. I probably would have used AT&T, since it has pretty good coverage and is cheaper than Verizon. I know Sprint and T-Mobile are cheaper, but their coverage is terrible most places I have lived (smaller towns and cities).

Reply Score: 2

RE: 17% tax??
by Lorin on Wed 27th Aug 2014 04:29 UTC in reply to "17% tax??"
Lorin Member since:
2010-04-06

Take your contract price per month and look at what you are charged in reality, between actual taxes and other misc. fees 17% or more is about right

Reply Score: 5

North of the border
by jessesmith on Tue 26th Aug 2014 13:26 UTC
jessesmith
Member since:
2010-03-11

I live in Canada which is even less densely populated than the USA. We have less money, more open spaces and a very small population. We only have three or four cell phone companies across the entire nation. My cell phone plan does not require any contract, has unlimited texting, hundreds of minutes (I've never burned through them all) and my bill comes to around $40/month after tax. That's probably about 25-30 Euros per month. Data is charged on an "as needed" basis, but I've never gone over $10/month.

Thought I'd share this as I want to point out American bills are not higher because of low population density or large areas of land to cover. Canada is larger and has a smaller population and our phone bills are around half that of our American neighbours.

Reply Score: 6

RE: North of the border
by WereCatf on Tue 26th Aug 2014 14:02 UTC in reply to "North of the border"
WereCatf Member since:
2006-02-15

I live in Canada which is even less densely populated than the USA. We have less money, more open spaces and a very small population.


Finland is, I would assume, similar to Canada in great many things; we only have like 7 million people in the whole country, it's an uneven country littered with lots of swampy areas and lakes, the populace is spread around the country and we still manage to have near 100% cell-phone coverage in the whole country and bills nowhere near what they charge in the U.S. Most phones are not even SIM-locked even if you buy them on a contract.

All the lakes and swamp areas and the likes make it difficult to build a good network, but there's also the fact that towards Lapland Finland gets quite mountainous, too. Not to mention things like having to build everything so that they can withstand extreme temperature-swings, what with winters going as low as -35C to +35C in summers and stuff like that.

Reply Score: 5

RE[2]: North of the border
by zima on Fri 29th Aug 2014 14:47 UTC in reply to "RE: North of the border"
zima Member since:
2005-07-06

And all "big 3" Nordic countries have population densities around half that of the US (you should know that when you live in one of them! ;P ) - US has 32 people/km², Finland has 18
( http://en.wikipedia.org/wiki/List_of_sovereign_states_and_dependent... )

Reply Score: 3

RE: North of the border
by duraaraa on Tue 26th Aug 2014 22:23 UTC in reply to "North of the border"
duraaraa Member since:
2012-03-31

I can say that in Mongolia, the least densely populated country on earth (even more so than Canada), phone bills are less than half of what Verizon charges, with unlimited data, in-network calling, and texts... and most people, even in the countryside (really, everywhere except Ulaanbaatar, Darhan, and Erdenet is basically countryside), are covered, depending on the network you choose.

Reply Score: 3

cable
by gfx1 on Tue 26th Aug 2014 14:50 UTC
gfx1
Member since:
2006-01-20

There may be several companies there isn't much in the way of competition in the Netherlands. They all talk to each other about ways to get more money from the customer.
If one increases the price the rest follows.
You could have one GB of data for 10 euro's a month that sort of deal is impossible to get nowadays.
But for mobile it is possible to get a cheap prepaid deal if you don't call that much and use wifi for data.
For television prices are ever increasing. They crippled analog TV they cripple digital SD TV so that you're almost forced to get HD for an additional cost per month.

Reply Score: 3

I think you have it backwards
by balaknair on Tue 26th Aug 2014 14:53 UTC
balaknair
Member since:
2013-11-02

Rather than Verizon, Comcast, ATT etc being state-owned, they own the government.
The government agencies charged with regulating them are staffed by their former employees, who will return to work for them once their stint in government is over. Congress and Senate members shill for them while in office in exchange for campaign contributions, their staffers join the lobbying firms for these companies- jobs promised to them even while they still work for the government. Call it the revolving door, regulatory capture or anything else. It's an industry-owned government, not government-owned industry.

Reply Score: 5

RE: I think you have it backwards
by ilovebeer on Tue 26th Aug 2014 15:33 UTC in reply to "I think you have it backwards"
ilovebeer Member since:
2011-08-08

That's exactly right and it's one of the largest problems we have, if not the largest. The system here is rigged and sadly it seems a lot of people don't understand that rotating elected officials in & out changes absolutely nothing.

This country is about abusive capitalism. What's good for the balance sheet & bank account is simply more important than what's good for the people. If the lower 99% have to be stepped on so the upper 1% can profit or benefit, so be it, no problem. Competitive markets and fair pricing for consumers? Who gives a sh*t about that?

I'll stop myself from going on an endless rant about all the backwards & shameful things that go on here in business and government. I'm sure this post is enough to get me on some bullshit watchlist.

Reply Score: 5

Just switched...
by TemporalBeing on Tue 26th Aug 2014 16:56 UTC
TemporalBeing
Member since:
2007-08-22

So I got my cell phones in 2004 under Cingular due to the Rollover minutes, and kept the same basic plan since. After they bought and became AT&T Wireless, friends started texting me and I didn't like the cost structure so I disabled texting. Never enabled data either, despite having my NexusOne. When they tried to add data plans at (IMHO) unreasonable rates, I complained and got them to take it off. With the rollover we essentially had unlimited calling on the phones on the plan (4 for $70 + $10/extra phone or $15/extra phone all depended upon last change as to whether it was $10 or $15).

Now, I have kids and various people that watch them want (expect) everyone to have texting. So we switched to T-Mobile and for the same price ($50 base + $30/extra phone; we also dropped to two phones) we now have unlimited talk, text, and data - 1GB 4G data, and unlimited 2G data. For our usage right now, that 1GB is probably more than enough.

And my AT&T network-configured NexusOne is doing just fine for the most part. (I'm trying to hold out for the new Nexus in November.)

[EDIT] So yes, T-Mobile is certainly making the US market a better place; even forcing Sprint, Verizon, and AT&T to change their plans some. It's certainly the reason we switched.

Edited 2014-08-26 16:58 UTC

Reply Score: 2

Sprint Sucks but....
by krreagan on Tue 26th Aug 2014 17:46 UTC
krreagan
Member since:
2008-04-08

I have Sprint and 5 iPhone 5s' and pay ~$210 per month. taxes included, unlimited text, unlimited data and 1600 shared minutes (never gone over 1000min), unlimited domestic roaming.
For what I need... city, mountains to the ski areas and town-town chasing soccer tournaments it works just fine. My daughter chews up 10000+ text messages per month.

Verison is by far the most expensive carrier in the states. When I was shopping around for what I got from Sprint, Verison was ~$300+ and AT&T was ~$240. All have since come out with updated plans since I was shopping so they may have better plans now, or not.

Reply Score: 2

Comment by Drumhellar
by Drumhellar on Tue 26th Aug 2014 19:10 UTC
Drumhellar
Member since:
2005-07-12

This comparison is seriously, seriously flawed.

Seriously.

Look at Three UK's coverage map:
http://www.three.co.uk/Support/Coverage

Make sure to click to show 4G coverage.

Now, look at Verizon's 4G coverage map:
http://www.verizonwireless.com/wcms/consumer/4g-lte.html
(Click the detailed map for your area button for coverage in other bands)

There simply is no comparison between the two networks.

Reply Score: 0

RE: Comment by Drumhellar
by henderson101 on Wed 27th Aug 2014 12:13 UTC in reply to "Comment by Drumhellar"
henderson101 Member since:
2006-05-30

Then look at when 4G was rolled out in the UK....

Reply Score: 3

Comment by Flatland_Spider
by Flatland_Spider on Tue 26th Aug 2014 19:58 UTC
Flatland_Spider
Member since:
2006-09-01

state-owned monopolies in all but name


They are government sanctioned and enforced monopolies.

There is quite a bit of difference between the two. A state-owned monopoly implies the government holds some sort of influence over the companies. With a government sanctioned monopoly, the government works for the company by limiting competition.

The US is a corporatist state not a facist or socialist state. The companies own the government.

Reply Score: 2

Usual Internet Nonsense
by bgrimsle on Tue 26th Aug 2014 20:01 UTC
bgrimsle
Member since:
2013-11-07

"If your monthly cellphone bill seems high"... it may be because you've done zero shopping around. Verizon is the high-service, high-priced carrier.

People love to cherry-pick stats that fit their pre-conceived notions. There aren't 4 providers in the US, there are many more. The smaller ones buy wholesale from the bigger ones, and often have very competitive pricing.

From a very quick search: "The number of real wireless carriers in the United States may be limited, but your options for cheap mobile phone plans are growing. A bunch of little virtual carriers, known as MVNOs, have come out of the woodwork offering everything from pure prepaid data to unlimited international calling."

Here are some rates:

Lycamobile:
$23: Unlimited talk (USA) / text/ 100MB data, 4G LTE
$29: Unlimited talk (USA and some international) / text/ 500MB data, 4G LTE
$39: Unlimited talk (USA) / text/ 750MB data, 4G LTE

T-Mobile GoSmart Mobile:
$25: Unlimited voice and texting
$35: Unlimited voice, texting and up to 500 MB at 3G speeds before throttling down to 2G speeds.
$40: Unlimited voice, texting and up to 3 GB at 3G speeds before throttling.

Target's Brightspot:
$30: unlimited voice and messaging
$35: 300 voice minutes, unlimited messaging and 3 GB of data at HSPA+ or LTE speeds before throttling.
$45: unlimited voice, messaging and 1 GB at HSPA+ or LTE speeds before throttling.
$55: unlimited voice, messaging and 3 GB at HSPA+ or LTE speeds before throttling.

This is a super-typical "my precious country is so much darn better than that icky United States, let me inflate my ego with biased numbers to make my point" garbage that pollutes the Internet endlessly.

As far as Canadian rates, you are not paying "half" U.S. rates. Google "Canada cell rates" and you will see plenty of complaints about how high priced Canada's rates are. And to the Australian poster, we are not talking about small-town coverage. That's not going to help you one bit when you're 100 miles from any small town. Australia (understandably) is poorly covered with cell service. There are huge swaths of no coverage, lots of coverage that requires an antenna (antenna? - rest of the world got away from those things years ago). Verizon's coverage map is incredible; almost all of the lower 48 states have coverage now. And almost everyone in the U.S. can select from multiple broadband providers, no idea why one of the foreign posters thought otherwise.

Reply Score: 0

RE: Usual Internet Nonsense
by lookharder on Tue 26th Aug 2014 20:06 UTC in reply to "Usual Internet Nonsense"
lookharder Member since:
2014-08-26

Exactly.

Reply Score: 0

RE: Usual Internet Nonsense
by ilovebeer on Tue 26th Aug 2014 21:21 UTC in reply to "Usual Internet Nonsense"
ilovebeer Member since:
2011-08-08

Verizon's coverage map is incredible; almost all of the lower 48 states have coverage now. And almost everyone in the U.S. can select from multiple broadband providers, no idea why one of the foreign posters thought otherwise.

Yes, there is some coverage in all of the states, but that says nothing about how much coverage each state has. There are a number of states which still have a large portion without cellular coverage.

Additionally, broadband is usually offered one of 3 ways; by the local phone company as DSL, by the local cable company, and by a satellite provider. You're lucky if you have all 3 to choose from. It's not exactly a secret that we lag far behind in terms of a competitive ISP market, bandwidth speed, and pricing. Internet service here is largely a joke and the price we pay only rubs salt into the open wound. But then why wouldn't that be the case? The way things work here aren't geared towards giving people a break or a good deal. It's all about squeezing every single penny possible out of your wallet, keeping things just barely still within your reach. And where is all the money going that our telco and cable companies are raking in every month? NOT towards investment in anything that would benefit the customer. Your money is being spent to feed the beast with things like the Time Warner/Comcast merger. And the bigger the beast, the bigger the hunger for your hard-earned cash.

Reply Score: 5

RE: Usual Internet Nonsense
by unclefester on Wed 27th Aug 2014 00:58 UTC in reply to "Usual Internet Nonsense"
unclefester Member since:
2007-01-13

And to the Australian poster, we are not talking about small-town coverage. That's not going to help you one bit when you're 100 miles from any small town. Australia (understandably) is poorly covered with cell service.


Have a look at the map. The areas places that don't have coverage don't have people. Nobody visits them except to look for minerals.

http://www.telstra.com.au/mobile-phones/coverage-networks/our-cover...

Reply Score: 4

RE[2]: Usual Internet Nonsense
by zima on Fri 29th Aug 2014 14:50 UTC in reply to "RE: Usual Internet Nonsense"
zima Member since:
2005-07-06

Minerals! Hm, but what about vespene gas?...

Reply Score: 3

You're not looking hard enough.
by lookharder on Tue 26th Aug 2014 20:03 UTC
lookharder
Member since:
2014-08-26

I pay $5/month (5 cents a minute) with PTel Mobile, which uses T-Mobile's network. This gives me 200 minutes of talk per month on my smartphone and plenty of texting/data to suit my needs.

There are tons and tons of providers (you see commercials for them all the time) that offer great unlimited talk/text/web and 3G/4G data for anywhere from $30-$55 a month, with no contract. These are all providers that have been around for a while (PTel, Straight Talk, Virgin, Boost, Cricket, etc.) and use the major carriers (T-Mobile, AT&T, Verizon, etc.) and provide SIM cards that can be used with any phone that is compatible with the network type (GSM or CDMA).

Reply Score: 1

lookharder
Member since:
2014-08-26

>All because our government was smart enough to realise that it would take government intervention to ensure competition.

The problem here is that our government has prevented competition because they're in bed with the companies. The big telecommunications companies are only as big as they are because of this.

Reply Score: 1

Where is globalization?
by kpugovkin on Tue 26th Aug 2014 21:43 UTC
kpugovkin
Member since:
2011-07-05

If different prices in some countries are so annoying, why we don't completely abolish state borders and have just one uni-world government (whatever small or big) with proper antitrust regulations?

Reply Score: 1

benali72
Member since:
2008-05-03

It's not just cellphone bills. It's also internet and TV service, too. The U.S. has not prosecuted anti-trust vigorously for a generation and this has resulted in oligopolies for cellphones, landlines, internet connections, TV subscription services, and more.

The economic leadership of the U.S. is being endangered because our governent favors the lobbyists and the oligopolies above the vital competitive interests of our nation. We excelled economically for years due to our superior infrastructure. But if we continue on our current path of favoring corporations over the national interest, it's gonna hurt us, big time.

Reply Score: 3

ilovebeer Member since:
2011-08-08

We're already there and the worst part is nobody who could actually do something about it gives a shit. History has plenty of examples of where we're headed and it isn't pretty.

Reply Score: 3

zima Member since:
2005-07-06

So... "blame Canada"?

Reply Score: 2

ilovebeer Member since:
2011-08-08

Canada? No. We have greed & selfishness to thank for what's going on in this country.

Reply Score: 2

zima Member since:
2005-07-06

Well, it was part attempt at a joke, a South Park (the movie) reference, and generally how people tend to blame others for their trouble ...I guess I failed at conveying that. ;p

Reply Score: 2

Great "investigation"
by Evan on Wed 27th Aug 2014 06:10 UTC
Evan
Member since:
2006-01-18

There is a Verizon single line plan costs $60 per month + tax for unlimited talk, text, and 2gb of data, but the author used the more expensive and more flexible "more everything plan."

So, basically there exists a direct cost comparable in the US on a major network, and even the expensive VZW plan is not an appropriate comparison either as they have a much cheaper plan with the same data/talk/text as quoted in the article.

T-mobile has a 3gb plan (at 4G speeds, and then unlimited thereafter at lower speeds) for $60 as well, but also includes unlimited streaming of music (another comparison the article makes).

Journalism just doesn't exist anymore.

Edited 2014-08-27 06:11 UTC

Reply Score: 1

RE: Great "investigation"
by henderson101 on Fri 29th Aug 2014 16:19 UTC in reply to "Great "investigation""
henderson101 Member since:
2006-05-30

But, with all US Cell plans, the call and the callee are still charged, as are the texter and the textee. In the UK, only the person creating the call/text are charged, and if your plan provides "free" SMS and calls, no one pays any more than the standard monthly tariff. That is the part I could never understand about the US - you get almost free local landline calls, yet you gouge cellphones. From what I've seen, the call costs in Canada (I've not looked in depth at the US) are actually comparable to the UK (circa 25p vs circa 40 cents), and you still would seem to get double charged. That makes zero sense to me. My monthly cost never incurs extra charges. My calls are covered by allowance and my texts are completely free and unlimited.

Reply Score: 2

It's about puschasing power
by spiderman on Wed 27th Aug 2014 17:05 UTC
spiderman
Member since:
2008-10-23

I believe that's because they have more purchasing power. A cell phone plan is almost mandatory these days. You basically have to have one. They just charge whatever you can afford. It has nothing to do with their cost, population density or competition. Competition is actually driving prices up, not down, because higher price mean more profit and that is what they are competing for. Lower profit mean investors go away, stock price goes down, and then you get bought, sliced, crushed and destroyed.

Reply Score: 1

RE: It's about puschasing power
by zima on Fri 29th Aug 2014 15:14 UTC in reply to "It's about puschasing power"
zima Member since:
2005-07-06

A cell phone plan is almost mandatory these days. You basically have to have one.

Nah, you can happily live on a prepaid SIM in most places. In fact, last I heard, the majority of nearly 7 billion mobile subscribers ( http://en.wikipedia.org/wiki/List_of_countries_by_number_of_mobile_... "World" & https://itunews.itu.int/en/3741-Mobile-subscriptions-near-the-78209b... ) are on prepaid.

Reply Score: 3

RE: It's about puschasing power
by zima on Tue 2nd Sep 2014 23:57 UTC in reply to "It's about puschasing power"
zima Member since:
2005-07-06

PS. I went on a quick search, wondering how many prepaid subscribers are there now...

http://www.ericsson.com/res/docs/2013/end-of-prepaid-postpaid-final...

The rapid popularization of the mobile phone in the 1990's was largely due to two key innovations:
[...]
> the introduction of prepaid as a payment option, which made mobile services available on a mass-market scale.

...and lower a diagram showing that prepaid is used by 55% of the world's mobile subscribers (vs 43% for post-paid and 3% "other or combination"). Hm, seems a tad low.

https://mobiledevelopmentintelligence.com/statistics/75-connections-...
not all countries are here, but one can see how prepaid is dominating

http://en.wikipedia.org/wiki/History_of_the_prepaid_mobile_phone
In developing countries pre-pay tariffs are chosen by the overwhelming majority of subscribers.


http://en.wikipedia.org/wiki/Prepaid_mobile_phone
By 2003 the number of prepaid accounts grew past contract accounts, and by 2007, two thirds of all mobile phone accounts worldwide were prepaid accounts.[citation needed]
[yeah...]

And finally...
http://arstechnica.com/business/2012/06/prepaid-mobile-phone-users-...
Western Europe is about 70 percent prepaid. China, India, and Africa reach 70, 95, and 99 percent, respectively.
[...]
“Most of the world doesn’t live with contract anyway, and that was the only place we were going to be able to grow,” Jayne Wallace, a Sprint spokesperson, told Ars.


(no doubt prepaid adoption is helped by this http://en.wikipedia.org/wiki/Electronic_reloading )


PPS. And on the general subject of the thread...
You know something is heavily overpriced in your country when it costs more than it does in "rip-off Britain" or "high-tax Scandinavia"!
;)

But something else curious about Three popped up...
http://arstechnica.com/business/2012/06/prepaid-mobile-phone-users-...
Three in the UK filters their internet... by default they block any "adult" related sites, which tends to block a wide variety of sites that aren't really that adult. You can get the blocks repealed, but for that you have to be a UK citizen.

Hm?...

Edited 2014-09-03 00:09 UTC

Reply Score: 2

PeterS
Member since:
2014-08-28

There are many (possibly valid) explanations in the 70 comments above but I think the main one is still missing – WHO pays the bill.

USA: The user of the cell phone pays a charge every time they use the phone, regardless of whether they are calling someone or receiving a call. When calling, you pay the same amount regardless of whether you’re calling a landline or a cell phone.

Europe (at least the countries I know): The caller pays a surcharge if they call a cell phone (i.e. there are different rates for calling landline or mobile networks). The cell phone owner pays nothing when receiving calls.

The European model (sorry to use the label indiscriminately, I don’t have any experience in Asia/Australia) spreads the cost over more customers, hence the (part of the) bill that goes to the cell phone owner is subsidized by the other customers and, ceteris paribus, should be lower.

Reply Score: 3

kwan_e Member since:
2007-02-18

USA: The user of the cell phone pays a charge every time they use the phone, regardless of whether they are calling someone or receiving a call. When calling, you pay the same amount regardless of whether you’re calling a landline or a cell phone.


So you're saying the USA cellphone market operates like the Victorian postal service? The receiver of mail pays for the mail.

Reply Score: 3

ilovebeer Member since:
2011-08-08

USA: The user of the cell phone pays a charge every time they use the phone, regardless of whether they are calling someone or receiving a call. When calling, you pay the same amount regardless of whether you’re calling a landline or a cell phone.

I'm not sure where you heard that but, not quite. First, we don't pay a charge to use cell phones. There's no fee for placing or receiving a cell call. If a call is connected, a price for that call is tallied based on minutes connected and minutes available. Most people I know pay a flat monthly rate for unlimited calling. For example, $50/month whether you make 10 calls or 10,000 calls of any duration. For people using pre-paid/limited minutes service, most providers don't deduct minutes if you're calling another phone with the same provider (for example, AT&T wireless calling AT&T wireless).

Reply Score: 2

Comment by kittynipples
by kittynipples on Thu 28th Aug 2014 12:26 UTC
kittynipples
Member since:
2006-08-02

"Meanwhile, here in The Netherlands (I can't speak for other countries), our government mandated that the owners of the physical cables provide access to other players, ensuring competition across the board, which has benefited all of us."

That is swell for the "competitors" who get to resell services without having to bear any risk associated with building out their own infrastructure. We have that nonsense here in the states too with landline telephone service, and time has shown that incumbents have little incentive to invest in infrastructure improvements when all of their free-riding competitiors can just undercut them on retail pricing at no risk.

Reply Score: 2