The Reason Why AT&T Sucks is Important

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Tod Kelly

Tod is a writer from the Pacific Northwest. He is also serves as Executive Producer and host of both the 7 Deadly Sins Show at Portland's historic Mission Theatre and 7DS: Pants On Fire! at the White Eagle Hotel & Saloon. He is  a regular inactive for Marie Claire International and the Daily Beast, and is currently writing a book on the sudden rise of exorcisms in the United States. Follow him on Twitter.

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112 Responses

  1. Avatar Kazzy says:

    Two things…

    “And the reason they don’t, ironically, is because that’s the way the free market — the real one, not the one on paper — actually works in a large democratic society.”

    Part of the problem is that we don’t really have a free market. Not with telecom. You and I couldn’t open up a competitor to AT&T tomorrow. There are too many rules about airspace and whatnot.

    I had a similarly frustrating situation with my old cable provider in Maryland (I’ve blacked out which one it was). What had happened was — out of no where — our cable box stopped working. They sent a tech out who said, “Weird. The box just went haywire,” and replaced it. Not so bad, eh? I then found a charge on my bill for the visit. I don’t remember how much it was… enough to be annoying but small enough that many people might have missed it… maybe $20? I called to complain.

    “I’m sorry, sir, but we recently redid our contract and in it it clearly says that any and all tech visits will require this fee.”
    “I didn’t sign any new contract.”
    “But you didn’t cancel. That means you accepted the terms.”
    “Okay. But your tech said the device broke on its own. That’s your fault, not mine. Why should I be charged?”
    “That’s what the contract says.”
    “Okay. But this incentivizes you to make faulty devices. You could push a button somewhere and probably shut down every box in the county and then conveniently rake in that fee for every customer.”
    “But we wouldn’t do that, sir.”
    “Why should I believe that?”
    “We just wouldn’t.”
    “Let me speak to a manager.”
    I was put briefly on hold before being hung up on. Not call dropped. Hung up on. I called back right then, cancelled, and switched to satellite.Report

    • Avatar Tod Kelly says:

      “Part of the problem is that we don’t really have a free market. Not with telecom. You and I couldn’t open up a competitor to AT&T tomorrow. There are too many rules about airspace and whatnot.”

      As I said, not on paper. You can only have an open, unregulated industry in a democracy so long before a small select group of companies either collude and/or monopolize to eliminate competition, or have legislative bodies rig the system in there favor. Because that’s what a system based on greed in a democracy will ultimately engender. And either way, it’s good for the company and not so good for consumers.

      (It’s kind of like saying that if only all of our cats didn’t eat the salmon I leave out on our counter, we would have salmon for two dinners without having to put some in the fridge immediately. It’s a solution that only works on paper, cause cats gotta be cats.)Report

      • Avatar Will Truman says:

        In my perfect world, the cell phone industry would be far different than it is. Accepting certain constraints, though, I think the consolidation has by-and-large been a good thing. Perhaps not for customer service, but network strength. I was with {Regional carrier} which became a Bell which became SBC which became AT&T which Cingular which became AT&T (again) (I may not have the order right). But with each merger came better network service. More minutes, wider coverage areas, better indoor signals.

        It seems to me like four networks is too few and I would prefer maybe six, but no matter what we’re almost certainly talking about very limited selection of networks. There are actually quite a few options with sub-carriers (I can’t remember the official term) for those interested. They’re going to be on one of three or so networks.Report

      • Avatar Murali says:

        @tod-kelly
        I think Hanley’s anti-rent seeking amendment is important here. If that amendment were built into the constitution, it seems more than plausible that an initially free system would not be gamed by companies lobbying for corporate welfare.Report

      • Avatar Mad Rocket Scientist says:

        Can we get Hanley’s anti-rent seeking amendment now?Report

      • Avatar James Hanley says:

        @mad-rocket-scientist

        Write your congressmember!Report

      • Avatar Glyph says:

        What reason, then, does [MRS’ congressperson] have to respond to [MRS’] complaints, other than to fulfill their minimum regulatory requirement of acknowledging that [MRS] has one before telling [MRS] to fish off and stop bothering [MRS’ congressperson]? The answer, of course, is “none.”

        Report

      • Avatar Mad Rocket Scientist says:

        @glyph

        Another reason why I am a libertarian.Report

      • Avatar Glyph says:

        @mad-rocket-scientist – I had a longer comment in mind, explaining how Tod’s complaint that once an institution reaches a certain size it becomes unresponsive to its “customers” applies equally (if not more so) to the traditional libertarian complaints about the Fed and citizens, but I didn’t get around to writing it.

        Basically, if democracy is the worst system except for all the others, so is capitalism.

        Can I just say that maybe Tod should switch his phone provider to “Somalia”? 😉Report

    • Avatar Badtux says:

      Okay, so I’ve read all these comments, and it seems to me that everybody is overlooking the elephant in the living room. The elephant being, *cellular bandwidth is a fixed commodity*. The laws of physics say there is only a certain amount of frequency spectrum. You can’t build more frequency spectrum — what’s there is what’s there, set by the laws of nature. You can’t drill for more frequency spectrum. Ditto. So comparing AT&T Wireless with, say, Standard Oil, is ludicrous. Competitors to Standard Oil could drill their own oil wells and build their own oil refineries. Competitors to the current established incumbents cannot drill for more spectrum or build spectrum refineries. What’s there, is there.

      In short, a “free market” for cellular service would look much akin to a hydraulic empire (I’ll wait while you go Google it), where the first company to gain significant advantage in amount of frequency spectrum owned would use that significant advantage to either buy out or drive competitors out of business, buying their spectrum in the end game. In the end one company in a “free market” for cellular service would own the vast majority of the spectrum, meaning that it would literally be physically impossible under the known laws of physics to compete with them. The *only* reason we don’t have that situation is because the FCC has prevented it via regulation (prohibiting mergers, forcing companies to sell off various assets including frequency spectrum when there *are* mergers, etc.).

      As for the issue of “why do regulated markets look so much like monopolies”, you’re putting the chicken ahead of the egg. Most heavily regulated industries become heavily regulated industries because they *already* look much like monopolies, not the other way around. Phone service, for example, despite the hand-waving of the Cato libertarians, becomes a natural monopoly unless there is government regulation to force phone companies to interconnect calls. Over time the majority of people gravitate to one phone company, and without interconnections, you have to get service from that one phone company else you cannot complete your call. And once you achieve sufficient scale to reject interconnecting with competitors, there are no — zero — market forces that would cause you to interconnect. And if you’re that big, who would use one of the small competitors when most of the people they want to talk to can’t be reached from that small competitor?

      Thus regulation. And, I might add, the current “net neutrality” situation, which is about forcing Internet backbone providers to interconnect with each other when you get down to its very core.

      The question, then, becomes what to do about the situation in the cellular telephone market. One possibility would be to take little-used spectrum away from other industries and sell it to new competitors who would not be allowed by the terms of sale to sell it to established incumbents. That typically results in huge squawks of dismay from those other industries. I had a bunch of stuff here about various proposals that got shot down due to lawyers, guns, and money, but I’m sure it’d bore you silly. Let’s just say that nobody wants to give up spectrum they’re currently allocated, even if they’re not using it or are using it in a ridiculously inefficient manner. Spectrum defenders make gun rights defenders look like disorganized bumpkins. The other possibility would be increased regulation such as is typical in Europe, where for example “locked” telephones and multi-year contracts are not allowed under most governments’ regulations. Neither seems very likely in today’s political environment in the USA. And even the new bands would require government regulation to keep established incumbents from buying them in order to reduce competition, which is again a non-starter in today’s political environment.

      Thus my suggestion to you, the poor AT&T customer, is to regard AT&T customer service to be much the same definition of “service” as a stallion provides a mare. Bend over and, erm, not enjoy it, but this is the system We The People accidentally built via our neglect and superstitions, so we’re enjoying life in Mencken’s description of democracy as being “giving the people what they asked for, good and hard.” So it goes.Report

      • Avatar Tod Kelly says:

        “I had a bunch of stuff here about various proposals that got shot down due to lawyers, guns, and money, but I’m sure it’d bore you silly.”

        Like fish it would. Loved this comment, and feel free to continue as long as you want or need in my threads.Report

      • Avatar Patrick says:

        Let’s just say that nobody wants to give up spectrum they’re currently allocated, even if they’re not using it or are using it in a ridiculously inefficient manner.

        See also my rant about the Aereo decision and local television broadcasters.Report

      • Avatar Mad Rocket Scientist says:

        @badtux

        That all seems t jive with what I know of the wireless industry & spectrum allocation. I seem to recall reading about new ways to cram more communication streams into the available spectrum, but the tech in question is limited to a specific frequency range, and the ability to utilize that spectrum is not infinite, even if it does grow (a simplistic example is that with an advance in tuning capability, you can go from being able to pass data on 2.452 GHz & 2.453 GHz, to passing data on 2.4521, 2.4522, 2.4523, etc. – you get more channels, but the tech has to be able to handle the precision tuning & interference from other nearby channels, and I’m already getting out of my depth here).Report

      • NobAkimoto NobAkimoto says:

        I think this needs to be comment rescued.Report

      • Avatar Glyph says:

        Not only comment-rescued, but I’d also like to see the ‘net neutrality’ section expanded and clear parallels drawn, as it’s both A.) Something that’s been under-covered here, IMO and B.) Something that’s still young, so there’s theoretically still a chance to get it right, unlike the hash we’ve apparently made with telecoms.Report

      • Avatar James Hanley says:

        I had a bunch of stuff here about various proposals that got shot down due to lawyers, guns, and money

        Damn that blog!Report

      • Avatar Jim Heffman says:

        “Phone service, for example, despite the hand-waving of the Cato libertarians, becomes a natural monopoly unless there is government regulation to force phone companies to interconnect calls.”

        See also, for example, Facebook and its competitors.

        “But wait, Facebook doesn’t have any competitors.”

        Yes, exactly.Report

      • Avatar Badtux says:

        1) Facebook doesn’t control communications through your Internet pipe, thus comparing Facebook to POTS is ridiculous.

        2) Facebook would be POTS if they controlled the actual physical Internet connections to your home *as well* as controlling the back end servers so that if anybody wanted to communicate with you via the Internet, they had to be a Facebook subscriber. Thus far technical measures instituted by the original government founders of the Internet plus regulation have prevented, say, Comcast, from implementing a monopoly of this sort in their areas of service, though Comcast’s recent actions vis a vis Netflix seem to be pushing this a bit.

        3) Your argument is thus delusional nonsense. Facebook is a *customer* of communications, not a *provider* of communications. They are the phone bank of the Internet, a customer of the people who provide the physical communication pipes, not the Ma Bell of the Internet. My argument was about communications providers (i.e., people who run wires into your house), not about customers of communications providers. Past a certain point, there is an incentive for a company that has gained a majority of wires into houses to refuse to interconnect with other companies that run wires into houses unless those other companies pay an large fee for access to the near-monopolist’s physical network. That’s just how the economics work — remember, a businesses’s prime duty is to *increase profits*, not serve customers. Serving customers is *incidental* to increasing profits, and is done only insofar as it is necessary in order to obtain and retain sufficient customers to increase profits.

        Thus far the only thing we’ve found that can force interconnections once a provider gets into that near-monopoly position is government. Thus the whole “net neutrality” thing, which, at its core, is about preventing near-monopolists from using their position in order to warp the interconnection system that was built into the original government-funded Internet in order to increase their profits.

        Another thing I’ll point out is that the Internet as a commercial activity is now roughly twenty years old. That’s it. It’s a very immature industry, and undoubtedly we’ll find other choke points other than the physical wires (or wireless spectrum) as things mature. But that’s a subject for more thought and another post.Report

      • Avatar Michael Cain says:

        The laws of physics say there is only a certain amount of frequency spectrum. You can’t build more frequency spectrum — what’s there is what’s there, set by the laws of nature. You can’t drill for more frequency spectrum.

        Over time, though, we have been able to make use of higher and higher frequency spectrum. One analog of drilling is faster transistors and buckets full of processing power. Adaptive phase array antennas are going to be cheap enough to make a serious difference in the future. We also squeeze a lot more content into a fixed amount of spectrum, both by better coding and by smaller cells. Digital over-the-air television made it possible to put the same number of stations into much less total spectrum because guard band became less of an issue, freeing up spectrum for other purposes. Wifi (802.11x wireless ethernet) originally ran at about a megabit. 802.11g packs 54 Mbps into the same amount of spectrum.Report

      • Avatar Badtux says:

        But all spectrum is not created equal. For example, lower frequency spectrum will propagate at ground level for long distances or even, if low enough, propagate through water (which is how the military communicates with submarines). Higher frequency spectrum will propagate via tropospheric reflection. Higher still only propagates line of site. Lower frequencies will penetrate most building materials. 800mhz, the old cellular frequencies, will penetrate most building materials. Once you get up to 1600mhz, penetration becomes problematic, a cell phone will have 1 or 2 bars in a typical building on that band. Above that, when you get to 5ghz, you can basically only use the radio outdoors or to communicate with people in the same room or connected rooms (assuming you can bounce signal through a door to them).

        This is all a matter of physics and no amount of hand-waving will allow using 5+Ghz-frequency devices to communicate with entities outside whatever structure you’re currently occupying. So yes, usable spectrum *is* limited if you’re wanting to communicate beyond the bounds of a structure with a handheld device (as vs something that has an antenna cable and an outdoors antenna, such as the ubiquitous satellite TV dishes).Report

    • Avatar Brandon Berg says:

      But this incentivizes you to make faulty devices.

      At $20/visit and having to replace the box, it seems like they’d still be losing money on defective boxes.Report

    • Avatar Barry says:

      Kazzy: “Part of the problem is that we don’t really have a free market. Not with telecom. You and I couldn’t open up a competitor to AT&T tomorrow. There are too many rules about airspace and whatnot.”

      IMHO, they would pale in terms of the fact that you don’t have their size.Report

  2. Avatar greginak says:

    Somewhat along this line there are the large multi-national companies. BP is a big player in the oil patch up here. After the Deepwater oopsie some people were all torked off at them up here for other more minor environmental problems so they protested outside the BP building. The B in BP of course stands for British. The execs here are paid to listen to complaints from alaskans and to ignore them. Sure they want to drill for oil and that is important to them. But i imagine they fly the execs over to england enough to buy them a few beers to assuage their alaskan hardships. BP, which by isn’t the worst offender btw, is so big and so spread around the world it is pretty much insulated from caring about silly little public opinions or those cute little locals. Hell they are even big enough to slow down work in one country if they don’t like the perks we offer them for the privilege they give us of drilling our oil.Report

  3. Avatar Will Truman says:

    The reason? Like there’s only one?

    I actually had a very good experience with AT&T when we had a billing “problem.” Two, actually. I put “problem” in quotes because the bill was actually accurate. I can’t recall the specifics, but for some reason my smartphone, on which I’d turned data off, suddenly started soaking up bandwidth. We had no data plan (back when you could do that*), which meant that we were charged some $180 for my per-byte data usage. Anyway, we called AT&T and they actually waived it as long as we signed up for a data plan. Which we could cancel after the first month if we wanted. We chose not to. (Maybe it was all a dastardly trick!)

    Then we moved to Arapaho, which had no AT&T coverage. Which meant that even though we were on a data plan, we were racking up significant roaming fees without my knowing about it. Once again, they waived it as long as I agreed to change providers and turned data off in the meantime.

    Anyhow, I’ve been with Verizon ever since and even though they are the most evil company of the lot I have been reasonably happy with their service and they have the best phone selection for our purposes (as an Applyte that probably doesn’t matter to you, though). T-Mobile is ethically the best, though (a) their service area is minimal if you do a lot of traveling and (b) they do have some bad policies regarding used phones. I’m hoping they will fix (b) and become the best cell phone company I never use again.

    * – You still can, actually, as far as I know, with one Neat Little Trick. Anyone interested in having a smartphone but not having a data plan should email me for details. (Only applies with certain phones.) (Not iPhones.)Report

    • Avatar aaron david says:

      @will-truman Verizon, by the way, is one of the former baby bells, Bell Atlantic.Report

    • Avatar Will Truman says:

      So, Verizon may be evil, but they’re apparently responsive!Report

      • Avatar Barry says:

        I switched from ATT to Verizon.

        1) The sales swine BS-ed me like a farmer’s field; I was ripped off for a hundred $$.

        2) My first mother %$#$^@%&^@$&#$%#^ experience getting serviced as a customer would have resulted in my arrest for assault if it had been in person. The servicer used some phrase ‘like we value your business and blah blah blah blah’ (about two minutes long) to start *everything* that she said. (apologizing for the metaphor) I felt like a woman talking business with a guy, with him starting everything he said with ‘you know, you’re a beautiful woman’. It started as unpleasant, and went to infuriating.

        My next phone will be a cheap Android, and I’ll go with the least-commitment-requiring ‘servicer’.Report

    • Avatar Mike Schilling says:

      What makes Verizon evil? They’ve never tried to cheat me (or perhaps they’re so good at it that I’ve never figured it out) and their tech support is first-rate, uniformly positive and helpful.Report

      • Avatar Michelle says:

        We’ve been reasonably happy with Verizon as in we’ve been with them for years and they haven’t done anything that really pissed us off. They were actually quite nice about waiving $300 plus in data fees my stepson racked up a few years back doing something we hadn’t authorized.

        But, as with all behemoth companies, if we decided to up and leave tomorrow, they wouldn’t care. They don’t have to. My dad discovered the same was true with Wells Fargo when they switched up his accounts and added charges. He’s been banking with them for years and keeps a fairly large sum of money with them and their attitude toward his complaint was pretty much “meh.” Wells Fargo doesn’t really make its money off of branch operations. And they really are evil.Report

      • Avatar dhex says:

        “and their tech support is first-rate, uniformly positive and helpful.”

        ha ha what?

        oh you use berizon. i heard they’re good.Report

      • Avatar dhex says:

        that said my verizon home 4g service, though insanely expensive, is quite good. far better than satellite would be. such is rural living.

        i also get amazing cell service at home – e.g. only manhattan and parts of brooklyn were as stable consistently – but i’m all of a mile away from a tower.

        that said calling them is an exercise in annoyance and the co-branding they have for affiliated resellers feels like a sticky trap.Report

      • Avatar Citizen says:

        I worked as a CS Rep (NY area) for Ver*zon for a number of months. Most every interaction and response is scripted for the CSR.

        The one big blind spot was in billing. The ability to correct billing mistakes in the system could take months or beyond two years to correct.

        From what I recall we sent in bill fix requests to the higher ups and it would supposedly get placed in que to be fixed. I didn’t observe a bill correction that led to expected outcomes.

        I am suprised the CSR didn’t give a sincere “systems fubar” apology with the $50 give-it. Did they ever transfer you to a customer retainment department?Report

      • Avatar Glyph says:

        T-Mobile’s coverage indeed lacks in some places, but their customer service is pretty good in my experience. I had to deal with them yesterday and though there were some bumps (they were having some issues with their site) they were very helpful/polite etc., made it a point to note how long I’ve been with them, sent me some free gear, surveyed my reaction to their service (multiple times, actually) etc.

        Anyway, if their coverage would work for you, they are worth checking out IMO.Report

      • Avatar Tod Kelly says:

        @citizen I’m assuming this was not meant to be nested here, and was directed at me? (If not, apologies.)

        No, I was never transferred to a customer retainment department. In fact, the reason I went into the retail store was in the hope that talking to a manager of any type might better my chances of getting help. When I had been on the phone previously I had asked to speak to a manager, and though they got one I never spoke to him/her — the CSR that had originally answered acted as a go-between for the entire call.Report

      • Avatar Kim says:

        1) It takes bitching to the Feds to actually get service. (now, any poor service can be deemed retaliatory, so I’m in the gold).
        2) HOW wrong can you get a name? Our bills are no longer delivered to a coherent, lawful customer, I’m pretty sure (seriously, if you’re not including the last name, AT ALL in the bill).
        3) They still haven’t fixed my phone line (it’s got a temporary fix, right now). It’s been weeks.Report

  4. Avatar James Hanley says:

    Tod, I’m sympathetic–actually, empathetic–to your situation, and do think that corporations that reach a particular size can be problematic in the market.

    That said, you begin by saying you’re going to talk about how “free” markets work, then you shift to saying that half the reason AT&T can act that way is because of the subsidies they get and how they–your words–have rigged the system. Maybe the problem is not so much–at least not solely–the free market, but the non-free market aspect of this?

    And let’s not forget that large corporations do, in fact, fail. It may be less that size allows one to blow off customers successfully than that size leads a business to screw up things like customer service, which they can get away with for a while–and a while longer if government is intervening in the market to subsidize them–but not in perpetuity.Report

    • Avatar Tod Kelly says:

      @james-hanley

      Two quick thoughts…

      1. My replay to Kazzy about “free markets in a democracy” in real life v. on paper seem a good response here:

      You can only have an open, unregulated industry in a democracy so long before a small select group of companies either collude and/or monopolize to eliminate competition, or have legislative bodies rig the system in there favor. Because that’s what a system based on greed in a democracy will ultimately engender. And either way, it’s good for the company and not so good for consumers.

      (It’s kind of like saying that if only all of our cats didn’t eat the salmon I leave out on our counter, we would have salmon for two dinners without having to put some in the fridge immediately. It’s a solution that only works on paper, cause cats gotta be cats.)

      2. It is true that large corporations fail. But I would argue that once you get to a certain size, you’re (much, much) less likely to fail for market reasons.

      Detroit’s Big 3 spent decades making cars that people told them over and over they didn’t want, and they managed to pull through just fine because of a variety of laws, guaranteed govt loans, additional subsidies, and outright bailout money delivered over the course of the past 40 years.

      In the late oughts, a whole lot of banks and investment firms went upside down and failed. How many of those that failed are still in business today, making lots of money for investors? if you compared the size of the small-to-large sized banks that failed to the behemoths that failed, which were allowed — through massive intervention — to continue operations despite their failing?

      For that matter, how many behemoth banks have since not only failed, but been caught laundering drug money, committing purposeful fraud, and allowing the funding terrorist groups that were either propped up or given a “please don’t do it again” on that basis that they were too big to fail?

      Yeah, corporations of the size Im describing do sometimes go out of business, but it’s pretty damn close to never — and not because they don’t fail financially.Report

      • Avatar greginak says:

        Point 2: two words Donald TrumpReport

      • Avatar caleb says:

        You can only have an open, unregulated industry in a democracy so long before a small select group of companies either collude and/or monopolize to eliminate competition

        It seems far from certain, to me, that “natural” monopolies are at all the inevitable conclusion of an unregulated industry. To the contrary, it seems that the heavier regulated industries (communications, power, water, health, financial services ect.) tend more towards monopoly or oligopoly than more lightly regulated ones (e.g.retail, food services). At the very least, your assertion here is weak and counter-intuitive, requiring strong proof.

        a system based on greed

        What, exactly, do you mean by this term?Report

      • Avatar James Hanley says:

        @tod-kelly
        You can only have an open, unregulated industry in a democracy so long before a small select group of companies either collude and/or monopolize to eliminate competition, or have legislative bodies rig the system in there favor.

        Three responses.

        1. That may be true, but that doesn’t mean calling the result “free market” isn’t a misuse of language.

        2. That may be true, but the upside of democracy is that it happens much more quickly in a non-democracy. (Not that you were arguing against that).

        3. There’s a simply solution to this problem, Hanley’s anti-rent seeking amendment. Not to direct this at you, but it’s amazing to me that there are liberals who will simultaneously agree with your argument wholeheartedly and reject my proposal as a monstrous giveaway to corporations.Report

      • Avatar Roger says:

        Some say we get the Christmas we deserve.

        The only way to change the tendency of large incumbencies to seek privileged status is have a population which finds it repugnant and refuses to allow it. This is not the situation today.

        Even here it is possible that this will just delay cronyism and favoritism. Perhaps as Mancur Olsen suggests they are like death and taxes and inevitable in older societies. If this is the case, the only remaining solution is decay and replacement. Older societies, states, industries will decay and atrophy and newer ones will take their place. If all dogs get old and die, you better keep making new puppies.

        The situation reminds me of the age old debate of why Europe prospered and had an industrial revolution and modern breakthrough while a much stronger and more advanced China couldn’t. One contributing reason is that there were lots of competing and decaying states. As incumbencies stifled innovation and change in one place, the smart money and ideas flowed elsewhere, because they could.

        Jared Diamond calls it “intermediate fragmentation”. I call it constructive competition.Report

      • Avatar Tod Kelly says:

        @james-hanley

        “1. That may be true, but that doesn’t mean calling the result “free market” isn’t a misuse of language.”

        Oh, I totally stipulate to that — in the same way I’m happy to stipulate that using “communism” to describe all the real world communist countries is a misuse of language.

        “2. That may be true, but the upside of democracy is that it happens much more quickly in a non-democracy.”

        Absolutely agreed. Please don’t misunderstand, I’m not suggesting because it has inherent flaws that democracy — or for that matter capitalism — isn’t by far the best option out there. I have no desire to change the fundamental foundations of our system, even if they aren’t perfect.

        “3. There’s a simply solution to this problem, Hanley’s anti-rent seeking amendment.”

        It’s not that I don’t like the concept of such an amendment, it’s that I don’t think what would occur after it passed is what you believe would happen. And not because your thinking about the amendment is flawed so much as I don’t think human societies work that way. Power and money will always finds a way to sustain and restrict power and money — you just don’t necessarily know in advance what pipe will burst next once you’ve succeeded in plugging the one that’s leaking now.

        If there is a single flaw in those of us who are political junkies, regardless of strip, it is this: We succumb to the belief that with just the right tweak, all of those parts of a functioning society that fall prey to the lesser sides of human nature, crowd/mob behavior, and random s**t going wrong will somehow disappear.

        But that is probably a longer argument for a different post.Report

      • Avatar Mad Rocket Scientist says:

        @tod-kelly

        Of course those with power & wealth will seek to subvert the system. That doesn’t mean we have to make it easy for them.Report

      • Avatar Mike Schilling says:

        We should make it harder for them, so they’ll get cleverer about it. Evolution in action.Report

      • NobAkimoto NobAkimoto says:

        It seems far from certain, to me, that “natural” monopolies are at all the inevitable conclusion of an unregulated industry. To the contrary, it seems that the heavier regulated industries (communications, power, water, health, financial services ect.) tend more towards monopoly or oligopoly than more lightly regulated ones (e.g.retail, food services). At the very least, your assertion here is weak and counter-intuitive, requiring strong proof.

        You’re mixing up causation here. The industries you listed have generally been highly regulated because they became areas with monopolistic practices, or had such high fixed costs that they require intervention by the government to even establish.Report

      • Avatar caleb says:

        @ NobAkimoto

        You read more than I wrote. I make no assertions as to the direction of causality. I was merely countering Tod’s assertion that the inevitable result of unregulated industry is monopoly. There are numerous industries which are only regulated lightly or on the periphery of their operations, and engage in robust and healthy competition without government encouragement. This seems to rebut Tod’s assertion.

        The industries you listed have generally been highly regulated because they became areas with monopolistic practices, or had such high fixed costs that they require intervention by the government to even establish.

        Right. There are certian structural aspects of some industries which tend to push firms operating in them into monoplistic practices. I buy that argument, and I think that there’s many interesting points of analysis to be made in this space. But that’s not what Tod argued. He pointed to “a culture of greed” (still have no idea what that means), and asserted that the factors within this culture make the proliferation of monopolies universal across all industries. It’s this argument to which I object.Report

      • NobAkimoto NobAkimoto says:

        Fair enough. I don’t think “culture of greed” is the right term here. It’s simple economic self-interest for them to charge average cost pricing rather than marginal cost pricing. To expect an unregulated firm to produce more and incur a net loss in the process is irrational.Report

      • Avatar James Hanley says:

        @tod-kelly

        I don’t think my amendment would solve all problems, but it would give an avenue to challenge the corporatism you’re complaining about to a body that isn’t in bed with the corporations.

        And, coincidentally, this is relevant.Report

      • Avatar Mad Rocket Scientist says:

        @mike-schilling

        If it results in a higher quality power mad subverter, all the better.

        The ones we have now are just embarrassingly dumb.Report

      • Avatar LWA says:

        A culture of greed is a quip I have used myself before, but its not really accurate.

        What we have – and have always had, and always will have- is a culture in which greed and the desire for an unjust outcome are ever present alongside altruism and a desire for justice. They battle each other constantly, and are in constant need of evaluation and revision.

        Which is to say, that there doesn’t exist any sort of political or economic system which can be left to its own devices, where a spontaneous order will arise that produces justice.

        The desire to pervert a system, to game it to achieve unjust reward is always there. there really isn’t any limit to human ingenuity to find ways to make a level field unlevel, or blind system all-seeing.

        This is why I think the concept of “equal opportunity rather than equal outcomes” is so problematic- it presupposes that the outcome is just, until we can point to a lack of opportunity.Report

      • Avatar Roger says:

        @lwa

        Which is to say, that there doesn’t exist any sort of political or economic system which can be left to its own devices, where a spontaneous order will arise that produces justice. The desire to pervert a system, to game it to achieve unjust reward is always there. there really isn’t any limit to human ingenuity to find ways to make a level field unlevel….”

        Agree and disagree.

        I agree that people will always try to game the system for privilege. They always have.

        You suggest that a system cannot be left to its own devices without it being gamed. I would offer that it is also gamed when NOT left to its own devices, and is gamed when being redesigned not to be gamed. Just as importantly it is gamed by people who believe their ideas of justice take priority (privilege) over other people’s interpretation. Then people realize it is gonna be gamed one way or another so they might as well be the one doing the gaming. Turtles all the way down.

        There are various (imperfect) ways to solve this problem. Time proven methods include entrance and exit freedoms (to choose institutional parameters where practical). Benchmarking and transparency among competing institutional systems. And freedom to choose who to interact with and not interact with within a system ( which reduces opportunities for win/lose or exploitative interactions). I doubt you agree with these though.

        “This is why I think the concept of “equal opportunity rather than equal outcomes” is so problematic- it presupposes that the outcome is just, until we can point to a lack of opportunity.”

        Disagree. Again you assume everybody agrees with what fair or just is and that they share a common metric of desired outcomes.

        People need to decide this on their own, where possible. If people have more say in which system they play in, they can then have more input into deciding which definition of justice they want and they can balance that desire with other desires than justice. It is a personal thing.

        Those wanting equal outcomes should be able to find others agreeing to the concept. This will probably turn out the same as every other communitarian experimentation. My guess is it won’t last through the first winter.

        In the end, I think people will tend to choose equality of opportunity if given the choice and allowed to play the game out over time. The choice should be theirs if possible though.Report

      • Avatar James Hanley says:

        there doesn’t exist any sort of political or economic system which can be left to its own devices

        I’m not sure the concept of a political system being left to its own devices makes any sense at all.Report

      • Avatar LWA says:

        @roger
        No, actually I don’t think we all unanimously share the same vision of fairness or justice. That isn’t possible or even desirable. But a rough consensus is possible, and very desirable. The process of sorting this out is called politics.

        And I agree that people should discover this on their own…where possible. Which is the phrase that does nearly all the work in that sentence.

        I actually don’t disagree with any of the items you listed, so much as I think they are only tools, just like democracy itself; tools that can be gamed and abused nearly any way.Report

      • Avatar Roger says:

        Thanks for the reply @lwa

        I would certainly agree that a rough consensus is desirable in some areas and that politics is a method to sort this out. I don’t agree it is necessary or desirable in most areas of life though.

        One area where this is especially tricky is with notions of justice. To the extent people can agree and arrive at a consensus then I am hunky dory. I do not like someone being forced to agree with other’s notions because a majority disagrees with them.

        “Where possible” does do a lot of the work in my comment, but the point is it could do a lot more work in society as well. It is a vastly underused tool.Report

    • NobAkimoto NobAkimoto says:

      The thing here is that telecommunications basically satisfies all of the necessary conditions for a natural monopoly:
      1) Extremely high fixed costs.
      2) Limited amount of available spectrum (therefore adding to the advantages offered by being a firstmover).
      3) Nearly non-existent marginal costs.

      In cases where there’s been successful attempts to establish multiple competing firms in telecom (say ISPs) it’s because the fixed cost requirements were reduced by government intervention.Report

      • Avatar Barry says:

        “In cases where there’s been successful attempts to establish multiple competing firms in telecom (say ISPs) it’s because the fixed cost requirements were reduced by government intervention.”

        It’s because the governments treated the big boys as ‘common carriers’, and requited them to rent lines as for any other service.

        If they hadn’t, as soon as the internet became commercially interesting, ATT and the Baby Bells would have set up their own ISP’s and cut off everybody else.Report

  5. Avatar veronica d says:

    I’m with AT&T now because Verizon gets crappy reception in Boston. I could try one of the others, but really they are all equally bad and mostly they compete on — well I don’t really know, I think something like inertial combined with fashion. Anyway, I guess we all have these weird pseudo-choices, like to not own cell phones. I mean technically a human does not require cellular service to metabolize stuff, so yeah.

    Anyway, it’s probably better than centralized state socialism. But that does not mean it is this great rosy thing and we should all cheer “Yay market.”

    I want better healthcare. I’m pretty sure the “free market” (so called) is not going to get us that.Report

  6. Avatar Chris says:

    I say this only half kidding: get R. Typical conversation with AT&T:

    R.: Hi I am calling to say that my bills are outrageously high on the 300 plan. I think I’m going to get rid of my cable and reduce my internet speed.

    AT&T: Ma’am, have you considered our 200 plan? It’s $20 less a month.

    R: That’s not going to work for me, because I watch channels X, Y, and Z, which aren’t on the 200.

    [Ten minutes of voodoo that I cannot understand or replicate.]

    AT&T: OK ma’am, I have you on the 400 plan with all the movie channels, with 10 more mps on your internet, for [amount at least $30 less than she was paying before for the lesser cable and internet packages]. Can I help you with anything else this evening?

    R.: That will be it, thank you.

    She says that the secret is to try more than one rep, and always threaten to leave up front, but I can’t pull it off myself. Half the time, she knows all about the rep’s life by the time she gets off the phone, and she’s always giving them movie and recipe recommendations. It’s a art, and she is the master.

    Also, the market sucks.Report

    • Avatar Will Truman says:

      When I took calls for a satellite company I was authorized to give away crazy amounts of stuff.Report

    • Avatar James Hanley says:

      That’s pretty amazing for a statistical software package.Report

    • Avatar Murali says:

      My uncle does the something similar with Credit cards. Some credit cards over here have a first year no fees package (that is, they waive the fee in the first year) and automatic renewal when the annual fees kick in. My uncle calls them up and states that he intends to cancel his card citing the fees. They typically waive the fees for one more year.Report

    • Avatar Brandon Berg says:

      One time I called up Comcast to see if I could save money by cancelling my cable TV and just keeping the Internet service. That’s literally all I asked them: What would my bill be if I cancelled the cable TV service? They told me I’d save a few dollars a month. I decided it wasn’t worth cancelling, but just as I was about to hang up the representative told me that they’d lower my monthly payment from $70/month to $40/month for the next six months. Not sure if she was just the world’s worst negotiator or what, but that happened.Report

      • Avatar Jim Heffman says:

        From Comcast’s viewpoint, they’re spending $180–about as much as they paid in salary just to take your call–to keep you as a customer for the indefinite future because “hey they gave me a break that one time, now I have a positive feeling about Comcast as a service provider”. Good deal for them.Report

    • Avatar Kim says:

      My husband manages to get tons of free stuff without the threats. Then again, he won’t speak to a male rep (unless they’re gay) — just hangs up and tries again.Report

  7. Avatar LeeEsq says:

    A relevant conversation on the re-emergence of monopolies with Thomas Frank and Barry Lynn:

    http://www.salon.com/2014/06/29/free_markets_killed_capitalism_ayn_rand_ronald_reagan_wal_mart_amazon_and_the_1_percents_sick_triumph_over_us_all/?utm_source=twitter&utm_medium=socialflow

    The rough thesis is that monopolies are kind of natural unless government acts to intervene and make way for some forms of competition. For Tod, the bad part is that many services and businesses are natural monopolies because they are infrastructure heavy. Various communication businesses like telephone or cable are good examples of these natural monopolies. The best you can do is regulate for the public benefit. In other businesses, you can pass legislation to ensure that there is at least some competition.Report

    • Avatar James Hanley says:

      A minister and a journalist talking about things they don’t understand. It didn’t take reading very far into that article to realize they were out of their depth.

      Here’s a pro-tip. Anyone who seriously insists Standard Oil was a monopoly has been feeding on a diet of pop economic history and/or assuming that a court that made an economic pronouncement has some kind of intellectual authority. Standard Oil looked like a monopoly when it was first put together, but from the very beginning lost market steadily from competition–and if you have competition that eats away at your market share, you. are. not. a. monopoly.Report

      • Avatar Burt Likko says:

        Well, isn’t that why it is more properly referred to as a “trust”? And the problem isn’t monopolization, it’s anti-competitive practices (loss leading, locality discrimination,etc.), amirite?Report

      • Avatar Tod Kelly says:

        Yes, what Burt said.

        In today’s world, I actually believe collusion is a greater challenge than monopolies. We all seem to agree that monopolies are wrong, but we seem pretty peachy with collusion.Report

      • Avatar James Hanley says:

        Burt,

        Iirc, the “trust” aspect had to do with the fact that they were operating multiple state-level-incorporated businesses as a single business, because the law prohibited cross-state incorporation. So a setup like today’s GM, headquartered in Michigan, but with operations in Indiana, Ohio, California, etc., would have been illegal. We never actually busted trusts, we changed the rules to normalize them. Rockefeller would have loved to have made Standard Oil just one large corporation instead of many smaller ones “colluding” as one.

        And the allegations against Standard Oil are mostly false or misunderstood. Yes, they got lower prices from the railroads, but that’s because they shipped so much quantity that they could negotiate lower prices. Yes, they bought out local competitors, but they bought them out, not forced or bankrupted them out. And even so they were unable to maintain their market share–they couldn’t, or didn’t see a need, to buy out competitors as fast as they sprang up. Heck, the government didn’t get around to ruling them a monopoly until about 1/3 of their market share had already been competed away.

        Monopolies have a few key characteristics. Barriers to entry keep competitors from entering the market to challenge them. So the monopolist does not need to innovate and can raise prices. The first, as I showed, doesn’t hold. Neither do the other two. Standard oil found new uses for the fractions of oil that had previously gone to waste (generally dumped in streams). And the main oil product at the time they became a trust, kerosene, saw its price drop, iirc, by about 90% in around a decade. That wasn’t loss-leading, but refining innovations and cheaper transportation.

        Other than their initial size (around 90% of the market when the trust was formed), nothing about Standar Oil actually fits the definition of a monopoly. It’s our classic case of the “dangers” of monopoly, and it’s a complete myth.Report

      • Avatar James Hanley says:

        Tod,
        Not an argument, but riffing off what you said, there’s an old joke about three businessmen who find themselves in court, and ask each other why they’re there.

        The first one says, “they’re charging me with price gouging, because I charged kore than my competitors.”

        The second one says, “they’re charging me with predatory pricing because I charged less than my competitors.”

        And the third says, “they’re charging me with collusion because I charged the same amount as my competitors.”Report

      • NobAkimoto NobAkimoto says:

        Here’s a pro-tip. Anyone who seriously insists Standard Oil was a monopoly has been feeding on a diet of pop economic history and/or assuming that a court that made an economic pronouncement has some kind of intellectual authority.

        I don’t think this is true. While the Ida Tarbell related narrative has been more or less shown to be less than complete (and was focused far too much on firm size rather than monopoly/oligopoly status) there’s still a substantial amount of economic literature that examines the near monopoly status of Standard Oil, particularly as it pertains to cartel behavior.

        In fact from what I recall when I was reading the Chernow biography, Standard Oil’s monopoly is still considered to have some economic basis and Granitz-Klein which pushed a new model of their market power strength in the 1990s is still the usual model pushed when teaching about monopolistic processes.

        George Priest went a few rounds with Ben Klein on the matter and you can see the exchange here
        http://lawreview.usc.edu/wp-content/uploads/slideshow/85SCalLRev_Priest.pdf

        http://lawreview.usc.edu/wp-content/uploads/slideshow/85SCalLRev_Klein1.pdf

        But in any case I think it’s disingenuous to state that Standard Oil was never a monopoly.

        Part of the reason they lost market share was due to the fact that the market was expanding a substantially greater rate both in terms of scope and in terms of scale, than they had the ability to fill. There was sufficient slack outside of the East Coast/Midwest that left room for large scale investment in the infrastructure – infrastructure that, in all honesty, could be considered an entirely separate market from Standard Oil’s core business realms.

        There is a significant problem in considering the US energy and oil market in the 1870s – 1920s as being a unitary market (in fact, arguably there’s a significant problem in considering it one NOW much less 100 years ago). The extremely regionalized nature of both the infrastructure needed to produce, transport, and market oil products and the highly regional production system made it easier for there to exist regional monopolies.

        So while yes, Standard Oil’s total US market share was down to about 65% by 1911, given in regional chunks, that 65% was basically 100% of the Atlantic Coast and Midwest, while the remainder of the market was in emerging energy markets in the West.Report

      • Avatar James Hanley says:

        Nob,

        I don’t know about that claim about having 100% of the Eastern market. I’ll have to look that up. But even if so, you’re still focused on pure market share, and ignoring what really matters, which is price and innovation. The existence of a monopoly only matters if it harms the consumer. In fact the lack of harm to consumers is an indication that any supposed monopoly itself doesn’t have confidence that it’s a monopoly, because it’s continuing to act competitively.* Standard Oil demonstrably benefitted consumers.

        *The ruling against Standard Oil is a marvel of logical perversity. It explicitly describes this competitive behavior, Standard’s continuing innovation, as anti-competitive because it helped Standard outcompete competitors.Report

      • Avatar LeeEsq says:

        James Hanley, the idea that a monopoly is only a problem if it harms consumers is fairly recent. It dates back to Robert Bork’s ideas concerning monopolies in the late 1970s. During the late 19th and early 20th century, harm to consumers was not the main reason many people hated monopolies and trusts like Standard Oil. As expressed in my link, monopolies were hated because of the barriers of entry that they created and the concentration of economic power in one organization. Harm to consumers was not a major cause of concern.Report

      • Avatar Chris says:

        It’s a mistake to treat pretty much any government action in the market from the late 19th or early 20th centuries as having anything to do with consumers whatsoever. Workers, yes, to an extent, but mostly it was about businesses.Report

      • Nob Akimoto Nob Akimoto says:

        The existence of a monopoly only matters if it harms the consumer. In fact the lack of harm to consumers is an indication that any supposed monopoly itself doesn’t have confidence that it’s a monopoly, because it’s continuing to act competitively.* Standard Oil demonstrably benefitted consumers.

        Your final sentence needs a qualifier: “Compared to what”.

        It kind of feels like there’s a reverse Nirvana fallacy here. You’re positing that the consumer benefit would not exist absent Standard Oil’s existence. Is this necessarily true?

        It’s possible (in fact it might be LIKELY) that in immature markets that are part of a larger industry chain that includes high fixed costs and extremely low marginal cost structures that a firm can simultaneously take monopolistic pricing practices but also manage to reduce consumer costs in the process. This is particularly true since most markets that are emerging (and have high fixed costs) aren’t going to start at a state of production maximization to begin with. As they’re not at the limit of their production possibilities curve, they can still produce Pareto superior outcomes.Report

      • Nob Akimoto Nob Akimoto says:

        The reason there was as much outrage in the early 20th century was due more to the monopsony buyer power of Standard Oil regarding midstream services (like railroads) and their purchase of Oil Region crude oil. The primary basis on which Standard Oil operated was refineries: They controlled most of the refining capability, and that combined with their expansion into production gave them a lot of leverage to deal with competitors. They could push costs down on producers in the Oil Regions while making it hard for them to sell anywhere else through exclusive railroad deals.

        That said, I don’t think any of this justifies how the Sherman Act case went. Vertical integration’s always been a tricky thing to deal with, and it’s clear by the success of the Seven Sisters that they only lost market power once the crude reserves they were using was expropriated by national governments.Report

      • Avatar James Hanley says:

        @leeesq
        the idea that a monopoly is only a problem if it harms consumers is fairly recent. It dates back to Robert Bork’s ideas concerning monopolies in the late 1970s.

        No, the idea is a very old one. Bork just brought some long-established economic knowledge to a legal profession that did not know of it. (As did Posner and Tullock, among others.)Report

      • Avatar James Hanley says:

        Come on, Nob, you’re being disingenuous. I think we can agree that the oil market would have developed along the lines it did anyway while recognizing that Standard Oil sped up that development considerably. It made the inevitable happen more quickly, and we can know that in large part by the fact that the outrage was directed at its disruption of the established order. Without that disruption, the change evolves more slowly, or someone else creates the disruption, but later. But there’s no serious argument that compared to the status quo ante consumers not only were not harmed, but benefitted.Report

      • Nob Akimoto Nob Akimoto says:

        I don’t disagree that consumers benefited, and I’ve said as much. I’m also dubious that breaking up Standard Oil made any appreciable improvement to consumer well being. But I also think that comparing the status quo ante to what happened to that status quo via disruption is setting a really low bar for “better”.

        Again, immature industries almost always have the slack to produce pareto superior outcomes. The question is what happens after it matures.Report

      • Avatar James Hanley says:

        I also think that comparing the status quo ante to what happened to that status quo via disruption is setting a really low bar for “better”.

        It’s not the end of analysis, but it’s where you have to begin. Unless you want to totally throw out the concept of marginalism, right? You begin by comparing the value of some new possibility to the status quo ante. If it’s inferior, you chuck the possibility out the window and forget about it. If and only if it’s positive do you proceed to an opportunities cost analysis comparing that possibility to other possibilities. And even if you screw up that analysis and miss out on an even better alternative, so that you stick with your suboptimal first possibility, you’ve still improved your lot.Report

      • Avatar James Hanley says:

        Again, immature industries almost always have the slack to produce pareto superior outcomes. The question is what happens after it matures.

        Sure, but who’s arguing against that here?Report

      • Nob Akimoto Nob Akimoto says:

        It seemed like you were contesting whether or not natural monopoly prone industries need intervention or not. If you weren’t, I apologize.Report

      • Avatar Jim Heffman says:

        On the one hand, Bell Telephone had Bell Labs.

        On the other hand, (so the story goes) Bell Telephone invented the answering machine in the 1930s but refused to market it because they wanted people to have to call back (and incur usage fees for making the calls) instead of leaving messages.Report

      • Avatar Michael Cain says:

        Didn’t ever hear the one about the answering machine when I worked at the Labs. OTOH, at one point the Labs wanted to make touch-tone dialing the standard for basic service and give everyone who still had rotary dial a new phone. The electronics for touch-tone had gotten cheap enough that the costs of the phones would be recovered over a very few years in network savings. AT&T Legal squashed that one out of fear that the FCC or states would decide it should have been done years earlier and demand billions of dollars in refunds.Report

      • Avatar James Hanley says:

        It seemed like you were contesting whether or not natural monopoly prone industries need intervention or not.

        Oh, no. I didn’t realize I was giving that impression.Report

      • Avatar ScarletNumbers says:

        @michael-cain

        The electronics for touch-tone had gotten cheap enough

        Ironically, we used to have to pay extra for touch-tone, since it was considered an improvement for the consumer.

        BTW, I loved you in Blame It on Rio.Report

      • Avatar Michael Cain says:

        @scarletnumbers
        Exactly. When introduced, touch-tone was expensive to provide and there was an add-on charge billed. It was sold as a convenience/status-symbol to the wealthy and as a productivity improver to certain kinds of businesses (if your business made lots of short calls each day, saving a few seconds on each number dialed adds up). Historical tangent: area codes were originally assigned so that those that required the fewest dial-pulses were assigned to the places that were called most often. So NYC got 212, LA got 213, Chicago got 312, etc.Report

    • Avatar Badtux says:

      Touch tone was only expensive to provide on mechanical step-by-step or crossbar switches because a tone-to-pulse translator had to be placed on the incoming lines that had touch-tone service (the pulses actually moved crossbars or toggled relays on those electro-mechanical switching systems). Once Ma Bell deployed 1ESS or later electronic switches throughout the network by the mid 70’s, touch-tone was zero cost to provide — the switches understood touch-tone implicitly, and in fact had to have hardware placed inline to filter out pulse dialing signals and convert pulse dialing to touch-tone in order to actually connect calls when a pulse-dial phone was attached. It would have been cheaper to provide tone dialing phones at the customer level and omit that pulse-to-tone hardware at the switch side, but scheduling that many service calls within a reasonable amount of time was beyond the capabilities of even Ma Bell. So instead they made tone dialing a “premium” service to avoid having to schedule all those service calls (remember, phones during Ma Bell’s heyday were typically *hardwired*, there was no such thing as a plug-in phone jack, so actually replacing the phone would require unscrewing the wires from the terminals on the back of the phone and screwing them into a new phone, i.e., a service visit, rather than just mailing everybody a new phone and telling them to plug it in).Report

  8. Avatar Bob S says:

    I recently quit ATT for Republic Wireless because I’ve wanted a smartphone with no data plan, and I’m very happy. I have no contract, a fine Moto-G smartphone that cost me $149 or thereabouts, and bills of $10/month (more like $12 with taxes) for unlimited voice and text and unlimited wifi data. A plan with 2 gigs or so of wireless data runs a nominal $25/month. I can switch plans twice per month with a couple clicks and they pro-rate the charges daily.

    Republic routes calls via wifi when it can, so it’s best suited to people with good wifi connectivity. When wifi is unavailable it uses Sprint or someone. Call quality on wifi has generally been good, in my experience.Report

  9. Avatar Road Scholar says:

    I’m actually fairly happy with Verizon. I’m like that guy doing the “Can you hear me now?” thing, wandering all over hell and back like I do. It’s only very rarely that I have no signal or a roaming indicator.

    The customer service hasn’t really sucked too bad either. I got a text message from them once saying I had gone over my data plan allowance, but when I called they let me bump up to the next level for ten bucks more per month and made it retroactive so no overage charge.

    My one irritation can probably be chalked up to excessive expectations. I started out several years ago on Alltel because at the time they had the best rural coverage. I also had a plan with them that included unlimited data. Mind you, this was before smartphones so data was mostly email and whatever else a not-quite-smart phone could do. Then Verizon bought out Alltel (hence their superior interstate rural coverage) and I was grandfathered in with my existing plan. Then I traded up to a 3g smartphone and they still let me keep my old plan, which was cool but 3g isn’t really fast enough for decent video beyond low-res youtube. Then 4g comes out and I’m thinking I can get a new phone with a bigger screen and watch Netflix on the road (well, parked anyway). Yay!

    Wait… not yay. Now I’m not being allowed to stay on my good old all-you-can-eat Alltel grandfathered thingy plan. Instead, now voice and texting are unlimited but data is limited to 2 gigs/month which I can bump up at $10/2 gigs/month increments. Well streaming video chews through data like a hungry, hungry hippo so… so much for Netflix on the road.

    I can’t say I don’t understand why they done what they done, but all this adverteasing showing happy, smiling people watching video on their cool new phones is pretty damned deceptive unless you really like very big cell bills.Report

  10. Avatar Damon says:

    It’s been my experience that “continuing service”, ie you are getting what you wanted and paying for it, is fine with big companies. It’s when things change: you change your service, move, etc. that things tend to get screwy. I’ve had trouble with Comcast and Verizon due to this. Once it eventually gets sorted out, things go back to “normal”.Report

    • Avatar Mike Schilling says:

      They do have an awful lot of customers to keep track of, and the pencilled scrawls on those 3×5 cards fade as they’re passed from hand to hand or shot through the pneumatic tubes. If only there were some kind of machine that could help them keep track of and process the changes.Report

      • Avatar Damon says:

        In all fairness,
        You’re not dealing with rocket scientists.
        They have to follow a “proceedure” and they can’t deviate.
        CS has little power. Any errors in billing seem to take coders to fix.

        I had an issue with the wrong state taxes being applied to my cell phone bill. The CS guy could correct the error so bills got the correct tax rates applied but couldn’t give me a credit for my payments of taxes higher than the correct amount because “the taxes are calculated automatically by “the system.” When I told him that I DO THIS TYPE OF WORK MYSELF and that someone will have take my old bills and run dummy bills through the system with the correct taxes and then manually calculate the differences in taxes (that being my refund) he had a bit of trouble. I told him that I figured the credit was at least 25 dollars. Guess what showed up as a credit to my bill the following month…..easier to do the 25 dollar credit than the work to calcuate it correctly. I probably left another 10-20 bucks on the table….Report

  11. Avatar Brandon Berg says:

    Well, they might take solace in the various subsidies their lobbyists help secure from the government, such as the $14.5 billion in tax subsidies they were awarded between 2008 and 2010

    Hold on a second. Unless I’m misreading this article, those “tax subsidies” are just accelerated depreciation, which merely defers taxes. Moreover, it’s not like the old depreciation schedule was dictated by God on Mount Sinai, so it’s not obvious that it was even more appropriate than the accelerated schedule. Finally, I believe that the accelerated depreciation schedule was made available to all businesses in order to encourage countercyclical investment, and not some special favor to a few well-connected companies.

    The way you’re describing it, it sounds like the government just up and gave them $14.5 billion. Unless I’m seriously mistaken, that’s not even close to being true.Report

    • Avatar Mike Schilling says:

      Then the problem isn’t rent-seeking; it is the result of the unfettered free market. Thanks for the corroboration.Report

      • Avatar Brandon Berg says:

        Having dealt with the government, that strikes me as implausible. “Good customer service doesn’t scale well” seems more likely.Report

      • Avatar Patrick says:

        @brandon-berg

        “Good customer service doesn’t scale well” seems more likely.

        This is a cogent observation, but the underlying reason why customer service doesn’t scale well isn’t as much a question of scaling on size, per se, iff’n you ask me.

        The bigger the organization gets, the more likely it is that you’ll decouple the service sector of the organization from the sales, marketing, and/or core competency of the organization.

        The more decoupled service is from primary operations, the shittier it gets, because all of the direct incentives to get it correct fall away rapidly.

        This is particularly relevant for companies that provide, primarily, products… but it’s also a relevant problem for large governments (where the service sector for certain services is utterly decoupled from the revenue stream entirely, such as your local permit office, which has very little internal revenue stream and is largely supported by tax revenue)…

        … and it’s always, always, always a possible problem with IT. Because IT typically is about supporting what other people do, not doing revenue-enhancing-things directly, so measuring value is really hard.Report

  12. Avatar Wagon says:

    I am a pretty right-leaning libertarian-ish guy on most economic issues, but I am increasingly of the opinion that wireless providers and ISP’s should be regulated and handled like other utilities deemed a ubiquitous and necessary part of life in this country. I really think they are more and more every day becoming part of the roads and power lines category of services that it is necessary for government to step in and, if not outright manage, then at least heavily regulate. I do not know enough about the business facts to work out the implications that would have or any details. I’m basically just acknowledging that these services are so ubiquitous and necessary to life and work for most that we can’t allow abuse of the type that is so obviously occurring. We are doing something wrong when we Americans pay more for less bandwidth than most European nations.Report

    • Avatar Damon says:

      Frankly, I’d like to see MORE providers. I have the following choices in my “area”:

      1 Satellite provider
      Verizion FIOS
      Comcast.

      FIOS isn’t available in my area. To my knowledge, Satellite can’t provide broadband service, nor provide VPN support. So that leaves Comcast. That’s no competition. That’s a monopoly. We degregulated power-separating the power generation from the power delivery functions, we can do the same with broadband, cable tv, etc.Report

  13. Avatar Barry says:

    Glyph
    “Not only comment-rescued, but I’d also like to see the ‘net neutrality’ section expanded and clear parallels drawn, as it’s both A.) Something that’s been under-covered here, IMO and B.) Something that’s still young, so there’s theoretically still a chance to get it right, unlike the hash we’ve apparently made with telecoms.”

    John Oliver gave an excellent 5-minute and highly entertaining presentation on it.Report

  14. Avatar Barry says:

    Citizen: “I am suprised the CSR didn’t give a sincere “systems fubar” apology with the $50 give-it. Did they ever transfer you to a customer retainment department?”

    That’s a good one. I’ve had problems with Comcast, ATT and Verizon, and not a one of them would know what ‘customer retention’ means (except as something the little guys have to do). If they did set up a ‘customer retention’, it would consist of somebody who robo-calls existing customers every hour to tell them that the company values their business 🙂Report

  15. Avatar Barry says:

    dhex: “that said calling them is an exercise in annoyance and the co-branding they have for affiliated resellers feels like a sticky trap.”

    I once called somebody for customer service (after taking the usual steps – going to the bathroom, removing breakable items from arm’s reach, taking a tranquilizer,….).

    A human answered after two rings.

    I couldn’t speak coherently for 10 seconds, I was so surprised.Report