Well worth reading.
defending the right to innovate
Monopoly corrupts. Absolute monopoly corrupts absolutely.
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There's a great article in the NYT's Business section today by David Pogue on the various monopolistic practices of the cell phone industry. These range from the hidden subsidization of phone purchases, to double billing practices, to the fact that Verizon typically rakes in over $800 million each year by making customers waste 15 seconds listening to voice mail recording or retrieval instructions!
Well worth reading.
Excellent article by David.
First, it points to something that our media seems to have lost touch with when reporting on technology, abusive company practices. I hope that more reporters will take an aggressive look at industry/company practices. Second, it points to how corrrupt an unfettered free market can become. The usual response by many is not to buy from the company. While that is the correct solution, I have significant reservations that this would actually cause a company to meaningfully change. Talk is cheap and there is always a new angle for cheating the customer. An obvious example is Sprint, which has been loosing customers for many years and, based on what I have been reading, still has abysmal customer service and the company is still in business. The fact that the market has not caused these companies to become reputable (to me anyway), which implies the need for regulation. (We essentially have a lawless frontier town, time for a sheriff to clean things up. Also I wonder with some companies, whether management even cares if the company survives, since they get paid even if the company goes bankrupt.)
Third, time for my "Sprint Bad" comment. Sprint was subject to a class action lawsuit for "improper" billing practices. As is typical of class action lawsuits, the settlement agreement was only for a credit off of future bills. Since we had dropped Sprint by that time we were not eligible for a refund!
[Comment at 07/24/2009 05:54 AM by Steve R.]
I've been reading the responses by the public to David's article. In my second comment above, I mention how corrupt, and unfettered free market can become. The public comments also raise the specter of another market failure with an unfettered free market, innovation.
Magnoliabell writes: "Bravo! Bravo! Bravo! Thank you so much for writing this up. I thought I was the only one who thought the cell phone companies were bilking the living daylights out of Americans. In Europe, the fees are much more sensible. You know, Europe is fast out-distancing America in technology. Why? Because it is cheaper over here. America r&d's it. Europe imports it and puts it to use at a reasonable cost that the average citizen can afford. When is Congress going to get wise and protect the average citizen in America??? Consumer protection in the USA is a joke."
Also please see Why Japan's Cellphones Haven't Gone Global for the comments I have, or here at the NY Times. As a brief summary R writes: "Japan has amazing innovations, but I don't expect to see them over here anytime soon."
An unfettered free market is not a right to steal and pillage, freedom also means responsibility. It is time for the cell phone (actually all) industry to act responsibly and in an ethical manner. If an industry is unwillingly to clean-up its mess, then regulate.
[Comment at 07/24/2009 06:46 AM by Steve R.]
In my country, cellphone providers are not at all operating on an unfettered free market. For example, the state grants the monopoly to frequencies to a couple of providers as if the state owned "the air".
[Comment at 07/25/2009 07:13 AM by Samuel Hora]
@ Samuel Hora. I would be interested in knowing more about your perception of how American cellphone service compares to other countries.
Here the radio spectrum does belong to the government. The Government then leases it to the phone companies.
[Comment at 07/25/2009 02:07 PM by Steve R.]
Second, it points to how corrrupt an unfettered free market can become.
What "unfettered free market" are you referring to? The cell phone industry is rife with regulation and tax kickbacks. Just check your monthly cell phone bill to see how your pocket is being picked.
Anyone who thinks the cell phone industry, or any other industry for that matter, is a free market, hasn't bothered to read the fine print, literally (in the case of the phone industry) as well as figuratively.
Can anyone think of one industry in the U.S. that isn't regulated beyond ordinary civil law, which is all a market needs to operate? Maybe the shoeshine industry, although even the profits from that are taxed, and shoe shine stands have to operate on real estate that is taxed, zoned, and regulated in a myriad of other ways.
Oh, by the way, as far as I'm aware, land line phone taxes are still being used to pay off the Spanish American War. Good thing it wasn't as expensive as the Iraq War.
[Comment at 07/25/2009 05:46 PM by Bill Stepp]
It's a tangled web. Guilt on both sides. Abusive companies deserve the same exposure as ridiculous government regulations.
Regulations don't make phone companies develop "innovative" abusive practices. It is the management of those companies who use their FREE WILL to implement those abusive practices. If these companies had any respect for the customer they are also free to stop those abuses. It's time for companies to accept responsibility for the management actions that they can control.
David wrote: "And here's the part you can legitimately get angry about. If your monthly fee includes payment for the phone itself, how come that monthly bill doesn't suddenly drop in the month when you've finished paying off that handset?" Well?
David wrote: "Or if I want to call phone to phone (instead of computer to computer), I can sign up for Google Voice or Skype Out, where I'll pay 2 cents a minute to call China. Why, then, am I still billed an astonishing $1.50 to $5 a minute to call these countries from my cellphone?" Well?
Management has the freedom to fix these issues.
Feds cut off phone tax after 108 years. Which, is a legitimate example of how hard it is to shake-off what became an unjustifed regulatory burden.
[Comment at 07/25/2009 07:39 PM by Steve R.]
Steve R.: I don't know, I assumed it's the same as here, just as you said - the state usurping the "radio spectrum" and granting cell providers the monopoly to use it.
[Comment at 07/28/2009 12:11 PM by Samuel Hora]
I think that it is rather professional resume controversial question.
[Comment at 11/05/2010 11:04 AM by Melany]
I'll take that as a "no". :(
[Comment at 12/08/2010 06:54 AM by Quieter]
David, it is great article!
[Comment at 12/28/2010 09:17 AM by resume writing]
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