California Declares Free Market Broken, Recommends Price Controls For Phone Services

Verizon, AT&T, and their regulated cohorts love to blab how the “free market” and “competition” will keep prices low for consumers. According to California, it’s a big fat expensive lie. The cost of basic phone service has soared since the Public Utilities Commission lifted price controls in 2006, leading the agency to conclude:

“There is no indication of any change in the near future regarding the current state of competition. Market forces have not yet met the challenge of controlling price increases.”

Here are just a few of the ways competition has benefited consumers:

  • AT&T no longer lets you make five free 411 calls per month. Now it costs $1.50 for local numbers and $1.99 for all others.
  • Verizon won’t let you make four free 411 inquiries anymore. Now they charge $0.95 for local listings and $1.50 for all others.
  • AT&T boosted the price of daytime calls by 34%, evening calls by 93%, and nights and weekend calls by 233%
  • Call waiting is now 86% more expensive.
  • Keeping your name out of the phonebook now costs 346% more.

AT&T defended their thievery by cryptically uttering: “The marketplace changes and you have to change your offerings.” Ohhhh, sure, we see. These “marketplace changes” must really be hurting the poor telecoms.

In a recent briefing for investors, AT&T boasted that its average monthly revenue per primary household line “ramped steadily over the past several quarters,” to $60.16 in the first quarter of 2008 from $57.08 a year earlier.

So much for all that competition between Verizon, AT&T, Frontier, SureWest, Vonage, Skype, and others.

The telecoms have repeatedly proven that their version of the “free market” is a scam that harms consumers and enriches shareholders. California’s Public Utilities Commission has recommended the only reasonable measure: reinstating price controls.

Getting the 411 on phone charges [The Los Angeles Times]
(Photo: Getty)