The cell phone has revolutionized the way we communicate, letting us make and receive calls virtually anywhere at any time. More than 200 million Americans, from adults to teens and even younger children, currently have cell phones. But people are no longer simply using this wireless technology to talk to friends and family. Today, wireless devices let us surf the Internet, share photos, and even send high speed emails across the globe.
Despite the evolution of cell phones into more sophisticated communications tools, consumers still face the "cell hell" of confusing bills, one-sided contracts, and lousy coverage. Consumers remain concerned about dropped calls and whether dialing 911 on your cell phone will get you the emergency operator when you need it most.
From Monopoly to Open Phone Markets
It used to be that one phone company –- AT&T –- ran almost the entire phone network. But AT&T was broken up over twenty years ago to foster competition. Today, competition is working for some services, but not others. While we have many choices for our telephones and answering machines and can pick our long distance providers based on price, there are dramatically fewer options when it comes to picking a local telephone service.
Policymakers promised consumers telecommunications competition would bring a wealth of choice in service offerings and price options. Instead, flawed regulatory polices and industry consolidation is leaving many consumers with fewer choices and poorer service.
Giant telephone corporations that sprung from the breakup of AT&T -- the so-called "Baby Bells" -- still serve more than 90% of local home phone lines in the U.S. Control of the telephone wire to most homes means they can also offer high speed Internet service or broadband over that same wire. Cable TV companies control the second important wire into millions of homes.
These two mega-industries are fighting each other to provide voice, Internet and video access to those who can afford to purchase multiple services.
Prices Rise and Universal Service is Threatened
Too often the news frames these issues as fights among corporate giants, forgetting that no matter who wins, it is the consumer who pays the bill. Consumers have seen their local phone bills increase due to new add-on fees and surcharges that shift more and more costs on to basic phone service. Rules that ensure high quality service and fair business practices have been slowly eroded.
Also at risk is the long-standing national goal of "universal service," which ensures that basic phone service connects all of America at affordable rates. While they fight each other for profits, the giant telecommunications companies are not fighting as hard to ensure that they connect rural, Native American, low-income and other underserved communities.
In late 2004, the FCC decided that state regulators are prohibited from subjecting companies offering telephone service over the Internet to the same regulations as other phone companies. Not surprisingly, the phone companies do not believe this is fair, and are fighting to get out from under similar pro-consumer regulations as well.