Walk into a cell phone shop in any country on earth, and walk out with a phone and service for $40. Any country, except the U.S., that is. In the United States of America, using the major providers, you pay triple or quadruple the price of a phone on the world market for the privilege of being charged exorbitant fees for years under a contract. (In India 3G service is 3 to 4 cents a minute, while in the U.S. regular service is 10 to 50 cents a minute) Any hope for change died last month with Verizon and AT&T paying to keep any competition out of the huge FCC bandwidth auction. 

Around the world, phones are sold by manufacturers, and service is sold by providers. Phones take tiny interchangeable chips called Subscriber Identity Modules (SIM) making changing national location or provider with the same phone academic. In America the phones and service are almost always fixed to the provider companies with no removable chip, creating prime conditions for collusion and graft.

Step by step: You enter a Verizon store looking for a phone. You take the cheapest one, say a Samsung SCH-u340. With a two year contract they give you a low price of $39.95 for the phone, plus $40 a month for limited service.

Then they ask if you want insurance at $5 a month. You consider, and ask, “If the phone is $39.95 why would I pay $60 a year?” “Because the phone without a two year contract is over $200.” So you take the insurance, which lets you get a new phone for $50 if you break or lose the phone. All fine, except for the fact that the phone is only worth $35 new for the rest of the planet.

They sell you the phone above the global price, they get double the cost of the phone per year in ‘insurance’, and for those who do not take insurance, they compel you to pay six times the value of a phone if you break or lose the little cancer causing piece of cheap plastic.

AT&T and Verizon have terms so similar that to call it collusion is not strong enough. Price fixing and collusion have become so common in America since the ‘Republican Revolution’ of ’94 that there are few cases brought against trusts or deception. The weak cases that have been brought have only served to undermine the weak laws further, such as Microsoft software suits that go in circles to nowhere and Starbucks suits that were thrown out. Another example of the culture of price fixing would be Apple Computer, where if your hard drive fails, they will replace it and keep your old drive. If you want it back you have to pay $300 to Apple or $600 to a hard drive recovery company that Apple sends it to. (Do you think they get a kick back?) And, no one speaks of the ‘pay day loan’ shops, created by Republican mafia-funded legislation. The thirty companies which operate nation wide have terms so similar as to beggar belief. The poor are robbed by their predatory methods, and since the Democrats regained Congress, they have made not one peep about this shameful corruption, which they should have shut down in the ‘first 100 days’. (Noteworthy, however, are recently moves to limit annual interest that have popped up in two states.)

Americans pay far too much for third-rate service and phones. If you think the cheap pre-paid phone packages are a fair and viable option, you are right as long as you live in a major city where there is native service. (Vs. Verizon) Otherwise the costs and lack of function are not practical. That situation will remain with AT&T and Verizon’s recent bandwidth deal, and Americans will continue to be ripped off while rotting their brains with their mobile phones.

By Johnny Civil