5 ms·

Must be nice being in an industry where you can basically print money by levying completely arbitrary fees and nobody is willing to stop you (i.e. because you'v

Must be nice being in an industry where you can basically print money by levying completely arbitrary fees and nobody is willing to stop you (i.e. because you've already used those fees to pay off politicians in both political parties in all of the legislatures in the land).

harryh 8y ago
Aren't we talking about fees for cell phone service here? It's a robust market with quite a few major competitors. What does paying off politicians have to do with anything?
- Chris_Chambers 8y ago
  5 cents have been deposited into your account.
- Retric 8y ago
  Being able to advertise price X while billing price Y after locking someone into a 2 year contract.
  - lev99 8y ago
    Are 2 year contracts still common in cell phone plans? I've used att for years and never was presented with the option of signing a contract like that.
    - JoshGlazebrook 8y ago
      Technically they are gone. But now the popular option are device payment plans spread out over 2 years so it’s essentially a contract as if you were to cancel your device the remaining amount is due immediately. Another gotcha are how they discount $200 off a phone. The bill credits are applied over those 24 months so if you cancel early you don’t end up getting the full $200 off the total price.
  - harryh 8y ago
    Don't virtually all the major carriers routinely run deals where they make it extremely easy for you to buy out of a competitors contract? The lock in from these contracts is quite weak.
    - greglindahl 8y ago
      That's not a solution to bait-and-switch.
    - ovao 8y ago
      I’m a little troubled that consumers would have an expectation that they may have to rely on that as a result of arbitrary rate increases. Do the vast majority of consumers know about those opportunities? I’m definitely for consumers being wise about what they get themselves into, but I’m also of the opinion that a reasonable contract would preclude the addition of arbitrary fees. If I contract you to work for me at $80/hour, for example, I would not be particularly happy if you turned around and forced me to pay you $85, or be forced to pay some kind of fine.
      - mcny 8y ago
        I'm more troubled by spectrum "auctions" than by anything else. If it were up to me, I'd dig up the bones of whoever was in charge of this asinine decision and have them hanged, quartered, and drawn. Then, I would nullify existing contracts and return all their money. There has to be a better way than to grant a single company monopoly over the spectrum slice for a market.
        pas 8y ago
        Yes. Shared network, transparently operated by all the service providers. (See also: in response to a similar what to do comment - https://news.ycombinator.com/item?id=17417243 https://news.ycombinator.com/item?id=17417243 )
      - sanderjd 8y ago
        Yep. It's definitely the contract part of this that is wrong. A price change should trigger a no-penalty renegotiation of the contract.
  - chasil 8y ago
    I love Tracfone. It is a great pleasure to swap the Verizon card for AT&T when coverage requires it, with no change to my billing or rollover minutes/data. AT&T will not be charging me this fee. Let them try.
- meritt 8y ago
  It's the additional fees above and beyond the base service. Carriers don't have to advertise these, which makes it incredibly difficult for the average consumer to reasonably compare plans side-by-side. Consumers sign a multiyear contract at a "$100 unlimited" plan or whatever, only to find out it's not actually unlimited and there's all sorts of additional surcharges. And now they're locked into a contract. Competition doesn't really help much at this point. From 2011-2016 the FTC [1] and FCC [2] took significant action against mobile carriers for spurious charges, unadvertised fees, etc. These resulted in hundreds of millions in fines against the carriers and portions of that being returned to customers. The amount of enforcement by these regulatory authorities changes significantly over time due to shifting political winds. [1] https://www.ftc.gov/news-events/media-resources/mobile-technology/mobile-cramming https://www.ftc.gov/news-events/media-resources/mobile-techn... [2] https://www.fcc.gov/enforcement/orders/1849 https://www.fcc.gov/enforcement/orders/1849
  - briandear 8y ago
    Before you sign that contact, you are entitled to read it.
    - ovao 8y ago
      That’s a given. But I think we have to split the difference on this one and argue that these practices are deeply anti-consumer. If a contract is, in essence, an agreement that one party is free to do effectively anything, and that the other must simply pay whatever the other party demands, subject to change at any particular time, that is less of a contract than it is a pair of handcuffs and a ball gag.
    - jacquesm 8y ago
      Except of course that in that contract it does not spell out the surcharges that they add without you being any the wise until you receive your bill.
      - kevin_thibedeau 8y ago
        They reserve the right to alter the deal. Pray they don't alter it further.
- jklinger410 8y ago
  >It's a robust market with quite a few major competitors If 4 is what you consider quite a few.
  - tunap 8y ago
    The way the mega mergers are going down, "quite a few" will be 3 here soon.
- odorousrex 8y ago
  > It's a robust market with quite a few major competitors. 4. There are FOUR major competitors (AT&T, T-Mobile, Sprint, and Verizon) and this is soon to be 3, assuming the Sprint - T-mobile merger goes through. (Which it most likely will)
  - perl4ever 8y ago
    I have not found that T-Mobile has enough coverage to be useful. That is, a mile or two from the center of a city, there seemed to be no reception for me. I am skeptical that Sprint is any better based on what I've heard from others. And I think Verizon requires different phones, so I feel for practical purposes I am locked in to AT&T.
Karishma1234 8y ago
This is dumbing down the whole thing Sire. Why did ATT increased the fees by $1 and not $10 then ? Also you can literally chose from many many other telecom operators. I use T Mobile and my car has ATT. ATT is way better than TMobile for coverage may be the extra fees help them give better coverage ? (Also what is the alternative ? Trump controlled government servants to decide how much fee they can raise ? At that rate we will be like UK where you need a license to own a TV).
- pas 8y ago
  The question is simple economics, specifically game theory. What's the contract between the parties? Is it one sided, and allows arbitrary modifications by the service provider? (Check.) Is the telecoms market currently in a pathological (unhealthy) state, due to lack of sufficient number of competitors, due to gigantic barriers to entry, due to regulatory capture? (Check.) Infrastructure is typically something that benefits from standardization and economies of scale. The original network effect. Therefore it's very much a "natural monopoly". But combined with spectrum auctions, it's a proper state sanctioned monopoly, or in this case oligopoly. The solution is to separate the raw technical network operation from all the other shit, and make it a true common carrier. The hard problem is of course the network evolution (maintenance, tower allocation [add new or remove old, what kind of tower, where, when], backbone management [buy new fiber optic or sell old, or downgrade, what kind, from where to where, and when]), but this should be financed by the operators, and it could very well be operator contracted (when one operator feels they would benefit from a new tower, they would request that from the shared raw network provider, and pay for it). Of course, there could be incentives to help the roll out of new towers (so, let's say the operator that pays for it gets 1 year exclusive access on that tower), or that the operators must finance at least X new towers every year or pay a fine (but this must be formalized so they must spend X % of their revenue on extending the network to new customers, and at least Y% on upgrading the existing network), etc. Ultimately, it's a simple question, that leads to a hard problem, with very good approximate answers. We know this shit, it's the economics of a market of fungible service providers. It's the shit that got people Nobel-like prizes in Economics, because it's easy to model and show what's going on.
  - 8y ago

harryh 8y ago

Aren't we talking about fees for cell phone service here? It's a robust market with quite a few major competitors. What does paying off politicians have to do with anything?

Chris_Chambers 8y ago
5 cents have been deposited into your account.
Retric 8y ago
Being able to advertise price X while billing price Y after locking someone into a 2 year contract.
- lev99 8y ago
  Are 2 year contracts still common in cell phone plans? I've used att for years and never was presented with the option of signing a contract like that.
  - JoshGlazebrook 8y ago
    Technically they are gone. But now the popular option are device payment plans spread out over 2 years so it’s essentially a contract as if you were to cancel your device the remaining amount is due immediately. Another gotcha are how they discount $200 off a phone. The bill credits are applied over those 24 months so if you cancel early you don’t end up getting the full $200 off the total price.
- harryh 8y ago
  Don't virtually all the major carriers routinely run deals where they make it extremely easy for you to buy out of a competitors contract? The lock in from these contracts is quite weak.
  - greglindahl 8y ago
    That's not a solution to bait-and-switch.
  - ovao 8y ago
    I’m a little troubled that consumers would have an expectation that they may have to rely on that as a result of arbitrary rate increases. Do the vast majority of consumers know about those opportunities? I’m definitely for consumers being wise about what they get themselves into, but I’m also of the opinion that a reasonable contract would preclude the addition of arbitrary fees. If I contract you to work for me at $80/hour, for example, I would not be particularly happy if you turned around and forced me to pay you $85, or be forced to pay some kind of fine.
    - mcny 8y ago
      I'm more troubled by spectrum "auctions" than by anything else. If it were up to me, I'd dig up the bones of whoever was in charge of this asinine decision and have them hanged, quartered, and drawn. Then, I would nullify existing contracts and return all their money. There has to be a better way than to grant a single company monopoly over the spectrum slice for a market.
      - pas 8y ago
        Yes. Shared network, transparently operated by all the service providers. (See also: in response to a similar what to do comment - https://news.ycombinator.com/item?id=17417243 https://news.ycombinator.com/item?id=17417243 )
    - sanderjd 8y ago
      Yep. It's definitely the contract part of this that is wrong. A price change should trigger a no-penalty renegotiation of the contract.
- chasil 8y ago
  I love Tracfone. It is a great pleasure to swap the Verizon card for AT&T when coverage requires it, with no change to my billing or rollover minutes/data. AT&T will not be charging me this fee. Let them try.
meritt 8y ago
It's the additional fees above and beyond the base service. Carriers don't have to advertise these, which makes it incredibly difficult for the average consumer to reasonably compare plans side-by-side. Consumers sign a multiyear contract at a "$100 unlimited" plan or whatever, only to find out it's not actually unlimited and there's all sorts of additional surcharges. And now they're locked into a contract. Competition doesn't really help much at this point. From 2011-2016 the FTC [1] and FCC [2] took significant action against mobile carriers for spurious charges, unadvertised fees, etc. These resulted in hundreds of millions in fines against the carriers and portions of that being returned to customers. The amount of enforcement by these regulatory authorities changes significantly over time due to shifting political winds. [1] https://www.ftc.gov/news-events/media-resources/mobile-technology/mobile-cramming https://www.ftc.gov/news-events/media-resources/mobile-techn... [2] https://www.fcc.gov/enforcement/orders/1849 https://www.fcc.gov/enforcement/orders/1849
- briandear 8y ago
  Before you sign that contact, you are entitled to read it.
  - ovao 8y ago
    That’s a given. But I think we have to split the difference on this one and argue that these practices are deeply anti-consumer. If a contract is, in essence, an agreement that one party is free to do effectively anything, and that the other must simply pay whatever the other party demands, subject to change at any particular time, that is less of a contract than it is a pair of handcuffs and a ball gag.
  - jacquesm 8y ago
    Except of course that in that contract it does not spell out the surcharges that they add without you being any the wise until you receive your bill.
    - kevin_thibedeau 8y ago
      They reserve the right to alter the deal. Pray they don't alter it further.
jklinger410 8y ago
>It's a robust market with quite a few major competitors If 4 is what you consider quite a few.
- tunap 8y ago
  The way the mega mergers are going down, "quite a few" will be 3 here soon.
odorousrex 8y ago
> It's a robust market with quite a few major competitors. 4. There are FOUR major competitors (AT&T, T-Mobile, Sprint, and Verizon) and this is soon to be 3, assuming the Sprint - T-mobile merger goes through. (Which it most likely will)
- perl4ever 8y ago
  I have not found that T-Mobile has enough coverage to be useful. That is, a mile or two from the center of a city, there seemed to be no reception for me. I am skeptical that Sprint is any better based on what I've heard from others. And I think Verizon requires different phones, so I feel for practical purposes I am locked in to AT&T.

Karishma1234 8y ago

This is dumbing down the whole thing Sire. Why did ATT increased the fees by $1 and not $10 then ? Also you can literally chose from many many other telecom operators. I use T Mobile and my car has ATT. ATT is way better than TMobile for coverage may be the extra fees help them give better coverage ? (Also what is the alternative ? Trump controlled government servants to decide how much fee they can raise ? At that rate we will be like UK where you need a license to own a TV).

pas 8y ago
The question is simple economics, specifically game theory. What's the contract between the parties? Is it one sided, and allows arbitrary modifications by the service provider? (Check.) Is the telecoms market currently in a pathological (unhealthy) state, due to lack of sufficient number of competitors, due to gigantic barriers to entry, due to regulatory capture? (Check.) Infrastructure is typically something that benefits from standardization and economies of scale. The original network effect. Therefore it's very much a "natural monopoly". But combined with spectrum auctions, it's a proper state sanctioned monopoly, or in this case oligopoly. The solution is to separate the raw technical network operation from all the other shit, and make it a true common carrier. The hard problem is of course the network evolution (maintenance, tower allocation [add new or remove old, what kind of tower, where, when], backbone management [buy new fiber optic or sell old, or downgrade, what kind, from where to where, and when]), but this should be financed by the operators, and it could very well be operator contracted (when one operator feels they would benefit from a new tower, they would request that from the shared raw network provider, and pay for it). Of course, there could be incentives to help the roll out of new towers (so, let's say the operator that pays for it gets 1 year exclusive access on that tower), or that the operators must finance at least X new towers every year or pay a fine (but this must be formalized so they must spend X % of their revenue on extending the network to new customers, and at least Y% on upgrading the existing network), etc. Ultimately, it's a simple question, that leads to a hard problem, with very good approximate answers. We know this shit, it's the economics of a market of fungible service providers. It's the shit that got people Nobel-like prizes in Economics, because it's easy to model and show what's going on.
- 8y ago