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American cable and broadband: A ripoff

A screen shot from the web site of Orange SA, a French telecom company

Periodically I check broadband costs in France, just to see how badly we have fallen behind in the United States. In France, you can get a package that includes Internet service, television, and telephone for 34.90 euros — about $45 — no contract required. For this money, you get up to 20 megabits download speed on your Internet connection, up to 100 television channels, and unlimited domestic and international calling on your telephone. Why is this?

Most Americans know very little about other countries and are conditioned to think that the United States is ahead of the rest of the world in technology. Nothing could be farther from the truth. In addition, Americans preach the virtues of competition, but we don’t practice what we preach. In France, rates are lower and service is better because of intense competition. In the United States, the rules are set by a Congress that is in the pockets of the big Telecom companies (not to mention the banks). Though the FCC is just now finally getting around to developing a national broadband policy, for the last 10 years nothing has happened except that the telecom corporations cooperated with government to exploit consumers and make the telecoms rich.

If Americans were better informed, I have no doubt that they’d be pretty angry. For 10 years they’ve been kicked around by the cable companies and telecoms. Everyone complains, but few realize that it didn’t have to be that way. Next time you hear someone use the words “business friendly,” ask them if that doesn’t translate to “friendly to the ripping off of the American population.”

By some odd irony, as I was researching French telecom costs this afternoon, my cell phone rang. It was Verizon, wondering why I haven’t “upgraded” my telephone. They want to give me a cheap new phone to get me to sign a two-year contract. Ha! I’ve never had a contract with Verizon, either on my cell phone or on my Internet service. These contracts are a major way that American telecoms prevent people from taking advantage of what little competition there is. I steadfastly refuse to sign a contract. And besides, why would I want a cheap, flashy phone when my three-year-old Motorola M800 works just fine. My Motorola phone is a serious phone with a serious antenna (hear that, iPhone?) that retailed for about $700, though I bought mine cheap on eBay. There’s no way I’d trade that phone for a new piece-of-junk phone (even if my Motorola M800 does weigh 10 pounds.)

Clearly Verizon is making a push right now to try to lure people into renewing their contracts. I’ve had several pieces of junk mail about that, and today there was the sales call. As the sales person gave me her pitch, I could hear a chorus of people in the background also making pitches. If Verizon is making a big push to lock people into contracts, what does that tell us?

It tells us that Verizon is expecting some kind of competition in the next two years that threatens to cut into their profits. Verizon has a gross profit margin of 60.18 percent. That’s predatory, and that’s what happens when corporations control a “business friendly” Congress and write their own regulations.

One Comment

  1. brother doc wrote:

    Just wanted to agree wholeheartedly with you. Most Europeans had cellphones long before they became standard in the USA. And you have pinpointed the cause for our high rates as well: ignorance and government greed. Once upon a time in America competition was actually legally protected–there was the Sherman Anti-Trust Act. It did not work perfectly of course–but no one in Washington seems to have heard of it lately. Competition is only to be found in Congresspersons scrambling for corporate dollars to buy their next election. It is a total farce that in America perhaps 50 out of 435 Congressional seats are anywhere near truly competitive. And now that Bush has packed the SCOTUS with corporate lackeys it will be a long time if ever before America has true democracy. Meanwhile we get nothing but anti-government tirades from Fox, etc., which are misdirected. There’s a lot wrong with government, true, but mostly it’s because it kowtows to the rich.
    Sorry for the rant–it’s a hot damn night, global warming is here in the NC mtns. and I still believe Gore had the election stolen from him in 2000….

    Saturday, July 24, 2010 at 9:24 pm | Permalink

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