How the FCC Can Make Itself Popular

In the not too distant future, the land-line telephone will go the way of the rotary dial telephone as well as the manual typewriter.  There is no doubt, cell phones have changed the way we live, but not always for the better.

10+ years ago, if someone walking down the street were talking to themselves, it would be safe to assume that the individual might need to see a mental health professional.  Today, people chat on trains and buses discussing the most intimate details of their lives within earshot of complete strangers.  In most cases, however, the conversations are fairly mundane.

While cell phones may have contributed to a decline in cigarette smoking (now one can do something with their hands other than light up or nurse a drink), they also have been shown to increase the number of car accidents.

Throughout the U.S., people can be seen driving their cars flipping through papers on the passenger’s seat as if peace in South Asia depended on it.  It is unlikely that Richard Holbrooke or Hillary Clinton is at the other end of all these calls.

Today, land-line service providers are searching for some means of survival. Those of us who grew up with stationary telephones (or even modular phones) are dying off.  Some service providers are trying to compete on the basis of price.  Hence, it is now possible to call anywhere in the States (and sometimes Canada) at a flat monthly rate.  It wasn’t so long ago that it cost a fair amount of change to make a long distance phone call within the same state.

All forms of telephones have to compete with e-mail, instant messaging and skype.  The land-line telephone has one important advantage over the cell phone: when someone makes a call the cost is born entirely by the person placing it.  The recipients may be bothered by having to answer ringing telephones, but they are not then forced to pay for the privilege to speak with someone they may not want to (including complete strangers, pollsters, telemarketers, etc.).

So why is it that both the caller and the recipient of a cell call is charged by their provider?  Accepting calls from abroad on one’s cell phone call be VERY expensive.  To make matters worse some telephone service providers have aggressive attitudes towards what constitutes a minute and have invented fees such as “roaming” charges.

Most people have busy lives.  Time is limited.  Balancing work (which due to technology is now 24/7) with family and hobbies, is demanding.  Most cell phone customers never bother to read their service contracts, much less their monthly statements.  Hence most are paying their bills and not writing their legislators.

Public choice theory explains why consumers do not organize to defend their interests.  The cost of organizing is high and the financial benefits may not appear to be worth the effort.  The cell phone companies, on the other hand have major incentives to receive payments both from callers and the call recipients — so-called rent seeking behavior.

So why has the FCC and Congress not stepped in?  Congresspersons are indeed busy debating national health and economic stimulus plans; the FCC has less of an excuse.

If the FCC’s members wanted to show the public that they are sensitive to the difficult economic times most consumers face, they might decide to act and establish a rule that only  callers can be charged for cell calls.  Voters should write the White House if the FCC fails to act.