Telecom Companies Strangle The Economy In Rural Areas

“Unless you become more watchful in your states and check the spirit of monopoly and thirst for exclusive privileges you will in the end find that… the control over your dearest interests has passed into the hands of these corporations.” ~ Andrew Jackson

We keep hearing that government and regulations are the problem with everything and smaller government is the answer to every problem, but I disagree.  I can think of a lot of areas where we need government regulation to stand between us and the robber barons, but I’m going to focus on one in this article.

Telecom monopolies are strangling the economy in rural areas and I will explain how.  Let’s start there with our debate on regulations because we definitely need some new rules and enforcement with these telecom monsters like AT&T.  Our president, with the help of Susan Crawford, is trying to address this so let’s hope they are successful.

We all know that one of the biggest growth sectors in our economy is home-based internet businesses, because frankly until they bring back good-paying manufacturing jobs people can at least get a piece of the pie by selling the junk made overseas.  However, the rural areas are cut out of this economic sector because the telecom monopolies are providing such bad service at such high prices they can’t function.  I’m just trying to get my degree online and my internet service won’t even support going to a text-based website consistently.

The only usable, affordable internet I’ve seen for a while is provided by cable companies.  Time Warner, Comcast, NPG and Charter all give great, reliable internet access for a reasonable fee, but unfortunately they aren’t serving the rural areas.

I know many–if not all of you–remember the days before the Clinton Administration when you didn’t even call your family 11 miles away unless it was an emergency because it was a dollar a minute or more.  Then came deregulation that brought about intense competition which is the regulator of the free market.  All of a sudden we could get unlimited long distance phones and internet for a song.  I had DSL through Southwestern Bell (“ma bell”) for about $20 a month and when I ran a broadband speed test I was getting the equivalent of a T1 dedicated line…blazing speed…and it was all the time, not just when nobody was on in the middle of the night.

But at that point we had over 9,000 ISP providers competing for your business.  Then we had Bush and his cronies running the FCC and other government agencies. They started gobbling up the competition and there was no one to stop them.  AT&T has become a monster that needs to be broken up again.  Yes, AT&T is the old “Ma Bell” monopoly resurrected under a new name.

They certainly aren’t the only one since Verizon is a big player too and there are a few others in the game.  I have a friend who works for telecom in St. Louis and she’s worked for 6 different companies now without changing jobs.  The one she is working for now is Verizon.
AT&T (ma bell) waxed fat.  Last year AT&T tried to buy T-Mobile and was turned down by the FCC (because we now have some sane government) but that was only keeping the problem from getting worse, not fixing it.  They have to be broken up because they were already a monster.

I came back to the same town six years later and this is what we have.  The friend I’m staying with is paying $19.95 for 3 mb but she never actually gets 3 mb.  On a good day she’s lucky to get 2.4 mb and AT&T says that’s “within range.”  It might be within their acceptable range but as far as I’m concerned if you’re paying for DSL with 3 mb you should get 3 mb.  To make it even worse, for 3 days we can’t seem to get more than .4 mb…yes I said .4…less than half of one mb.  It was so bad it took me 15 minutes to run a broadband speed test.  Just as a comparison you can get up to 5 mb on satellite or Wi-Fi.  They need to stop calling that DSL and selling it as “high speed broadband” because it virtually unusable.  I was just on hold with AT&T tech service for an hour before I gave up and hung up.

Here’s how AT&T gets people to accept that nonsense.  New customers are charged a $400 deposit up front just to get service.  Then they give you back $5 a month on each bill and if you haven’t been late for a year they give you the balance back.  Of course, that means once you see they didn’t actually sell you 3 mb but “up to” 3 mb which means anything from 0-2.4 mb you’re stuck with that crappy internet for a year or give them $400 for nothing.  The “up to” is what you have to watch because that means they aren’t promising anything.

I can actually get better internet tethering through my U.S. Cellular telephone and using the phone as a modem.  But here’s the really cute part.  When they have to give you back the balance of your $400 they double the price for that 3 mb that isn’t even 3 mb because you had a special introductory offer for the screwing AT&T just gave you.  And they’re going to do it again because you’re so frustrated with unusable internet, and you really have no other option, you’re going to give them two or three times as much money for 8 mb which will probably only be 0-5 mb or so.

Now that you know what they’re doing I’ll take a minute to explain why I think this is happening.  Telecom companies are saying it’s because they can’t compete with cable companies and are refusing to upgrade equipment.  But I say it’s because they refuse to compete and don’t have to because they have a monopoly in rural areas.  They don’t care if they get customers in urban areas because they are so many more people in the rural areas they can put it to because they have no options.  The only choice you have here is AT&T, Wi-Fi or Satellite such as Hughes net.

If you’ve been fortunate enough to live somewhere that you didn’t have to know what a broadband usage limit is be grateful for that and let me enlighten you.  With satellite or Wi-Fi that’s part of the calculation.

Broadband speed is about how fast you can pass information from and to the servers.  Broadband usage is a measurement of mass…how MUCH you’ve downloaded over a period of time.  With one satellite company I used it was 200 mb per day on a 30 day rotating cycle.  So if you had 3 days at the end with big usage that pushed you over they put you on restriction.  Restriction meant they kept billing you but cut your speed down so much you could barely get to email and it had to fall below 60% of the maximum before they restored your speed which could be weeks.

With Wi-Fi, they typically just use that as an excuse to bill you “overage charges.”  With U.S. Cellular it starts at 2 GB and when you go over that it’s $10 more for each GB you use.  If you have no concept of how much a GB is let me tell you it doesn’t take much to use 2 GB, especially if you use Facebook or play games.

So rural areas are being essentially held hostage by telecom monopolies such as AT&T and it has to stop.  If it isn’t even good enough for me to get my degree online it certainly won’t support a home-based business or a work from home job.  We do need regulation folks and we need it to be enforced.  Monopolies are the enemy of free enterprise because they cripple the competition that regulates the prices and the service.

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Author: Cheryl Creech

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