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The Almighty Buck Businesses

Phone Companies Bill Public for Nonexistent Equipment 612

Srinivasan Ramakrishnan writes "Forbes has an eye-opening article on the scam that lets the Bells scoop $5 billion every year from the consumer with the sanction of the FCC. The FCC Line charge that appears on every phone bill is a vestige of a deal that was struck by the FCC with the Bells. The deal was touted by the FCC as a historic win that saved $3.2 Billion a year for the consumer - Forbes takes a closer look at the deal."
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Phone Companies Bill Public for Nonexistent Equipment

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  • by BrK ( 39585 ) on Friday April 25, 2003 @09:44AM (#5807706) Homepage
    Just this morning the wife and I were talking about canceling our VZ land-line (we both have VZW phones and a cable modem).

    This is just another reinforcing reason to do so. The only calls we really get on the land-line are telemarketers anyway, yet a basic line with callerid and a minimal LD plan is $38.00/month.

    The consumer/end-user in this country is really getting screwed by the government and various utility oligopolies.
  • by JjCale ( 555759 ) on Friday April 25, 2003 @09:46AM (#5807717)
    In Australia, Telstra has been hiking their line rentals [news.com.au] for the last three years. (although apparently the overall call costs are gong down).
  • I pay $20 a month (Score:4, Informative)

    by j1mmy ( 43634 ) on Friday April 25, 2003 @09:48AM (#5807729) Journal
    for a land line with no features (really just a dial tone), just so I can have DSL. It's a complete ripoff.
  • by Nick of NSTime ( 597712 ) on Friday April 25, 2003 @09:53AM (#5807758)
    I can't cut my landline for these reasons:

    1. I have digital satellite, which requires a telephone line
    2. My cell service (T-Mobile) is not reliable enough; what if I need to call 911?
    3. I have an alarm system that uses the phone line

    Those are just a few reasons why I can't cut my land line. I'm sure there are others in the same situation.

  • by chickens ( 626775 ) on Friday April 25, 2003 @09:59AM (#5807798)

    That sounds like pretty much the opposite of what's recently happened in the U.K. with the unbundling of the local loop. This measure was designed to allow smaller companies to compete with British Telecom more directly, giving them the opportunity to place their own equipment in BT's local exchanges.

    Not entirely sure how successful it's been though...

  • UK line charges (Score:4, Informative)

    by Radian ( 172121 ) on Friday April 25, 2003 @10:02AM (#5807820)
    In the UK we get charged for line rental (approx £10/month), and we pay for all calls - including local calls. It is my understanding that in the US local calls are free, so you are getting something for the rental charge.
  • by swb ( 14022 ) on Friday April 25, 2003 @10:04AM (#5807826)
    Phone company billing is just awful no matter how you slice it. I manage the phone system here, and unless you're an (ex-) Qwest employee there's no way you can understand the detailed billing associated with your phone service. The actual monthly phone bill I get from Qwest (or bills, some things they insist on billing seperately -- a RAS PRI has its primary trunk number billed on a seperate bill) looks like my home phone bill, with two extra digits. No service detail, nothing.

    When I took over the phone guy's responsibility when he quit, I asked the telco for a detailed customer record, and I got ~175 page report that detailed our services in a totally unintelligible report. Each DS0 from our four D1s took up about a page on the report, detailing every 10 cent tarrif that made up the price of each DS0, along with the other tarrifs associated with the DS1 itself. After looking at it I pretty much gave up and handed it over to our phone maintenance vendor who audited for me -- they employee two ex Qwest employees specifically for this purpose, since the codings and info aren't explained anywhere but in some Qwest internal documents.

    We ended up dropping a bunch of 1FB (telco slang for analog copper) circuits, CENTREX circuits and other stuff we weren't using. They were live on our demarc block, but not punched to anything.

    This isn't unusual, either -- the vague monthly invoicing and byzantine customer records lead to so many overbilled or unused service that there's an entire industry that does nothing but audit phone bills in exchange for a percentage of the savings.

    My experience with telcos leads me to believe that half of this is a monopolistic lack of desire for reform, government bureaucracy and overregulation, and excessive merger activity that's left them with dozens of computer systems that don't communicate without human intervention. I've been told by both Sprint and Qwest that they have systems so complex that there are few people there who can even *use* both of them, but data is required to be pulled/entered from both of them to get anything done.

    Unfortunately I don't see any hope for reform. You pretty much have to do business with them, and when business is good they give you what they want and waste the money on mergers and exec perks (Nacchio sucks!), and when business is bad (like now), they plead poverty and can't afford to fix this.

    I guess the only hope is that some of the CLECs can do better without becoming just like the ILECs, although I'd imagine the temptation is to become the ILECs, not improve on them.
  • by LordYUK ( 552359 ) <jeffwright821@@@gmail...com> on Friday April 25, 2003 @10:17AM (#5807908)
    The phone companies dont advertise this plan, but I know that Verizon, and possibly others, will sell you a dial tone with taxes for less than 10 a month. the catch? they charge you 35 cents for every call. Of course, if you're using it just for the DSL, then you incur no other charges. They were telling me it would be less than 10 a month when I was considering switching from cable to DSL.

    I'd ask your phone company about something similar, if you really want to ditch your land line.

    oh, and I live on the East Coast, in case you're wondering what market I'm in.
  • Re:cut the line! (Score:5, Informative)

    by Kombat ( 93720 ) <kevin@swanweddingphotography.com> on Friday April 25, 2003 @10:26AM (#5807966)

    When you get a telemarketing call on your cell, ask them their name, the company they're calling for, and their return phone number. They are legally required to give you all of this information, if you ask.

    Then, ask to speak to the person's manager/supervisor. Inform him/her that this is a cell phone. It is illegal for them to call cell phones. At this point, you've already got their information, so they can't just hang up and run. Inform them that you wish to recoup the cost of this call, and that you want them to send you a cheque for $100 USD. If they refuse, tell them you will take it up with the FCC, and the fine they will levy will be much, much more than that.

    Hey, it's worth a shot.
  • by Anonymous Coward on Friday April 25, 2003 @10:32AM (#5808013)
    all your wiring and switching is in the subways for one (great place to put it)

    2) The subway, bus, and taxi system rely heavily on the communications system to function, schedule and route

    You pay for everything up North through taxes and fees anyway ;)

  • by tomzyk ( 158497 ) on Friday April 25, 2003 @10:32AM (#5808015) Journal
    I just noticed this last night while looking at my SprintPCS cellphone bill. I noticed that over the past few months my bill has been steadily increasing. (It's only a few cents every month, but it still keeps climbing!) My last bill was $0.41 higher than the previous one!

    Now, they put the extra charge in the "Taxes and Federal Fines" (or whatever) section, and yet when I checked up on the explanation of these fees, it says something along the lines of "Eventhough we SAY that these are taxes, they really aren't. We're just making this tax/charge up because we're being forced into this number-portability thing..."

    Seriously. Is this legal to label it as a "tax" eventhough it isn't? Man, I'm starting to distrust any fee-based company because they keep raising charges. (I've been with DirectTV for only about 1.5 years and they've already raised my monthly fees by at least $6 and removed some of the channels in hopes that I'll just "upgrade" my package and pay more.)

    For those of you with SprintPCS, check your April bill.
  • The reason. (Score:5, Informative)

    by Catskul ( 323619 ) on Friday April 25, 2003 @10:34AM (#5808027) Homepage
    The US postal system has been separated from the teet. The reason it has been able to work well is that it receives acts in a vaccuum. I believe that it receives no money from the government, and keeps the profit within the system. Its like a giant non-profit company owned by the federal government. It does have its problems though. The regulation that it does have has caused problems. Just do a search on google for: united states postal service business model [google.ie]

    and if you are intrested in how the USPS is organized, look here. [usps.com]
  • Re:Amen to that (Score:3, Informative)

    by mbourgon ( 186257 ) on Friday April 25, 2003 @10:40AM (#5808074) Homepage
    Actually, go pulse. The only disadvantage is that you'd have to switch your phone back to tone for voice menus. It actually costs them _more_ these days to do pulse. So, if you're willing to give up a little of your time, you can screw them. (From what I remember, Tone allows them to packetize the dialing portion of the call, while pulse requires they leave the circuit open the whole time you're dialing. So that equipment now can be used less.)
  • Re:What do you use? (Score:2, Informative)

    by brakk ( 93385 ) on Friday April 25, 2003 @10:42AM (#5808088) Homepage
    I've seen cradles for cell phones that let you hook in an external antenna for better reception and then plugs into your house phone line so all your land phones go through your cell.

    You could get satalite service for your internet connection to get away from bell. As for cable, I use cox in oklahoma and they don't require you to have basic cable, but you get a $10/month discount if you do have it.

    You could also make a deal with one of your neighbors to install DSL on top of their land line and share the data line.
  • by Martin Blank ( 154261 ) on Friday April 25, 2003 @10:51AM (#5808158) Homepage Journal
    The USPS doesn't get a dime of taxpayer money. All of what they do is paid for through postage and other services. This is why they make their annual reports of profits and losses.

    Now if they could just let Amtrak do the same thing and stop throwing tax dollars at *that*...
  • by QwkHyenA ( 207573 ) on Friday April 25, 2003 @11:02AM (#5808260) Homepage
    Every single Pizza delivery company requires a landline (atleast in bad areas!) I got ride of my land line a few years ago only to find out that they won't deliver a pizza to a cell phone number!

    And it does make sense.

    *holdup man calls Domino's behind Walmart*
    Gunman: Umm..Yeah.
    Gunman: I'd like to order a pizza behind Walmart on 32nd street.
    Gunman: Tell him to delivery all his other orders first.
    Gunman: I'll just wait...

    So, as a programmer I REQUIRE a land line to get my nourishment! (and if you tip them well, after a while they deliver beer too!)

  • Re:cut the line! (Score:4, Informative)

    by Glonoinha ( 587375 ) on Friday April 25, 2003 @11:10AM (#5808320) Journal
    >Mobiles are about 10 times more expensive for national calls and 40 times more expensive for local calls.

    Say what? My plan gives me 1000 anytime coast-to-coast long distance included minutes per month for $39.95 plus taxes, about $45 a month total.

    That comes to four and a half cents a minute for long distance calls, local calls, or whatever calls, and I generally don't use all my minutes, but I get real close.

    My land line runs about $50 a month and I still have to pay 7 cents a minute for long distance. To make the same 1000 minutes worth of calls cost me an additional $70, so $50 + $70 for 1000 minutes long distance is 12 cents a minute, with local calls (amortized including the $50 fee just to have the phone) run 5 cents a minute.

    My local phone costs 20% more per minute on local calls, and 300% more for long distance calls, than my cell phone (assuming 1000 minutes total per month.)

    If I didn't need it for business and another line for the fax machine I would cut the golden cords to my land line.
  • by Fulcrum of Evil ( 560260 ) on Friday April 25, 2003 @12:07PM (#5808782)

    The last time we had a national local phone monopoly was a disaster. There was NO incentive to innovate. Features like caller id, 3-way calling, call-waiting, and ISDN could have happened YEARS AND YEARS before they came into prominence in the 90's, after we started getting at least a little competition.

    All that crap happens at a switch in the local office. We're just talking about nationalizing the wires in the ground and the actual building. BellX still owns all the stuff inside, and some newbie can come along and offer whichever services he likes.

  • by Martin Blank ( 154261 ) on Friday April 25, 2003 @01:41PM (#5809725) Homepage Journal
    Actually, they can't. The California Public Utility Commission sets limits on how high the rates can go, including between companies, and is aggressive in its audits. SBC is under one such audit right now which may result in a refund to California customers totaling several hundred million dollars.
  • by Maxwell'sSilverLART ( 596756 ) on Friday April 25, 2003 @03:32PM (#5810804) Homepage

    I had a similar experience with SBC. Last May (2002), I moved, and cancelled my service. Switched to Cox. Thought I was done dealing with the clowns. Imagine my surprise, then, to get a "Dear Deadbeat" letter from them in February. Yes, February. Called them about it, they said it was for transferring my service, and that it was billed in December. Well, that's a little more reasonable--only seven months, instead of nine. I called them, no help. Called their main office in Atlanta, no help.

    Coincidentally, they'd been telemarketing to me about once a week, despite my having told them to knock it off. Fed up, I tracked down the President for my state (Oklahoma), talked to her office, and told them I'd be suing them. Didn't just make vague legal threats, though--I cited title and section number, and read the first part of the filing papers, just to show that I wasn't blowing smoke. When they heard title and section, and particularly when I demonstrated that I had the papers in hand, filled out and ready to submit, thier entire attitude changed. For the first time in the month I'd been dealing with the problem, they took me seriously. The problem went away in about 24 hours: the calls stopped, and the charge was dropped.

    I would suggest a similar approach. Go down to the local courthouse and ask them for the paperwork to file a small-claims civil suit. Take them home, fill them out. Takes about five minutes--they're simple forms. Then call the executive offices and tell them that if they don't fix the problem, you'll sue, and make sure they understand that you're willing to do it--that's the reason for reading from the form. You'd be surprised how quickly their attitudes change. Lawsuits are an expensive proposition for them--even if they win, it costs them a buttload in legal fees. It is to their advantage to square things away out of court, particularly when they're wrong.

    Anyhow, that's my story and suggestion. If I can help you, feel free to drop me an e-mail at AT barefootclown.net. (I own the domain, so any local part comes to me, doesn't matter what you put there.) --Dave

  • by Kasmiur ( 464127 ) on Friday April 25, 2003 @03:35PM (#5810838)
    DSL can exist without a active phone service. Its called something like a Null phone line. Qwest is doing this every day in the phoenix metro area with thier Choice Tv/Online service. Its VDSL and there are plenty of customers there without a phone but with the VDSL working.
  • by BrainInAJar ( 584756 ) on Friday April 25, 2003 @08:14PM (#5812857)
    "has anyone noticed that Canadian DSL seems a whole lot nicer than American, but cable often is much increased in crappiness?"
    br. No. I haven't noticed that at all. My friends in my area that have DSL can download from a major ftp server (running on an OC line, etc) at about 50 or 60 k/s. I consistently get 75 - 150 on cable. it varies through the day, but usually varies in that range (4am i get 150, 8pm i get 75). The ads for DSL are correct out here. You get consistent speed. Unfortunately though, you get consistently bad speed. Not to mention that for dsl I would have to invest in a router, whereas with cable, I plug my cablemodem into a $20 hub, and put my computers on the other ports. I get DHCP addresses, but I've had the same IP for almost a year now (enough that I can even register a domain name), try saying that about DSL.

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