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The Telephone Company: How a Virtual Monopoly Hurts Consumers

Updated on January 8, 2019
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Liz's advice on finance, credit, frugal living practices, & anything monetary is from the 'school of hard knocks,' research, & experience.

Phone Games

No matter the phone style, the providers all play the same games
No matter the phone style, the providers all play the same games

Telephone Service?

There is, for all practical purposes, just one, single gigantic telephone company available in this entire country! That would be AT&T and its various subsidiary companies, such as Southern Bell. Even if they have retained their locally-recognized names, AT&T owns most all of them. (The number not so owned is a dismally small number; essentially a statistical zero.)

This is surprising and shocking, because they were deemed to be a monopoly, and ordered by the Supreme Court to split themselves up many years ago.

For some reason known only to the slippery lawyers they keep on an in-house payroll, the order did not "hold." After a few years, they started once again buying up, merging with, and otherwise putting out of business, their competitors.

How Does This Hurt Customers?

Denial of choice in any free-enterprise system based upon competition is always harmful to the consumer. It prevents them from comparison shopping, because there are no other providers to which they can compare service and pricing options.

AT&T and its myriad of subsidiaries are, (despite games of semantics that may be played out in courtrooms across the nation), guilty of what amounts to price-fixing. The slippery corporate lawyers may try to pretty it up and make it sound benevolent, but, to any student of English, all it amounts to is double-speak and obfuscation.

The language of Legalese is so cluttered with contradictions hidden in clauses, sub-clauses, sections, chapters, numbered paragraphs and sub-paragraphs, each and every one filled with "whomsoever; except; third party; parties of the first part; unless; as deemed; to wit; shall; shall not; hereinafter referred to as; ..." ... and so forth, that it amounts to weaseling out of both the spirit and letter of the rules that should apply.

A pile of steaming pile of waste is just that: no matter whether you call it by it's vulgar common street name, or try to make it sound innocuous by giving it a scientific-sounding name such as "nitrogenous waste material."

Other Options?

As a result of this denial of choice, we are seeing ever more ads for all kinds of "magic devices" offering to provide "free" phone service by means of "VoIP," (Voice over Internet Protocol) systems.

Simple. Just hook it up to your computer, and you can call anywhere for free. Hold the phone! It is not free! Nothing is free! You still must have an Internet connection, and that means an Internet service provider (ISP), for which you will pay a monthly fee. Guess who provides a fair share of ISP services? Bingo! There's that telephone giant again!

Sure, you may not have an actual telephone bill, but then again, you very well might. That ISP may be tied into your telephone service, and without paying that telephone corporation for the land line, over which your computer connects to the Internet, you would not be able to use that swell little gizmo.

To be sure, landline phones these days are getting rare; it's all about wireless connectivity via cell phones and their repeater towers. All the same, the phone company is involved.

(And, if you have cable TV service, you are paying another corporate giant for the same things, since it has long been possible to have multiple types of service with your cable subscription.)

Avoidance by Internet?

Maybe, if you have cable connection to the Internet, you'd escape. No, not really! That big bad old monopolistic telephone giant now also has its tentacles into cable systems as well.

Even if you have an ISP (Internet Service Provider) that is independent of the phone company (and are not using a cable-subscription service) such as one we used to have, we were still dependent upon the phone company for our Internet Service.

Why is that? It's because the phone company has a monopoly on the telephone lines. Any other independent ISPs, who do not have their own phone lines, have no choice but to piggyback onto the phone lines already in place.

This is a problem because, even though the government has forced the phone company to allow such access, they are not required to offer access to their best and most modern equipment.

Therefore, slower speeds and other annoying issues were and are common. At times, it was only marginally better than having an old-fashioned dial-up modem, instead of the ADSL to which we had also subscribed. We gave up this service, in disgust.

We've now subscribed to cable, and have bundled TV/Internet/Phone service through them.

(That doesn't mean they are entirely innocent of these practices, either, however; we're still dealing with another corporate giant; the 'bundling' issue remains!)

Truth In Advertising?

Hope springs eternal. There are truth in advertising laws. The problem is, they are either:

  1. written without any "teeth," for proper enforcement, or,
  2. the government is exceedingly lax in enforcing the laws, or,
  3. there are insufficient personnel hired to keep up with all the false claims (which is related to point 2.), or,
  4. they are routinely ignored, circumvented, and scoffed at, or
  5. All of the above!

Anyone interested in buying a bridge? I have several in my inventory. Sure I do!

When you sign up for telephone service, you are quoted a per-month cost for the services you have chosen. Unfortunately, that is not the whole story. They very carefully omit telling you about all of the assorted surcharges, taxes and fees that will be added on to those charges, also monthly.

These extra charges add about half again the original quoted charges. In the case of cell phones, these added charges nearly double the quoted monthly rate.

Another point: that great big corporate giant I mentioned by name earlier? They have a huge share of the cell phone market, and have gotten there by buying up smaller companies.

We used to have cell phones. We hated that big giant, and deliberately searched out a smaller, independent. We found Cingular. They were good.

Guess what happened? AT&T bought them out/took them over/eliminated the smaller company, so we ended up with exactly the same old company with which we did not want to do business in the first place!!

Our revenge? We got rid of our cell phones!

What About Your Phone Bill?

Phone bills, like other utilities, are skyrocketing. We called to try and get ours reduced.

It was pointless. The phone company seems to have taken a page from the cable and satellite TV systems' playbooks, offering "package deals."

Supposedly, you get all the cool stuff for a cheaper price. Well, it's not so cheap. Our phone service had gone up to about $60. per month for the items we wanted to use.

For one thing, we used the phone company's answering service, as we got tired of answering machines breaking down/wearing out on about a 3-year cycle. In the end, it worked out cheaper to subscribe to the phone company's "message center." Next, as we had elderly family 3 hours away, we needed unlimited long distance.

That's all. Just two simple things. But, could we get those? No. It was "cheaper" to 'bundle' those services with other things we didn't want, such as call waiting, conference calling and call forwarding.

You Might As Well Do This!


Money Down the Drain

When I called to find out about getting just the services we needed, it was going to cost me more than the rate we were then paying, for fewer services. The fact that we also qualified for the California "lifeline" rate did not make any difference to that quote.

Instead of saving me money, then, they wanted to charge more for less, leaving us stuck with a monthly bill that was higher than we could really afford. Where's the logic, truth, or fairness in that?

This "bundling" trend is pure unadulterated nonsense. With the current technology, they do not have to come out to your house to initiate these various services. It's a simple matter of flipping a switch somewhere. It is absolutely possible to flip a single switch instead of 2, 3, or more,

Or, nowadays, simply selecting an item from a drop-down menu on the computer, thereby flipping the switch remotely; no personnel need dirty their overalls.

It should not cost more to do less.

Enough is Enough!

On all of these things, these corporations need to be taken sternly to task.

Everything is wrong with everything these corporate giants are doing, and that is why no single reason can be given by any one member of the current "occupy" movement.

Everyone who is there participating is protesting on behalf of their own particular problem, or that of an organized sub-group. There are a multitude of reasons, yet there is only one reason. It boils down to this:

The single reason is "everything!" It's all gone wrong--it all needs to be fixed. No more excuses need be offered; they will be not accepted.

Research References

“Antitrust Law.” Antitrust Law, West's Encyclopedia of American Law, 1997,

David Rosen, Bruce Kushnick / AlterNet. “The Secret $8 Billion Wireless Scam:” Alternet, 16 June 2011, 03:00 GMT,$8_billion_wireless_scam:_how_at&t,_t-mobile_and_verizon_game_the_system.

“A Short History of the Telephone Industry and Regulation.” A Short History of the Telephone Industry and Regulation, International Telecommunication Union, 2002,

Themancommon. “Common Man News.” It's Time to Break Up AT&T, Verizon, Comcast, Time Warner and the Rest of the Telecoms, 1 Jan. 1970,

© 2011 Liz Elias


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