TELECOM Digest OnLine - Sorted: Re: Verizon Reduces Prices for Phone Service

Re: Verizon Reduces Prices for Phone Service
10 Nov 2005 09:52:14 -0800

Lena wrote:

> (Heck, my bank was advertising free online billpaying for the past six
> months, and the website still indicated it cost $6.95 per month until
> I emailed them about the discrepancy).

Sadly, these ad discrepancies are a big part of the world we live in
today. Companies are so big and far flung that often the right-hand
doesn't know what the left-hand is doing.

Further, many of the ad campaigns are run by extra aggressive
marketing and advertising units which are not in touch with the rest
of the company, indeed, often are not even part of the company but
just a hired consultant. Try calling one of the promotional 800
numbers and tell them you have two-party service or a 'local battery
line' and if you can still ger DSL and they'll say "sure you can,
that's not a problem". They're just a bunch of boiler room serfs
under heavy pressure to sign up as many names as possible. This isn't
just the phone companies, but big banks, department stores, even

> Verizon won't entice me back until they drastically drop the cost of
> their unlimited local calling, included caller id and call waiting, and
> add a very low rate long distance plan. I just don't use enough LD to
> pay a fixed amount per month for unlimited LD calls.

Everybody's situation is different.

For myself, I found it cost effective to switch to unlimited LD. The
reason was that while I make extremely few traditional "long distance"
calls, I make a lot of local toll calls. Local toll rates are high as
is unlimited regional local service (which is what I had before).
Upgrading to unlimited national LD from regional LD is only a few
bucks more.

In the old days of the Bell System short distance toll calls were very
cheap, only a few cents per minute. But after divesture every toll
call, whether 10 miles or 1,000 miles away became the same rate. For
myself, I was paying EIGHT times as much for my LD calling. So much
for divesture saving us ordinary consumers money.

I think the new era phone companies new most subscribers area of
interest was regional toll calls, not 1,000 long distance. Thus, it
was profitable for them to lower the price of 3,000 mile calls while
steeply increasing 10 mile calls.

> [TELECOM Digest Editor's Note: ... Two questions you may wish to ask
> the rep on a subsequent phone call: (1) is this new rate a
> promotional thing for new/returning subscribers only and if so (2)
> how many months is it good for? Is any contract required, and if so,
> for how long?

Very good and important questions to ask. A common practice today is
to have promotional plans to lock you in, than later discretely
steeply jack up the cost of service. Most consumers will be lazy and
do nothing and keep the service. Another practice, esp in long
distance, was to discontinue a plan and revert to higher a la carte
pricing. A third practice was to add a service charge on top of
actual usage charges. I avoided many LD plans that add a $5/month
service charge since that $5 far outweighed any savings from the plan.

I will note that my Verizon LD plan has been fixed and trouble free
since I got it. Having unlimited service does make it more pleasant
to chat on the phone without worrying about the meter running or
wasting calls to someone's machine and playing phone tag.

> regarding a 'tie-in' to DSL service where you must take the one to get
> the other

My LD plan has no tie-in to DSL. However, getting DSL does have
tie-ins to other services. One must be careful ordering DSL, although
users I've spoken to are very happy with it. I'll probably go that
way when I get a new computer than can handle the speed.

> not at all very politic but interesting none the less: telco is
> _supposed to be_ a common carrier utility operated at cost. Did the
> operating costs suddenly make it feasable to offer this 'reduced
> rate' now; if it was feasable earlier, _why wasn't it offered
> earlier_?

It has been fairly recent that the local telcos have been allowed to
offer their own long distance service and bundle it with other

Many parts of telephone service are no longer offered as "common
carrier" status, that is, they have been deregulated. I think
nowadays basically the local dial-tone line is all that's left of
common carrier regulated status, everything else is optional and
unregulated. The phone co can thus introduce or withdraw services and
pricing as it sees fit. I pay a single phone bill to Verizon, but on
the fine print (literally) of the bill are a variety of Verizon
subsidiary companies offering various services to me, all bundled

If I fail to pay my phone bill, Verizon can shut off instantly any of
the optional services. However, it must follow PUC procedures for
protecting local service. The bill includes a complex matrix of
charge and payment allocation.

That's really only the fair to go nowadays since the competition has
the ability to market as it chooses, so the local Baby Bell should be
able to do the same.

Those who advocated free market competition in telephone service had a
false idea that prices would be the lowest possible. That is not how
it works in other businesses. Every business has some high profit
items and low-profit items for a variety of reasons. Sometimes it's
more profitable for a business to charge a high markup and sell low

The sad fact is that our telephone companies, once proudly quite staid
and proper, are now as slippery as the guy in the loud plaid jacket at
the used-car lot down the street. In the old days, when Ernestine
quoted you $4.65 for local service, that is what it cost you. Today
the quotes are meaningless with all the extra "FCC Line Cost", "Deaf
Relay Service", "911 Fee", "Porta number fee", "Help the Martian
settlers fee", etc.

I know others steadfastly maintain long distance rates are lower on
account of competition. However I maintain it is technology. Cheap
switchgear and fibre channels are a world of difference to what AT&T
had to do to offer long distance 30 years ago. Rates were dropping
long before divesture came along. Further, many toll call services,
such as collect and pay phone, have gone up dramatically. Remember
that the same technology that allows you to buy a computer for $500
that once not long ago cost $10,000 applies to telco equipment as

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