Telecom pricing: ad price is not the price

Posted by & filed under Oddities, Technology.

When I just moved to Texas, I was shocked at local telecommunication pricing. Not as much at how much it costs (well, at that too, sometimes) but how far away you are removed from the real price.
First encounter was with the regular phone, but then pretty much the same problem happens in almost all “major” cell phone carrier. Advertised price is never what you actually pay.

Something, that is advertised to be, say $19.95 would turn out to be closer to $25 or more. Because there will be “FCC Line Fee”, “Universal Service Charge”, and so on and so forth.
What’s worse, practically nobody could say how much it would cost upfront. You have to actually order the service (or go pretty far along in ordering) before you get the price.

Telephone and mobile companies claim that those additional “fees” are just taxes, so they don’t have to include them in price of the actual service. Right, except not all “taxes” are really taxes, they just look that way. Nobody forces them to charge user Universal Service Fee (that gets spent foolishly afterwards, under the banner of “affordable service”). It just means that they can either pay it out of their own pocket or pass it along to the customer. Unsurprisingly, they always choose the second.

Can you imagine how it would feel to live in a world where all industries use the same billing practice? You go to fast food place, big lightbox advertises $9.95 combo. Great! You order it and you get…
Super Food Combo: $9.95
Sales Tax: $0.09
Food Tax: $0.12
Choking Rescue Service Fee: $0.28
Narrow Throat District Choking Fee: $0.13
Hand-washing Fee: $1.03
Floor Cleaning Surcharge: $0.87
Affordable Hamburgers Fund Fee: $0.97

Would you be happy? Something tells me that not. But because fast food industry had no chance to introduce such pricing, this situation is purely hypothetical.

Don’t get me wrong, I love when taxes and fees are separated from the actual cost of product. Gives you a perspective. But I believe that advertised price should always include all of those costs you’d encounter should you actually decide to buy the stuff. I mean gas stations always advertise exactly the price you’re paying (perhaps because you’d be shocked with 47% tax), but not cell phone carriers. Crazy!

There is one exception. Prepaid carriers. Short of sales tax on re-fills, they seem to be pretty much straightforward with their pricing. So, if you don’t need a giant country-wide network, think about a prepaid carrier. You will know exactly how much it costs.

Leave a Reply