Tuesday, December 23, 2014

Free market? What free market?

Certainly not in telecommunications!

All but one telecommunication company* that I know of violates two of the four requirements of a free market.

1) Many buyers and sellers (there are only a few sellers)
2) Buyers and sellers are free to enter and leave the market (we can give up our phones, but…)
3) Buyers and sellers have all the information they need to make a decision (the sellers sure don’t want to give you complete pricing information)
4) All costs are in the sale, that is, no externalities (well, there are externalities like telephone wires, but few really care about their existence)

This little screed was triggered by my desire to have better internet speed than about 5Mbps (nominal 7).  In Duluth, I can get 23Mbps on my cell phone, but if I use it as a hotspot for my laptop the speed drops down to less than 2Mbps.  That means I can’t easily replace my DSL modem by using my cell phone.  My cell phone is with Consumer Cellular* which in turn uses AT&T.  My DSL modem and home phone are with CenturyLink.

AT&T does provide quite a menu to match what you think you need with what is available.  Plans can get pricy if you use several devices, say two tablets and two computers.

The best deal I could figure out was a mobile hotspot with 4GB/month of data at $50.  I can only guess on how much I use.  The mobile hotspot (Unite Pro) costs $200 but is $50 with a 2 year contract (“excluding other account charges”).  If could be sure that we would stay in that limit, it might be a good replacement for our DSL.  Dropping the land line entirely, we could add a home base for our telephone and use our Consumer Cellular account.  That would only be a $10/month charge.  But, how much more voice time would we use?

As for staying in the 4GB/month, I can’t be sure.  My wife spends a lot of time on Skype.

Also, I can’t be sure the AT&T hotspot would always get above 20Mbps.

Also, just how much are those “other account charges”?

On the other hand, CenturyLink is offering 100Mpbs in certain locations.  Try to find those locations!  I got a gibberish page.

To get more detailed information, I had to have an online account.  I won’t go through the hassle I had for that, but I need not have done that.  My wife already had an online account.

When I eventually got my account working, I found the best we can do is 12Mbps.  I can’t find out the price until I request the upgrade!!  So much for the free market.  New subscribers can get it for $19.95/month.  If we’re paying about $60/month for phone and internet (including “other account charges”).  If the cost is split, we’re paying more than new subscribers for our nominal 7Mbps!

Do I go for an AT&T hotspot or do I replace our nine-year-old CenturyLink modem?

*Consumer Cellular is about the only telecommunications company that I know that tells you all of your costs (except “other account charges”).  Not only that, they warn you if your usage might go over your selected usage limit.  And you can change your limits up or down at any time.  The only problem I have, other than the cell phone as hot spot is not as fast I thought it would be, is that the max data limit is 2.5GB/month.

Decisions, decisions!  Computers may be more powerful than pens and paper, but buying pens and paper was a lot easier.