Wednesday, September 27, 2006

Calling about that double-dip


Americans are called to pay a two-sided bill like it was a privilege, but it’s one that might have the less fortunate smashing their cell phones in disgust.
That angry phone smasher, hurling a cell into the hard pavement would enjoy an instant of the most control its owner had in a caller pays system: such as we have here. United States cell phone owners saving some time on their units for an important call, suddenly hit by meaningless calls from friends or family, wiping out that phone’s ability to call, know the frustration and understand that lack of control.
People in the U.S. are among what appears to be a global minority double-dipped in cell phone use – paying for both incoming and outgoing calls. Canadians and some Chinese appear to be the only members of this exclusive club.
“No, we don't pay to receive calls on our cell phones at St. Lucia in the Caribbean. You still do in the U.S., don't you? You poor, poor things,” says teacher Linda Ambrose by e-mail.
“In all of the Middle East, surely for Lebanon, Saudi Arabia and the Emirates, you do not pay for receiving phone calls on your cell except in one case: when you are roaming. That is, if you have a Lebanese number with roaming service, if you are in Jordan and you receive a phone call on your Lebanese number, you will pay for receiving that call,” writes Lebanese businessman Rabih El Khoury from the Middle East.
In China it depends on which company you do business with. Receiving calls is said to be free there on CNC, but the two other companies will charge you for receiving a call – just like you were in the U.S., says a source where anonymity is often a good idea. CNC is a local network and only available within a contracted area, however.
Closer to home, Mexico enjoys the spirit of the larger world and only pay for outgoing cell calls. But get close to the border and your charges can jump several times, making it a good idea to have a doctor ready when the bill arrives.
Border businessman Rebiere Rodriguez is one of thousands who have been stung with roaming charges for making calls from Mexico – without crossing into Mexico.
“On Cingular downtown, it’s impossible with the Mexican signals,” he said. “Once close to the border they hit you for roaming charges. At the border it starts to go crazy.”
Rodriguez says his bills have doubled and tripled thanks to roaming charges. Rodriguez says he used to have service with Nextel in Mexico and Telcel, but doesn’t anymore. He has switched to Cingular, but it’s not perfect there, either.
“I try not to get near the border and don’t answer near the border because I know it’ll be roaming,” he said.
Geraldo Lopez at Bound USA Custom Brokerage says he has gone the opposite direction and found relief from roaming charges.
“I used to have Cingular and had problems with that, but not now,” Lopez said. “Not with Sprint and Nextel. No problems.”
That cell phone problem on the border in California has been alleviated, but somebody had to hire some legal help to get it done.
“As to the border roaming calls -- yes, this is a problem largely attributable to antenna placement. We have successfully sued Cingular for this practice along the Mexico/San Diego border. They readjusted their antenna and fixed the problem,” said Michael Shames, executive director of the San Diego-based Utilities Consumer’s Action Network. “Caller pays versus callee pays is a long-standing issue that has been debated in Congress but has gotten nowhere. It is fairly complex.”
Dallas-based Cingular spokesman Frank Merriman says his company was already working on a billing solution for San Diego when the lawsuit was filed, but he acknowledged a South Texas similarity to that other border situation.
“We don’t want customers billed inaccurately,” he said.
Merriman noted that some of Cingular’s problems stem from consolidation with AT&T, taking in 15 additional cell sites, or towers. Merriman added that those antennae can be relocated almost anywhere onto buildings, roadside signs, schools, fire stations, but there is usually a fee associated with site locations.
A large telecommunications lobby in state capitols and in Washington, D.C. could be at the heart of the caller pay vs. receiver pay debate, outspending almost every other lobby. It proved its strength in California in recent years, gunning down a state law which would have made it illegal to talk on cells when driving.
Washington D.C.’s Center for Public Integrity says the amount of money used in federal telecommunications lobbying, alone, is staggering.
“The way we breakdown industries, telecom could really involve a few industries: telephone utilities, $367,407,583.00; TV, movies and music $278,684,955.00; telecom $176,701,962.00 and communications $47,407,156.00,” reports CPI interim press secretary Bradley Glanzrock. He added that all numbers are from the beginning of 1998 and the end of 2004.
Small parts of that type of money could easily control some foreign countries.
Laredo’s Congress Representative Henry Cuellar saw the Telecommunications lobby in action in previous work on the state level where it fought a tax. He did not see telecommunications lobby resistance take place on the national level when they were told they needed to contribute to the schools and might have helped in some small way with funds in the $5.9 million dollar telecommunications award given to the Laredo school district earlier this month.
Cuellar serves on agriculture and business committees, leaving him out of much direct contact with the telecommunications lobby, but feels he could deal with them, despite the trappings of the U.S. electoral system, which almost forces candidates to solicit corporate funds.
“I have received money from AT&T, Verizon and some PACs and we need money to run our campaigns, but we genuinely have to be with the voters. The voter gets you in,” Cuellar said.
Cuellar’s Congressional cell phone is from Cingular, but goes with Sprint for his personal cell, noting only a few occasional delays. He also has two blackberries.
While Americans, Canadians and several Chinese lack control in their cell phone billing, there is a bright side in generally paying less than callers in Europe. Experts credit better competition and intense use in the United States for that positive note.
“Some analysts have also explicitly compared the United States and Western Europe with regard to mobile competition. These analysts agree that the U.S. mobile market is more competitive than most mobile markets in Europe, and that this is one of the primary reasons for lower revenue per minute in the United States,” said the Federal Communications Commission in one it its recent annual studies of the wireless industry. “European mobile subscribers are more likely to opt for text messaging because it is cheaper than placing a call on their mobile phones. In contrast, most U.S. mobile subscribers are on calling plans that include large buckets of minutes and are more likely to make a phone call because the incremental cost of a call is close to zero.”
For convenience, many U.S. companies have added a pay-for-minutes by credit card option to their phones, and many have outlets in many, many small places, which should handle most situations.
Linda K. Moore, a telecommunications policy analyst for the Library of Congress’ Congressional Research Service, says cell phone service in the U.S. and Europe evolved differently and Europe’s Global System for Mobile Communications (GSM) was sold to many other countries, helping to spread the caller pays system around the world.
Moore noted that most phone companies in Europe were state-owned monopolies when GSM was introduced there and the U.S. had already experienced the AT&T breakup., leading to our more competitive cell phone market.
“To help cover the cost of placing a call to a wireless phone, the European companies added a surcharge paid by the caller; that is, the caller paid the regular cost of the call plus a surcharge when the call went to a cell phone,” said Moore. “In the United States – where many companies were competing both in wireless and the traditional wireline – the surcharge, so to speak, was charged to the cell phone owner. Thus, the caller paid the same amount to call a local number whether it went to a regular phone or a cell phone. The costs of building the wireless infrastructure were borne exclusively by wireless callers.
“Although the markets and technologies have evolved, these billing practices have remained generally in place.”

Note: The print version of this story can be seen in the Sept. 2006 issue of LareDOS, out in various sites now. It will also become available online at


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