When touch-tone dialing was new, the Bell System charged a small fee for the service. It was actually cheaper to provide touch-tone (the registers that hear dialing were freed-up much quicker). The Bell system figured out that customers liked the faster dialing, and were willing to pay a premium to get it.
Extra fees are the passion of carriers (telecom and airlines) and banks. It requires creativity to come up with all these fees. Another good example is fast food – places like Taco Bell continue to invent new foods on a regular basis all without adding new ingredients. This creativity of invention is, in an odd way, something to respect.
AT&T now has a fee for not having long distance. Long ago, back in the days on a monopoly, AT&T charged businesses higher rates so Grandma could have cheap basic service. But now, cheap basic service comes with a fee for being cheap.
Karl Bode wrote the following insightful post:
AT&T has been engaging in a lot of nickel-and-diming behavior of late that’s normal for an anti-competitive giant, but a little odd for a company trying to sell regulators on their $39 billion acquisition of T-Mobile. After imposing some of the lowest caps and highest rates in the wireless industry, AT&T imposed new usage caps on broadband users without making sure the meters work. They followed that up by cracking down on unofficial tetherers (imposing a fee for doing nothing while crippling smartphones) and then substantially jacking up the price of SMS service by killing off one of their most popular SMS plans. Now according to the Cleveland Plain Dealer, AT&T has added a new $2-a-month “minimum use” fee to traditional landline users (all six of you left) who don’t use enough long distance for AT&T’s liking:
AT&T has added a new $2-a-month “minimum use” fee to the phone bills of landline customers who don’t have long-distance calling plans. In other words, customers who rarely, if ever, make long-distance calls are the ones most likely to pay the fee. Those customers can avoid the fee, a company spokeswoman said, as long as they make at least $2 worth of long-distance calls a month.
Imposing obnoxious fees at every opportunity certainly isn’t new (check out the real obnoxious fee experts in the banking industry). Neither is this particular effort, since Verizon started imposing a fee like this back in 2007. Still, you’d expect AT&T to tone this stuff down slightly while trying to convince regulators on how fantastic the T-Mobile deal would be for the public. AT&T’s total unwillingness to rein this behavior down in any of their business sectors suggests that the company knows full well that they’ll get T-Mobile deal approval. Given AT&T has contributed more to political campaigns than any corporation since 1989 suggests they’re probably right.
The T-Mobile deal aside, nickel and diming a declining userbase doesn’t do AT&T any favors. Landline service is inexpensive to provide, and pissing off a contingent that’s already fleeing to cable VoIP alternatives in droves is the kind of logic only found in phone company board rooms. You can only imagine the kind of new and “innovative” fees Verizon and AT&T will concoct with an 80% wireless industry market share.
(Cross-posted @ Pin Drop Soup)