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A Close Look At Your Bills’ ‘Fine Print’

Filed by KOSU News in Business.
September 20, 2012

Americans are paying high prices for poor quality Internet speeds — speeds that are now slower than in other countries, according to author David Cay Johnston. He says the U.S. ranks 29th in speed worldwide.

“We’re way behind countries like Lithuania, Ukraine and Moldavia. Per bit of information moved, we pay 38 times what the Japanese pay,” Johnston tells Fresh Air’s Dave Davies. “If you buy one of these triple-play packages that are heavily advertised — where you get Internet, telephone and cable TV together — typically you’ll pay what I pay, about $160 a month including fees. The same service in France is $38 a month.”

In his new book, The Fine Print: How Big Companies Use “Plain English” to Rob You Blind, Johnston examines the fees that companies — such as cellphone and cable — have added over the years that have made bills incrementally larger.

Johnston says that telephone and cable companies worked the regulatory process and the legislatures and Congress to get the rules written for their benefit.

“Over the last 20 years, we’ve paid at least $360 billion in higher rates to the traditional telephone companies, and well north of $100 billion more to the cable companies, who all testified before Congress, made filings with regulatory agencies, bought ads on TV that told us we were going to have this information superhighway and it was going to be everywhere,” he says. “Instead, what they built was a system in very limited locations.”

Johnston cites Verizon as providing fiber-optic service to 16 million Americans with no plans to build more.

“Whole huge parts of the country — all of northwestern and central New York [and] everything away from metropolitan New York — is not scheduled to get the high-speed Internet that we paid for and we were promised,” he says.

An investigative reporter, Johnston worked for The New York Times for 13 years and won a Pulitzer Prize in 2001 for exposing loopholes in the American tax code. He is a columnist for Reuters.

Interview Highlights

On additional fees in phone bills

“The phone companies, first of all, have begun adding all these additional fees. If you got a single bill and they raised the price, you’ll tend to notice. But if there are lots of little fees built into the bill, and they raise this one this month, and another one two months from now, and then they raise another one two months after that — you tend not to notice this.

“One of the items on the phone bill, one that’s more than doubled in real terms in price, is often referred to as ‘FCC line charge.’ Now, that sounds like the Federal Communications Commission is imposing a fee on you — presumably to finance the FCC. In fact, that is the charge paid to connect to the long-distance system: It goes entirely to the phone companies; it doesn’t go to the government. And the FCC has something called ‘a requirement for plain English language,’ so people can understand their phone bills. And here is a perfect example of the misuse of language to confuse people and not have them understand what they’re really paying for.”

On how a city built its own municipal electrical system

“They created a municipal electric system. Well, they also built a municipal Internet, and it is so high-powered and so fast that a lot of the work done for the Pixar animated movies is done not in Hollywood, but in Lafayette, La. Well, the response from AT&T, Verizon, Cox, Time Warner and the other cable and telephone companies has been to go to legislatures and say, ‘We want a law passed that either blocks or makes [it] virtually impossible to build municipal systems. That’s competing with our business interests.’ And that’s part of the whole strategy they have: ‘We want to be monopolies without competition, we want to run the system in our interests, to maximize our profits,’ with no regard for the overall economy of the United States.” [Copyright 2012 National Public Radio]

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