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March 2005
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Tough words for telecom companies

Generic camera cell phone.

CAN'T TAKE IT WITH YOU
 The cell phone, that is. Switch carriers and you may need to buy a phone that works with a new network.
The TVs in this issue aren’t the only things getting bigger. So are the bills that consumers have to pay to watch anything on those huge screens, the companies that produce the programs that bump up the bills, and the hassles consumers face when they deal with all types of telecommunications companies.

Here are a few of the issues that confront consumers and that Consumers Union, publisher of Consumer Reports, is tackling on your behalf. You can read more about the problems, and what we’re doing to solve them, at a new Web site we’ve created, HearUsNow.org.

You shouldn’t have to buy a new cell phone. Although U.S. consumers recently won the right to take their numbers with them when they change carriers, they still can’t take the phone. In Europe and elsewhere, wireless providers have adopted a common standard known as GSM. Consumers can buy "unlocked" phones that work on the common network and can easily switch carriers by changing a Subscriber Identity Module (SIM) in the phone. In the U.S., no such standardization exists, and even providers that use compatible networks generally sell "locked" phones that can’t be used on competitors’ systems. Most customers who want to switch carriers must shell out more money and have to dump a perfectly good phone.

You shouldn’t be charged for cable TV you don’t watch. Currently, cable subscribers in only 2 percent of American markets have a choice of cable companies. Those lucky few pay about 15 percent less for their TV programming than other cable subscribers. The cable industry has evolved as a local monopoly, with few consumer or rate protections. Cable bills are rising, and most people are stuck with inflexible packages of channels that the cable companies put together. If consumers could subscribe to individual channels or to packages of programs they really want to watch, they could lower their bills.

You shouldn’t be denied media diversity. We, the public, depend on TV, radio, and newspapers to learn what has happened, understand issues, and make informed choices. A range of perspectives is critical to that process. But just six corporations control most of what we see on TV. One company, Clear Channel Communications, has amassed more than 1,200 radio stations nationwide. And just 20 percent of daily newspapers are independently owned. In June 2003, the Federal Communications Com-mission voted to overturn most of the remaining restrictions on how much control one media company has over the news in your local media market. Those rules have been largely struck down by a federal court. But the FCC is rewriting them, and it’s not clear when the process will be completed or whether the agency will go far enough to ensure that the media are independent and diverse. Consumers Union will keep fighting to strengthen those rules, limit costs, and expand the number of information sources available to consumers.
Jim Guest's signature.

Jim Guest
President
Also, in March: Consumer Reports Money Adviser, a newsletter for consumers wanting in-depth coverage of personal finance. Like all of our publications, it accepts no advertising and serves only one interest--yours.