Pity the poor carriers? I think not

In a letter to The New York Times, Verizon Wireless' CEO argues that the industry only does its customers good. I don't agree.

Apparently, wireless carriers like Verizon Wireless aren't feeling a lot of love at the moment. Not only does it have to deal with its ever restless customers, but also it is under fire from members of Congress and rural operators who claim that the major carriers' exclusivity deals hinder competition and innovation.

Though Verizon has agreed to shorten the exclusivity deals to six months, rural carriers like Cellular South still aren't pleased. So now, Verizon is taking its case directly to the American public. On Thursday, the carrier released a letter that its CEO and President Lowell McAdam had posted to The New York Times.

In a classic case of "it's never about what it's about," McAdam doesn't mention carrier exclusivity; rather, he argues that the big, nasty carriers really aren't so big and nasty after all. He also invites government officials and the media to rely on facts when reporting on the industry.

"The wireless sector of the high-tech industry shines as one of the few bright spots in the nation's economy," McAdam wrote. "Competition has driven massive investments, continuous innovation by wireless companies and our many corporate and entrepreneurial partners, and lower consumer prices." McAdam then goes on to list four wireless myths and four facts to contradict them.

Though I couldn't agree more with the need to rely on facts, relying on facts can be tricky. Facts can be selected to support an argument rather than the other way around. Indeed, I have to take issue with some of the facts he presents. Here's what he had to say.

Cost
To dispute the myth that "Americans pay more for wireless service," McAdam cites a study from the Organization for Economic Cooperation and Development, which found that Americans use more wireless minutes per month than European consumers and get a lower cost per minute (an average of 10 cents lower).

At the moment, I don't have any studies to directly contradict McAdam, but I'm not sure that cost per minute is a fair comparison. If someone uses more of something, it's not illogical that he or she would have a lower cost per unit than someone else. I'd rather compare how much a typical American consumer and a typical European consumer (if there is such a thing) pay per month for a similar calling and data plan.

Also, I had a couple of questions. If Americans really are paying less than our friends across the pond, why are we charged for incoming and outgoing text messages and calls? And will you consider cutting us a break on the outrageous data roaming charges?

Competition
McAdam shoos away the myth that the wireless industry is not competitive by quoting former Vice President Al Gore, who called the U.S. wireless industry the most competitive on the globe. Perhaps Gore should stick to the environment, because I hardly think that he qualifies as an accurate barometer of the industry's competitiveness. Also, while McAdam rightly points out that U.S. customers can choose from four national carriers and a large selection of wireless carriers, it's purely opinion whether that is a sufficient amount.

We can't forget that quantity doesn't trump quality. While U.S. carriers may be competitive with each other, our selection of high-end phones and the reach of high-speed networks can't compare with what's overseas. Despite a surge in unlocked models, the selection of available handsets in the United States remains overwhelmingly in the hands of the carriers. Yes, that's mostly due to the concept of the subsidized phone, but it's fact. Competition needs to extend beyond the price of a plan.

Customer service
I'll give McAdam some ground on whether U.S. wireless customers are treated badly (his third myth). Customers of large, faceless corporations are never going to be 100 percent happy--that's just the name of the game. What's more, you'll always find a dead zone somewhere. Those caveats don't free carriers of any responsibility to satisfy their customers, but we need to dispense with the expectation that they're always going to do right.

Also, I can't dispute the U.S. Government Accountability Office study that McAdam cites. It found that 84 percent of American adults are "very or somewhat" satisfied with their wireless service. He also mentions an unnamed study that reports a "surge" in wireless customer satisfaction. While you can nitpick the studies--what the heck is a surge and is "somewhat satisfied" really a good thing?--I've seen plenty of studies that find a broad degree of customer satisfaction.

True, customers may be telling their friends one thing and pollsters another, but there are more important issues to consider. Even if wireless customers are happy, carriers still pursue practices that aren't customer-friendly. How about making it easier for us to get out of contracts with cause? Why not be really honest about coverage? Perhaps you could let us unlock handsets when your contract is up? And while some carriers do so now, why not make it a standard industry practice to limit early termination fees and prorate the fees as you get close to your contract's end? And those are just a few.

Rural customers
McAdam closes by assuring us that carriers do indeed pay attention to rural customers. To back up his argument, he cites the $60 billion that Verizon has invested in its network and its recent purchase of Alltel. Those are all well and good, but as any rural resident, mountain vacationer, or interstate driver can tell you, rural coverage is far from perfect. There is room for improvement.

As I said earlier, facts are important, but so are the facts that you use. I don't agree that wireless companies are evil. Most of the time I believe that they are trying to serve their customers well. We just hear about the horror stories because they're more interesting than the successes. Yet, I take McAdam's letter with a healthy dose of skepticism. Don't patronize me with a lecture on why the industry is great. Instead, be honest about your shortcomings and address my concerns.

 

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