Mon Jan 7, 2013, 07:40 PM
zeos3 (1,078 posts)
Lazy Corporate Monopolies Are Why America Can't Have Nice Things
Throughout much of the United States, cell phone service is terrible (so is broadband, as Susan Crawford shows). And not just in rural or sparsely populated areas, but cell phone calls routinely drop in major metropolitan areas. You canít use your phone underground in New York, and there are plenty of places on Capitol Hill you canít get service. I actually once had trouble getting service near the Federal Communications Commission. This is a result of a lack of competition and increasingly poor regulatory policies. In the late 1990s, 50% of wireless revenues were invested in wireless infrastructure. By 2009, that number dropped to a little over 10%. What is it today? We donít know, because the FCC no longer even collects the data. The result is that your cell phone drops calls. Cell phone service is also expensive, and the companies nickel and dime you - America is one of two countries where the person receiving the call has to pay for the call. A rough calculation shows that up to 80% of the cost of your cell phone service comes from corruption.
Our banking services are similarly terrible. We have an increasing amount of power in the hands of a few large consumer banks. In most of Europe and in the UK, consumers rarely use checks, they simply transfer money over the internet. A paper check is somewhat absurd Ė a check is a few bits of information, so there should be no reason to clear this through a paper-based system. But in the US, the backend is still rooted in a 1970s architecture called Automated Clearing House, which was itself layered onto a much older system. This system allows checks (and debit card transactions) to take up to five days to clear, and is remarkably insecure. The association that runs the ACH, known as the National Automated Clearinghouse Association (NACHA), refused to upgrade it after member banks voted to kill a measure to speed up our payments clearing system. In America, the largest banks Ė JP Morgan Chase, Bank of America, and Wells Fargo Ė are only now introducing products to allow internet transfers between bank accounts. I tried Chaseís Quickpay service a few weeks ago, and itís pretty confusing and limited. Mostly, the fat and happy credit card oligopoly of VISA and Mastercard enjoys absurd margins, a roughly 2% tax on every transaction in the country.
These systems interrelate, and inefficiency in one impacts the other. This became very obvious to me when I went to Kenya last summer, and saw how a semi-competent telecom and banking system could work. Kenya has the worldís most innovative mobile payments system, called M-Pesa. M-Pesa is a cell phone based cash remittance system based on text messages. Unlike Chaseís Quickpay system, M-Pesa just works, and works well. You load your SIM card with money at any number of street stalls, telecom stores, beauty shops, or anywhere else someone has decided to set up a Safaricom outlet. Transfers happen via text message, and they cost 0.5 Ė 4% of the cost of the transaction, which is cost effective for a country where so few people have access to banks. Withdrawals can happen at any Safaricom outlet. If your phone is stolen, thatís ok, the cash is loaded onto your SIM card and you have a unique password. And everyone uses it. Itís like Paypal, only itís not terrible.
5 replies, 703 views
Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Lazy Corporate Monopolies Are Why America Can't Have Nice Things (Original post)
|Kelvin Mace||Jan 2013||#1|
Response to zeos3 (Original post)
Mon Jan 7, 2013, 07:44 PM
Kelvin Mace (16,948 posts)
1. It is also the reason the phones are overpriced
as well as unreliable.
Because of the "subsidized" phone model, the price of phones remains sky high. If phone were completely detached from service providers, they would have to get cheaper to compete. Because there is no real competition (every provider uses the same revenue model), the phones have remained expensive and the service shit.
We can talk to space probes billions of miles away more reliably than we can talk to people in the next building.