Why Are My Cell Phone and Cable Bills So High?

What is the need for a cell phone again?

If you guessed “the government,” you’re right.

I recently stumbled across an advertisement for “Assurance Wireless,” a free cell phone service offered to eligible residents.  This program offers a free cell phone, 250 minutes per month, and all the usual features of a cell phone (call waiting, caller ID, voicemail, etc).

For $5, the customer can double his or her minutes, and for $25, that person can gets 1,000 minutes and 1,000 texts.

Sounds like a pretty great deal.  But using my common sense, I know someone is paying for this, and it isn’t Virgin Mobile (the provider of “Assurance Wireless”).  A quick perusal through the fine print, and I see that the program is “supported by the federal Universal Service Fund program.”  Oh, what a surprise, the federal government is involved.

Not satisfied, I decide to look a little further into this.  A quick search brings me to the Wikipedia page for the Universal Service Fund.  The page gives the following definition of the USF program:

The Universal Service Fund (USF) was created by the United States Federal Communications Commission (FCC) in 1997 to meet Congressional universal service goals as mandated by the Telecommunications Act of 1996. The 1996 Act states that all providers of telecommunications services should contribute to federal universal service in some equitable and nondiscriminatory manner; there should be specific, predictable, and sufficient Federal and State mechanisms to preserve and advance universal service; all schools, classrooms, health care providers, and libraries should, generally, have access to advanced telecommunications services; and finally, that the Federal-State Joint Board and the FCC should determine those other principles that, consistent with the 1996 Act, are necessary to protect the public interest. As of the first quarter of 2011, the USF fee, which changes quarterly, equals 15.5 percent of a telecom company's interstate and end-user revenues.[1]

Note that last sentence.  A company must spend more than 15% of it’s revenue--not profit, but revenue--on this fund.  I’ll refrain from using rhetoric and let you use your own mind to determine what exactly this is.

If you paid attention last month, Comcast’s purchase of NBC Universal resulted in their “requirement” to provide $10/month broadband Internet access to low-income families as well as a similar “free laptop” program for low-income families.  I put “requirement” in quotations because while they weren’t forced to, it certainly wasn’t something that they would have put into a purchase of a company for shits and giggles.  Admittedly, I originally thought it was another government over-step (if you want us to allow this deal, you have to do this).  However, now that I’ve discovered the USF, I see that it was most likely just the program they put in place to adhere to the program’s federal requirements.

So the next time you wonder why your cell phone or cable bills go up, consider the possibility it’s more than just ”those greedy bastards.”  First look at the breakdown of taxes and fees--most are federally required, and total at least an extra $10--and then, consider the USF.  15% of revenue--remember, not profit--is a lot (and certainly more than the cost of the “perks” enjoyed by corporate bigwigs).  Chances are, you’re helping provide free cellphones, laptops and discounted broadband for others, even if you don’t want to.

It’s not the only reason you pay so much, but it’s certainly the sneakiest.  And I guarantee most of you didn’t even have a clue it existed.

Skyrocketing Fuel - The Real Impact of Middle Eastern Revolution (And How to Protect Ourselves From It)

West: Gas prices are skyrocketing. The national average is $3.43/gallon, and it’s increasing every day.

Middle East: Civilian deaths are skyrocketing. The estimate is in the thousands, and it’s increasing every day.

One might be much worse than the other--but they’re undoubtedly related. And unfortunately, it doesn’t appear either will be changing (for the better) anytime soon.

There are three basic possible responses.

One, we do nothing. This is the most likely, and frankly the most alarming. We make a few extremely delayed statements supporting the protesters, move a few navy ships around, and make it seem like we’re trying to help.

Two, we take an active and involved approach, sending aid to the rebels, in terms of equipment, money and/or manpower. I don’t see this administration sending troops, and honestly we’re probably better off that way, because once we do, we’ll have to send them everywhere in the region (some may say this process already started almost a decade ago, and I wouldn’t completely disagree). Most likely, we’ll send some money, and maybe some firepower. Then we’ll jump in and try to steer the course of the new government. And we’ve got such a great track record of that (Saddam Hussein, Fidel Castro and Ayatollah Khomeini were all supported/installed by the US, either directly or indirectly) .

Three, we allow the people of the Middle East to handle their own revolutions--after all, they’ve all been saying they don’t like us or want our support anyway--and we begin to handle our gas price issue internally. I know, it’s a wild concept: people taking care of their own business first. And while I find this to be the most unlikely option, it’s certainly the common sense choice.

External Factors

The unrest in the Middle East is certainly the largest factor driving the cost of gasoline through the roof. Even though Libya produces a minor portion of the world’s oil, and virtually none of America’s, the 500,000-750,000 barrels a day they’re no longer producing has had a significant impact on the global market (Libya’s oil mostly goes to Europe).

The real issue lies in that big, oil-producing nation to the east. While Libya, Egypt, Tunisia, and Bahrain are the protests in the media spotlight, Saudi Arabia is dealing with the beginning of its own uprising. It’s also (along with Iran) the most dangerous. While even prepubescent minds understand that Iran joining the fray means, at best, major regionalized destruction putting Israel in extreme danger, many don’t realize that a revolution in Saudi Arabia would cause an unbearable spike in oil prices that even a thriving economy would be unable to effectively circumvent.

In comparison, it’s mild in Saudi Arabia--right now. But that’s how they’ve all started. It started out small in Egypt on economic reasons. In Saudi Arabia, it’s religious.

And it’s coming:

"Activists have called on Facebook for a 'Day of Rage' on March 11 and for a 'Saudi revolution' on March 20." (http://bit.ly/ib9VHB)

Sounds awfully familiar.

Domestic Issues

Now it’s not the only issue--there is some price gouging going on in tourist locations. An ABC News article noted prices of $5.29/gallon outside Orlando International Airport. And President Obama’s de facto moratorium on offshore drilling in the Gulf of Mexico has only aided in handcuffing the industry’s ability to stiffle the economic impact of the Middle Eastern revolutions. In fact, Obama’s and Regulation Czar Cass Sunstein’s lockdown on the Gulf has had an almost identical effect on production in the Gulf as has the unrest on production in Libya’s oil fields.

Obama's Gulf "Moratorium" has had an eerily similar impact to the unrest in Libya

That graph is scary if it holds true--and with the army of lawyers, engineers, rocket scientists, Supreme Court Justices and Bill Gates endowments it will take to obtain a permit from Czar Sunstein, it’s quite likely it will. And that’s sad considering the tens of thousands that are out of work in the Gulf region--not because BP wasn’t prepared for a unique catastrophe, but because of the stranglehold that has been placed on the industry.

ANWR and the Economy
(http://www.anwr.org/ANWR-Basics/Top-ten-reasons-to-support-ANWR-development.php)

First, you need to know what ANWR is--I didn’t until I researched it, myself. The ANWR region is a 19-million acre piece of land in northern Alaska. Okay, that’s not entirely true--the ANWR province is northern Alaska. This area, designated by President Jimmy Carter in 1980, is larger than 48 of the 50 states that make up this great nation (yes, the ANWR province is larger than the state of California).  It is also where the answer lies.

The area is widely considered to have a vast amount of “light” oil residing underground (“light” oil is the purer, preferred form of oil). The northern-most segment of ANWR, known as 1002 or 10-02, is believed to be the richest in terms of oil. That section spans 1.5 million acres, only 8% of the region. A number of studies have given estimates of the oil contained under 1002, the least of which being between 4.3-11.8 billion barrels of oil.

The main argument against drilling in the ANWR region is the protection of wildlife. The 1002 specifically is home to a particular herd of caribou that is the focal point of most anti-drilling arguments. However, a similar herd of caribou has thrived despite migrating through the Prudhoe Bay oil field in Alaska, increasing by 1320% since the 1970s. Doesn’t seem like the threat is that great, does it?

However, the potential benefits of drilling in the 1002 section of the ANWR province are tremendous. Alaskans want it--virtually all elected Alaskan officials, on both the state and national level, support drilling in the region, and over 78% of Alaskans support the idea--most likely because it is estimated to create hundreds of thousands of jobs.

This would in turn help the government balance their budget, as it would expand the tax base. It would also aid the economy, by keeping the roughly $400 billion sent overseas to import oil inside our borders.

Oh yeah, and it would accomplish that bi-partisan goal of ending dependence on foreign oil (a top talking point in the 2008 Presidential Election).

So why haven’t we begun the process of producing our own oil?

Probably because it’s common sense.

A Quick Briefing

Irons rusts from disuse, stagnant water loses its purity and in cold weather becomes frozen; even so does inaction sap the vigor of the mind.  ~Leonardo da Vinci

This will be an outlet.  Instead of posting everything on facebook, it will largely go here, first, to be blended and sorted.

Then it will go to facebook…

Nothing’s off-limits here:  Politics. Sports. Religion. Music. Movies. Books. Technology. Nonsense.  You name it…it’ll show up here, eventually.

This is mostly to serve as a journal.  A place to chronicle my thoughts and share them with whoever gives a crap.  Hopefully, it will spur on intelligent conversation, bring laughs, and entertain.  If not, oh well.

I’m not going to hide from who I am and what I believe, but I will always try to be respectful.  Keep in mind, respectful doesn’t mean politically correct. There will be sarcasm—which is not always well-translated into text—and attempts (however pathetic) at humor.

So take it in—or don’t—but it’ll be here.  I welcome comments, opinions, discussion, etc.  I only ask that you try, as I will, to be respectful.

Thanks!  And enjoy! (Or don’t)