Should the Wireless Carriers Be Nationalized?

I’m against the nationalization of private industry by government. But enough is enough.
Posted September 19, 2012

Mike Elgan

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The United States Constitution requires the federal government to “establish Post Offices and post Roads” -- in other words, to own and run the US Postal Service.

I think we should consider a Constitutional amendment that privatizes the Postal Service and nationalizes the wireless carriers.

No, I’m not a Chavez-hugging, Maoist commie. Quite the opposite: I believe in free markets and strongly oppose the nationalization of industries, as a general rule.

But I also believe that any rational person who agrees with the reasoning behind the Constitution’s Postal Clause should support the nationalization of the wireless carriers, simply because the wireless Internet plays the same role today that the post office played in 18th-century America.

Why Does the US Postal Service Exist?

Constitutionally mandated government ownership and control of a service for delivering envelopes and boxes seems strange.

But the drafters of the Constitution had some very good reasons.

First and foremost, they wanted to put “united” into the United States. By controlling the mail system, they could make sure that every state, every business and every individual could interact and communicate with every other at the same cost and at high speed (by 18th-century standards).

The cost of delivering mail to remote locations was far more expensive than the price paid for postage. The founders deliberately decided to lose money on remote mail service for the greater good of unity, fairness and national prosperity.

Without the US Postal Service, of course, private companies would have delivered mail. But the founding fathers wisely understood that allowing private control of the nation’s information circulatory system would have held the United States back when it needed to excel.

The reason is that private companies would have ignored expensive routes -- they wouldn’t have built thousands of miles of roads just to connect remote farms to the information system.

Furthermore, private companies would have sprung up locally, rather than nationally. These private companies would have varied in their infrastructure modernization, standards, fees and more. Shipping from one state to another would have involved the transfer of parcels from one organization to another.

They may have disagreed on standards for fees, package sizes, delivery times and more. Shipping a package from New York to Florida would have been like shipping from New York to the Philippines -- expensive, un-trackable and sometimes unreliable.

So the drafters of the Constitution avoided all these problems by mandating centralized government control of the postal system.

Why Nationalizing the Carriers Is a Good Idea

Obviously, the Internet -- and increasingly the wireless Internet -- have replaced hand-written letters as the information circulatory system of the nation and the world. The Internet plays the central political, social, cultural and economic role that the US Postal Service once did.

And all the nation-damaging effects that the drafters of the Constitution feared would happen with private post offices is in fact happening because of private wireless carriers.

The major carriers -- Verizon Wireless, AT&T Mobility, Sprint Nextel, T-Mobile USA -- have reliable wireless data service in all those places where it’s convenient and profitable for them to do so. Everywhere else, not so much.

Why? Because they serve the needs of their shareholders, not the needs of public.

People in rural areas are generally at a huge disadvantage -- some 19 million people in the United States still, after all these years, don’t have access of any kind to broadband Internet, let alone world-class mobile broadband.

In contrast, some areas have relatively fast services -- individuals, business and organizations in those areas have an unfair advantage over area where speeds are slow or coverage is non-existent. In the United States, all men are created equal, but all wireless coverage is not.

The United States, which invented both the Internet and the mobile phone, is now an international basket case and laggard in mobile broadband distribution and performance. The US is below the top ten for mobile broadband penetration, download speeds and every other metric you could come up with.

Mediocre and unevenly distributed mobile broadband service in the United States acts as a brake on the wheels of economic progress.

In recent years, the wireless carriers have all but eliminated unlimited data plans. They’re throttling peak-hour bandwidth, and nickle-and-diming their customers to death. All this increasingly makes the United States less competitive, as more and more business relies on wireless data communication.

And the carriers have turned the provisioning of wireless broadband into a shell game. You get a huge subsidy on your phone, and they just fold the rest of the price into your required two-year contract.

But what price? How much did they really charge you for the phone?

There’s no way to know. How much is the value of the service you’re really getting. Again, no way to know.

Wireless carriers gouge the public by hiding costs inside a cloud of ignorance.

A recent UCLA study found that carriers routinely overcharge customers for services they didn’t actually receive.

And mobile broadband done right would also do something about the fixed-broadband ripoff.

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Tags: wireless, mobile

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