Tele-Phony: Why We Pay Too Much

Verizon just stuck us with a $300 monthly bill. Why? Because we went over our monthly allowance of 500 minutes. How were we so negligent as to run over by that much? Because Verizon charged us for our calls to each other. On our family plan! Not only did they charge us for those minutes, but they charged them TWICE. For both of our phones. We got it worked out but it was a real hassle - completely their mistake.

But that introduces the question of the day, to wit, why are phones so expensive? Let's look at landlines. What are you paying for when you buy a landline service from Verizon? In theory you are paying for that copper wire that runs up into your house and the cost of your call is the cost of renting a dedicated switch. But you don't need that copper wire anymore - we're in a digital world now - a world of the packet-switch network. Voice can travel over fiberglass cables, the same that carry your internet to your computer.

If you are using Voice over Internet Protocol (VoIP) the cost of that switch should be around $.000029 per minute for a call to JAPAN. Businesses are beginning to move over to services such as Vonage. It's saving millions of dollars. The telecoms are going to have to adapt or die.