832 Price Signal?

Thursday, August 03, 2006

Roman mentioned on Tuesday that since he now uses the cell phone for most calls, he changed the house phone to a cheaper plan. The change requires no change to equipment, just to how he's billed, so all it needs is a (probably one-line) change on a computer. He's annoyed because the phone company is charging him a $45 "service charge" to make that change. It'll take several months of phone bill savings to make that up. But what really ticked him off is that if he had moved to a more expensive plan, requiring the same change, there would be no charge. So the service charge is not to cover the expense, it's to discourage people from changing to a cheaper plan.

There ought to be something illegal about that. It's certainly immoral. After all, retailers aren't allowed to charge more if you use a credit card instead of cash, even though credit card processing does cost them a significant amount more.

Yesterday (I think it was yesterday) I was watching a PBS news show about the problems with electrical service, specifically about brownouts and drops when the demand is high. They had some honcho on, and they talked about public education on conservation and how it is and is not working, and the honcho said that one of the problems is that "we haven't been sending the correct price signals to influence consumption." Direct quote.

Think about that a minute.