A Lesson from Airlines

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Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

A Lesson from Airlines

Have you noticed that the airlines are a lot like the telecom industry? Both used to be regulated; now neither are. Both had a bubble resulting in bankruptcies. Consolidation happened in both industries - with a disaster for consumers. United Airlines has a mess of a computer infrastructure much like the internal workings of AT&T and other merged entities.

Now telecom is learning a big lesson from the airlines - fees for profit. Globally airlines collected $38 Billion in fees. This is $15.4 Billion for the top 4 US airlines.

Welcome to ancillary fees in telecom. Deltacom (EarthLink) tried to raise rates acouple of years ago. When that blocked, they just added fees - administrative fees. Might as well call it what it is: We sold underwater and need revenue fee.

There are fees for paper billing in a few sectors. There are fees for paying by credit card. (My county charges $3.50 to pay by credit card). There are now fees to get a smartphone, since subsidizing the smartphones become unprofitable.

Account Maintenance Charge (AMC): "The AMC is a monthly recurring end-user subscriber charge associated with general account servicing and administration. Customers can receive credits to offset this charge by enrolling in electronic billing and/or ACH auto pay."

On top of recouping USF, 9-1-1, telecom relay and other government taxes and charges, telecom is starting to tack on other fees --- for profit.

There are VoIP companies collecting fees that they don't pay.

The funny thing about consumers: they penalize the providers who don't add fees!

Expect more fees. It's profit for them. Their paymasters are Wall Street want more revenue and margin. You can't keep saving people money and live on razor thin margins.



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