An International Comparison of Cell Phone Plans and Prices Shows Discrimination Against Women and Minorities
In An International Comparison of Cell Phone Plans and Prices, New America Foundation’s Open Technology Initiative (OTI) found that cell phone carriers in the United States are engaged in widespread price discrimination adversely affecting women and racial minorities. The results of their international survey show that in several other countries, women and minorities are treated equally, but in the United States, they are charged substantially higher prices.
Well, the OTI’s report did not quite put it that way, but it might as well have said so. You see, the primary price discrimination was between prepaid and post-paid cell phone plans. You know what I mean by prepaid plans – they are the ones used by those who cannot afford post-paid plans, or who cannot get them approved because of their income or lack of a steady home address. In countries like India, South Korea, Sweden and Taiwan, prepaid voice plans cost the same as postpaid plans. In the United States, in contrast, prepaid voice plans cost 39% more. For text messages, prepaid plans cost the same as postpaid plans in Denmark, Hong Kong and Sweden, whereas in the United States, those who prepay for texting pay 400% more per message. But if making the poor pay 4 times more than the wealthy pay for texting doesn’t shock you, consider plain old data. In India, everyone pays the same amount for each megabyte of data – namely zero – whether prepaid or postpaid. But in the United States, a prepaid megabyte of data costs a staggering 12,800% more, according to the OTI’s survey. The wealthy can who can afford (and qualify for) post-paid plans pay 8 cents per megabyte, while the poor pay $10.24.
Clearly, then, price discrimination between prepaying for these services and post-paying is pretty dramatic, but where does discrimination against women and minorities come in? Simple: Those who cannot afford to pay for (or don’t qualify for) a monthly postpaid plan under a typical 2-year contract, and who are therefore forced to prepay for the use they want to make, end up paying more. And who are those most likely to pay 12,800% more per megabyte of data? Women, African Americans, Hispanics, and the elderly.
The affluent are not the ones to purchase prepaid plans (except in the case of unique circumstances, such as the extra phone for a child not trusted to keep a lid on use, or the throw-away un-traceable phone for nefarious communications). The poor, on the other hand, have little choice. If they do not have the credit-worthiness for the postpaid plans, or simply lack the means to be locked into the minimum level of postpaid service, they have no choice but to use the prepaid plans. The kicker? Women and minorities are disproportionately more likely to be among the poor – that is, among the prepaid users. Women, on average, earn less than men. African Americans and minorities and the elderly.
Income-based and wealth-based discrimination is quite simply – and quite blatantly – becoming the new proxy for illegal discrimination against people on the basis of gender, race and age. Is this intentional? It doesn’t matter – the injury is the same. It is time for Congress and state legislatures to put an end to income-based and wealth-based discrimination. Any price break given to the well to do is just the flip-side of a discriminatory price hike to those who can pay less, and surrogate price discrimination against women, racial minorities, and old people.