“Near Monopolies” Send Outsourcing Offshore

Consumers lose when telecoms go offshore

Welcome To Mumbai

Pulitzer winner David Jay Johnston’s “Bad Connections” editorial in Wednesday’s New York Times is a must read for consumers whose bills keep increasing for phones, TV and cable. He explains why, even when we pay more, we get less from the telecoms, now a small group of “near” monopolies. He reminds us that we “have been told that competition in telecommunications would produce innovation, better service and lower prices. What we’ve witnessed instead is low-quality service and prices that are higher than a truly competitive market would bring.”*

Johnston’s solution is “bring back real competition to the telecom industry.” Unfortunately there is hot competition between the telecoms—AT&T, Verizon, Comcast, TimeWarner, et al. They are in fierce competition to cheapen customer support by sending thousands of service and technical support jobs overseas, often with tax incentives. (That was barely mentioned in the presidential contest. Telecoms contribute to both parties.) If performed stateside, those jobs would benefit American consumers: Create more jobs for American workers, improve the economy, and result in better service for American consumers.

To expose how telecoms ship jobs away, the subject would be refreshed by sharpening the label: Put the words together—offshored outsourcing or outsourced offshoring or—if it must be a single word—just plain offshoring. Outsourcing by itself is too cool. Let’s heat things up!

Forcing American consumers to search for service in the Philippines or India lowers costs for telecoms, but consumers get neither savings nor better service.


*See NYT for 28 Nov 2012, page A33.

David Cay Johnston is the author of The Fine Print: How Big Companies Use “Plain English” To Rob You Blind.



Comments are closed.