Corruption Responsible for 80% of Your Cell Phone Bill

By Matt Stoller posted Apr 9th 2012 at 1:45PM

Last year, a new company called Lightsquared promised an innovative business model that would dramatically lower cell phone costs and improve the quality of service, threatening the incumbent phone operators like AT&T and Verizon.  Lightsquared used a new technology involving satellites and spectrum, and was a textbook example of how markets can benefit the public through competition.  The phone industry swung into motion, not by offering better products and services, but by going to Washington to ensure that its new competitor could be killed by its political friends.  And sure enough, through three Congressmen that AT&T and Verizon had funded (Fred Upton (R-MI), Greg Walden (R-OR), and Cliff Stearns (R-FL)), Congress began demanding an investigation into this new company.  Pretty soon, the Federal Communications Commission got into the game, revoking a critical waiver that had allowed it to proceed with its business plan.