Value added Qwest wants to charge more for not providing information

Value added
Qwest wants to charge more for not providing information

Oct 6, 2001

Qwest is asking regulators to approve an additional monthly charge of $1 for keeping phone customers’ addresses confidential. That’s $12 a year to not include addresses in the phone book and not give them out through directory assistance. To reduce that equation to simpler terms, that’s $12 more for doing less.

Granted, distinguishing between those who want their addresses publicized and those who don’t requires a distinction in a database. Similar distinctions are now made for people who don’t want their phone numbers published in the phone book, as well as those who don’t want their numbers released at all. Presumably a small cost is associated with separating those sets of data; whether it amounts to $12 a year is certainly debatable.

Those customers who already pay $2.25 a month for Qwest’s non-published service (which withholds all their information from the phone directory and directory assistance) would not be charged more. Those who pay $1.80 a month for nonlisted service (which omits their information from the phone book but keeps it available through directory assistance) will have to pay $1 more to keep their name and phone number available in that way. The math is a little messy, and the rationale is as well. No matter what a customer wants, it seems to cost more.

The fee for which Qwest is seeking approval may reflect increasing concerns about privacy, and demands that businesses with the ability to gather a considerable body of information about us be responsible for the ways that information is used. The phone company, after all, knows who we call and who calls us. It knows to which numbers we have our calls forwarded, and it knows which calls we block. Its records also show what times we use our phone, which could be extrapolated to suggest what times we’re home or away. (It’s difficult to believe that information isn’t shared with long-distance-service telemarketers, who always seem to catch us at home.) As Qwest moves into the long-distance market, as it is seeking approval to do, it will have access to even more information.

As more consumers opt for privacy, Qwest wants to charge them to offset the revenue it cannot earn by releasing information about them. To most Americans, paying money to prevent the release of information smacks of blackmail, but privacy is a hot commodity, and one that many consumers may consider well worth paying for.

Whether utility regulators feel the same way is a separate question. Rate increases have traditionally been tied to rises in costs, and it may be hard for a phone company to prove that a function that can be performed with very few keystrokes is worth a surcharge. An jump in demand for the service may not be a compelling reason.

The whole concept of "value-added" marketing — taking a product you already offer and figuring out how to charge more for it — is a fascinating one, because it brings into considerable intangible values in addition to the basic costs of production, marketing and overhead. In the free market, demand dictates supply and price, but phone service is subject to regulation that other products are not. Still, we’re reaching the point at which only a small part of our phone bills can be attributed directly to telephone calls; a big chunk goes for services such as caller ID, call waiting, and now, perhaps, protection of privacy. Thus goes the world of communications: We pay the phone company for the connections we make, and we pay the phone company for blocking those we don’t want made.

It’s technological innovation at its finest, and capitalism at its most effective. That doesn’t mean that it’s an option that should be approved without some regulatory scrutiny.