Monday, February 25, 2008

Opposition to FCC Petition

( Below is my written testimony to the FCC concerning a petition submitted by South Seas Broadcasting Inc. to mandate that cell phone companies apply their domestic long distance rates to American Samoa.)


I'm not going to pretend that I'm a telecommunications expert, but I believe a few basic assumptions apply to market prices of cell phone calls to our territory. I assume the market is open to anyone to provide services. I also assume that one makes the most money by having the largest consumer base as possible. If my assumptions are wrong, please explain to me why.

Competition and the profit motive drive prices down, so why do we have this FCC petition to force cell phone companies to apply domestic rates to our territory?

Is it because we're Americans too? Is that the standard for setting prices? Your ethnicity, race, or nationality?

Is it because cell phone companies and their stockholders are "greedy"? When I think of that word, I imagine savage cavemen with clubs drooling at the mouths over piles of cash. Or fat men slobbering and chomping down on a chicken drumstick laughing all the way to the bank.

Instead, what you're likely to see at cell phone companies are professional men and women working hard and being accountable to their customers. They are fathers, mothers, members of the community. Their stockholders are also likely to be hard working people putting in their life savings through 401k's to earn the highest returns possible for retirement. The word "greedy", however, wipes that all away.

Who knows, maybe our oft-raided ASG Retirement Fund is invested in these companies? Surely, our retirees want the most profitable return as possible on their -­ I'm sorry -­ the Fono's money.

Or is it just perhaps that our markets are different?

I got an idea. An ad rate at KABC-AM in Los Angeles is $1083 for a 30- second spot. Pretty expensive, yeah? But consider this: the population in L.A. is close to 10 million people (2006 est.). That's 0.0001083 cents per potential customer. Let's say radio advertising in American Samoa goes for $100 for a 30-second spot. Pretty cheap compared to L.A.? But for 60,000 potential customers, that's 0.00166667 per potential customer. That's 15 times more than what they're charging in the mainland. That's price-gouging!

If anything, the FCC should look into the pricing practices of radio stations in American Samoa. And why stop there? We're a democracy where the majority rules. Anything and everything is up for a vote. Individual rights don't exist, and you definitely don't have the right to price your property as you see fit.

If the FCC doesn't uphold individual rights then perhaps its license should be revoked.

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