JEFFREY BROWN: Now: What's behind all those charges and fees that make up your monthly cable and cell phone bills?
NewsHour economics correspondent Paul Solman recently took a look at the fine print with writer David Cay Johnston.
It's part of Paul's ongoing reporting Making Sense of financial news.
PAUL SOLMAN: Cell phone bills up 31 percent, on average, since 2009.The average cable TV bill nearly tripled over the last decade.Electric utility rates climbed five years in a row, the biggest run-up since the 1970s.
And the cost of actually paying the bills?Also going up, as banks hike monthly fees for checking, ATMs, overdrafts.
It's all chronicled in "The Fine Print," a new book by Pulitzer Prize winner David Cay Johnston, who argues that large corporations, with government as accomplice, have rewritten the rules at the expense of small businesses and consumers like you and me.
When you signed a credit card agreement, for example, did you know this?
DAVID CAY JOHNSTON, Author, "The Fine Print":You give up your right to sue if something goes wrong.
PAUL SOLMAN: That, in bank disclosure agreements covering bounced check fees:
DAVID CAY JOHNSTON: The markup could be, as I show in my book, 470,000 percent.
PAUL SOLMAN: But Johnston's favorite examples come from the telecom industry.
DAVID CAY JOHNSTON: This is my latest monthly Verizon wireless bill.One of my favorites is the access charge, FCC access charge.
PAUL SOLMAN: Right.I never figured out what that was.
DAVID CAY JOHNSTON: Well, it sounds like the FCC, the Federal Communications Commission, is charging you a fee.No.The government doesn't get a penny of that.That's the charge for connecting to long distance.
PAUL SOLMAN: Connecting to long distance lines that have been up for decades, but that companies like Verizon charge for access to.But that's far from the only non-obvious item on the bill.
Fed universal service charge, regulatory charge, administrative charge, gross receipts surcharge.Some of the amounts are small enough that you go, well, I'm not going to complain about a 59 cent federal access surcharge, you know.
DAVID CAY JOHNSTON: But here's a little thing to think about that.If you could get everybody in America to pay you one penny a day, at the end of the year, you would have $1.1 billion.
If you can get a dime, you're going to have $11 billion at the end of the year.If you can get a dollar, you are going to have over $100 billion.
PAUL SOLMAN: This is finally how we're going to be able to support the NewsHour.We will get each of you to send a penny and...
DAVID CAY JOHNSTON: But that's the trick.You have got figure out how to get everybody to give you that penny.And the best way to do it is, if you're already billing them, you find ways to stick in all these extra little charges.
PAUL SOLMAN: It didn't always used to be this way.
Here, for example, is a Scranton, Pennsylvania, electric bill from 1937, back when public utilities were strictly regulated.
DAVID CAY JOHNSTON: It's a very simple bill.It's not even a full page of paper.
PAUL SOLMAN: Right.
DAVID CAY JOHNSTON: And it has the account number, the dates that are covered, the meter reading -- this person used three kilowatts of electricity -- and the price written down here at the bottom.
PAUL SOLMAN: Today's bill, by contrast, this one from Phoenix, Arizona, has 22 line items.
DAVID CAY JOHNSTON: There's a charge for metering.Every month, they're going to charge you for the meter.There's a charge for the bill, $1.86 just for preparing your bill.
There's an environmental benefit surcharge, a competition rules compliance surcharge.So we're going to have competition in the market, and you're going to pay to have competition in the market.
PAUL SOLMAN: Competition, of course, is one of the goals of deregulation.
DAVID CAY JOHNSTON: But the kinds of profits that we're seeing today, those do not reflect market competition.They reflect the defeat of competitive markets.
PAUL SOLMAN: Dramatic case in point, says Johnston, the cable television industry.
You write about Glasgow, Ky., and what happened when the town tried to provide its own cable service.
DAVID CAY JOHNSTON: Glasgow was facing very, very high prices from its monopoly cable company.Just to get a handheld remote was five bucks a month.And so they decided to build their own system.
Well, immediately, they were sued, and finally it got before a federal judge well-known for his very conservative views who listened to the complaint of the cable company and leaned down over the bench and said, sounds like you don't want to have competition down there in Glasgow.
Well, that system which has been upgraded twice now has saved people in that town about $3,000 each over the last 20 years.
And the fastest Internet in America is found in those cities where the city fathers built the Internet for their community, just like city fathers in some places built their own electric system when the big utilities wouldn't pay any attention to them in the late 19th century.
PAUL SOLMAN: Now, all this is strong stuff, so strong that we sought out the other side, the cable industry itself.
Michael Powell, head of the Federal Communications Commission under President George W. Bush, is now president of the National Cable Television Association.
MICHAEL POWELL, National Cable Television Association:Many of these state-owned local utilities have often failed because of financial hardship, and rarely are offering speeds faster and cheaper than what's provided privately.Even in Glasgow, Ky., the top speed is only six megabits per second for $36.That's hardly exceptional and certainly no better than what's being provided in the private market.
PAUL SOLMAN: Where average speeds are three times as fast, claims Powell, and prices are falling, not rising.
MICHAEL POWELL: The price per megabit per second has decreased 87 percent since 1999.In fact, in 2010, the Federal Communications Commission conducted a survey of American citizens, and 93 percent of respondents said they were very satisfied with their broadband experience.
Many cable companies have recently announced very substantial increases in speed with no accompanying increase in price.So the evidence suggests that consumers are getting a real value in broadband in the United States.
PAUL SOLMAN: But Johnston doesn't buy Powell's megabit average, says, if people do say they're satisfied, it's because they don't know what they're missing or how much less they could be paying, because, his key point, there's so little competition.
DAVID CAY JOHNSTON: I have in my House something called a Triple Play package.You get Internet, telephone and cable TV.
PAUL SOLMAN: Right.I have that, too.
DAVID CAY JOHNSTON: And I pay for the basic service with taxes $160 a month.
PAUL SOLMAN: Yes, that's about what we pay.
DAVID CAY JOHNSTON: If you go to France, you get the same package for the equivalent of $38 a month, and you don't get two-country calling.You get worldwide calling to 70 countries.You get live TV from all around the planet and your Internet is 20 times faster uploading and 10 times faster downloading.
PAUL SOLMAN: And why is this?
DAVID CAY JOHNSTON: Because they have set up a different system.They want to have universal service.
STUDENT: Hey, why should I be on the Internet?
PAUL SOLMAN: Although they didn't call it that, universal service, high-speed broadband for all, was the dream of these Montana fifth-graders back in 1995, when the World Wide Web was in its infancy.
STUDENT: By the time we're in college, the Internet will be our telephone.
STUDENT: Shopping center.
STUDENT: And workplace.
PAUL SOLMAN: Today, about a quarter of Montanans still don't have broadband access, and neither do 19 million Americans, most, but not all of them, in rural areas.
DAVID CAY JOHNSTON: We paid $360 billion of rate increases to Verizon and AT&T and the other big telephone companies, and we paid well north of $100 million more to cable companies in rate increases.And they were supposed to create the system.
PAUL SOLMAN: By laying fiberoptic cable everywhere.
DAVID CAY JOHNSTON: Everywhere, that's right.And instead they're laying it only where they want to.What's the value to our society of having everybody interconnected vs. the profits the companies can make by saying, no, we're just going to serve the most high-profit areas and ignore the rest?
PAUL SOLMAN: Verizon and AT&T declined our interview requests, but, says the cable industry's Michael Powell:
MICHAEL POWELL: Cable modem service is available in this country to 93 percent of Americans.We serve all of our communities, whether rural or poor.There's absolutely no evidence that we separate the availability based on profitability.
PAUL SOLMAN: But Johnston points to his own experience in Upstate New York as a counterexample, as compared to, oh, Bulgaria.
DAVID CAY JOHNSTON: We invented the Internet, so we started out at number one.We're now 29th and falling, and we're behind places like Lithuania and Bulgaria.
PAUL SOLMAN: And, thus, Johnston's controversial bottom line, that reading the fine print would show just how anti-competitive America has become.
DAVID CAY JOHNSTON: I'm not against corporations.I am in favor of rules that promote competition, that prevent monopolies and duopolies, that make you earn your profits in the competitive market; you don't get them through a government rule that lets the company reach into your wallet and take money.
PAUL SOLMAN: David Cay Johnston, thank you very much.
DAVID CAY JOHNSTON: Well, thank you.
JEFFREY BROWN:And Paul found one more example of fine print you may not know about: in your paycheck. You can find out about that online.