David R. Henderson  

Verizon Victory!

How long can the China boom co... Lies, true lies, and statistic...

Last week I posted about my very upsetting experience with Verizon. A few days later, a regular reader of EconLog, who tells me he has learned a lot from reading EconLog, wrote me about the issue. He has a fairly high-level position at Verizon and told me that he basically agreed with me that Verizon had handled it badly. He asked me if I would give him our two cell phone numbers so that he could pass them on to someone who could make things right. I did a little due diligence first and found out he's a real person who is who he says he is. So I gave him the numbers. (Later he sent me some testimony in which he had used, and used correctly, the Thinking on the Margin Pillar of Economic Wisdom that I have posted about.)

A few minutes ago I got a call from Sarah at Verizon. She agreed with me that by lining up the $40 per month per phone service in advance, I had done what I needed to do to actually get that service and not get the more-expensive one that I had explicitly rejected and that I was being charged for. She noted that I had had my bill reduced by $50, leaving me paying $30 too much. She said that Verizon would go ahead and refund (I paid 2 days ago) the other $30 and, in addition, refund me the $80 that I had paid for the service.


Question for the commenter (I'm looking at you, James) on the previous post who said that because of this experience I should favor more government regulation of cell phone companies: have you ever had this kind of generous responsiveness from the U.S. Postal Service, which is the ultimate in government regulation because it is a government agency?

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COMMENTS (13 to date)
Jon Murphy writes:

Excellent to hear!

Anthony Juan Bautista writes:

I used to generously save mariners from imminent death/loss of property (with regularity) when I was an officer in the US Coast Guard. A govt agency. I Lol the Libertarian worldview.

Dylan writes:

I'm not James, but I've had much more generous responsiveness from the USPS than you had in this particular case from Verizon. I've also had worse. However, my worst experiences by far have been in trying to get responsiveness out of the local internet monopoly. Just trying to get service setup every time I move is a major ordeal, that inevitably takes weeks of missed appointments and days off work, and that is nothing compared to what you sometimes have to go through when something goes wrong.

I personally wouldn't chalk your Verizon experience up as a victory for the free marketplace, since it seems pretty unlikely that you would have gotten this same response if you were not in the position you are, where this post had a better chance of reaching a person who could intervene on your behalf. If you were in a more normal position, it feels likely that you probably would have made do with the $50 credit and not gotten everything you were due. Doesn't mean I favor government regulation, because I have trouble imagining what regulation could make the situation better instead of worse, but it does mean I do my best to minimize relationships with monopolists or former monopolists whenever I can.

Tom Jackson writes:

I seldom disagree with David, but this isn't, in fact, a good example of how the free market is better than the government. "Knowing somebody" is EXACTLY how you get a problem fixed with a government agency.

In fact, it's part of the system. Smart members of Congress know that constituent service is an important part of the office. It's part of the reason why it's so hard to get rid of incumbents. After awhile, there are lots of constituents who remember that the congressman intervened to help fix a problem.

It has been my experience that private companies keep their promises more often than politicians, and I think that's a better argument.

James writes:

I see lots of people claim that regulations are a big part of why markets work as well as they do. I see very few of these people acting like they believe it.

I wonder if there is anyone who would seriously entertain the notion that the Verizon employee who interceded was only trying to correct the problem before some regulator got involved.

P.S. I am a different James.

Bill Workman writes:

Have you estimated your hourly wage for the time you invested resolving this issue?

James writes:


I'm sure most libertarians also "lol" the worldview you call libertarian. Because that worldview is not what actual libertarians believe.

Yaakov Schatz writes:

I had a similar issue with a telephone company in Israel. They messed everything up and were only willing to compensate me in free dialing time. I sued them and waited for them to call. After a while their lawyer called and we compromised for over $100 in compensation. I do not think it was worth it. They got me really angry and I did not obey the rule of no shouting.

As to your comparison to the US postal service, that is an unfair comparison. I think it is widely agreed that governments give rotten service. The issue now is whether private companies will give better service when regulated by the government or by the markets. That is a much harder issue to convince people about because they are not comparing government service to private service, but rather government regulation service to no service.

Phil writes:

Yes, I have have had that experience with the USPS. They misinterpreted their own regulations and tried to charge me a parcel rate for what was actually a non-machinable letter (roughly $2.40 versus $0.70.). As soon as I pointed out the error to the front line clerk (not the third or fourth tier person you dealt with at Verizon), the clerk apologized and actually pulled the difference out of his pocket. Rather than have the government employee suffer personally from his organization's poorly written rules, we split the difference. I have not had the same problem recur.

Mike W writes:

in addition, refund me the $80 that I had paid for the service.

Does this mean you paid nothing for the service?

That would hardly seem to be representative of a victory for the free market. Verizon likely isn't going to now change the billing policies that gave rise to your complaint. Nor does it seem likely it will go back and compensate others with the same experience in the same manner as you were compensated.

Your experience seems to be more representative of the sort of cronyism that exists in authoritarian economies like China...i.e., special treatment for insiders and powerful elites that is not available to the general population.

Glenn Wolf writes:

When I had a problem with Verizon, I simply dropped them and went to another carrier. That's the free market in action. If they failed to do what they said they would do, you have a valid breach of contract claim. Years ago, when my carrier (not Verizon) stopped unlimited plans, I told them that the contract I had signed was for unlimited service and that they couldn't unilaterally change it. In the end, I was able to keep my unlimited service until years later when they finally insisted that I give up my unlimited service at which time I left.

J Mann writes:

My main gripe with Time Warner Cable, now Spectrum is that their service is too reliable. I would like to try out our local phone company's internet, but TWC has been so rock solid - maybe two internet failures in several years - that my wife refuses to allow us to switch.*

I wish they'd turn off their copy protection so I could use a decent PVR setup, and I think that the only reason they let me use a cable card is regulation, but all in all, their reliability is my biggest complaint. Also, their phone and in-store service is excellent.

* Technically, she says that any internet failures after the switch will be held against me personally.

Stationary Feast writes:

While I'm happy for you that you eventually got Verizon to stick to the terms of what they agreed to initially, "a friend in a high place was able to sort things out for me eventually" is a textbook example of an aristocracy of pull. I'm baffled how you can turn this into a pro-free-market anecdote.

I'm sure if the USPS screwed something up and was similarly intransigent until a high-ranking postmaster intervened on your behalf, that wouldn't be a convincing argument for having a national post office.

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