COMMUNICATIONS The costs of connections
Spending on cell phones and Internet service keeps going up.
By DEB KOLLARS
One afternoon recently, Mike and Susan Riegel and their son, Jess, sat at the table with the latest monthly cell phone bill spread before them.
It was $132 -- $40 more than expected -- and the family was doing what families do in such times: Squinting at the rows of numbers, trying to figure out who had done all the talking.
The son solved the mystery:
"I went over 40 cents."
"Dad went over $2.50."
"Mo-om? You went over $37.50."
Ah, the price of living in a communications wonderland.
Just a few years ago, a family might have spent $50 or so for telephone service each month, maybe more if they were big long-distancers. Today, with the explosion of telephone, wireless and Internet options, a household such as the Riegels' can easily spend $200 or more a month to stay connected with each other and the world.
On the one hand, it has never been easier for people to stay in touch, thanks to e-mail, voice mail, text messaging, instant messaging, phone cards, free nights and weekends, and cell phones that work even on mountaintops.
On the other, we are paying quite a price -- financially and otherwise -- for all this conversation.
Between 1993 and 2003, annual household telephone and Internet costs in the United States rose from an average of $658 per year to $1,080 -- a 64 percent increase, based on a review of consumer expenditure patterns logged by the federal Bureau of Labor Statistics.
By comparison, among other major categories tracked by the bureau during those same years, average annual household spending on food rose 21 percent, entertainment 27 percent, health care 36 percent, housing 40 percent and alcoholic beverages 46 percent. Spending on apparel dropped 2 percent.
"We've had an explosion of telecom items to spend money on," said Dan Jester, an economist with Economy.com, a consulting firm based near Philadelphia.
Explosion is a good term for what has happened in the telecom industry. Ten years ago, just 6 percent of households had Internet service and 16 percent had wireless service, according to an annual national survey by the Yankee Group, a technology research firm in Boston.
Last year, the survey found 66 percent of households had Internet service and 65 percent had wireless. The Yankee Group found an even higher average expenditure rate for telephone and Internet services than the Bureau of Labor Statistics: $153 a month as of 2004.
The rush to connect carries a price beyond the financial. Parents worry about their kids spending hours at the computer sending instant messages back and forth to friends -- or maybe strangers. Classroom teachers have students more interested in camera phones than lessons. Cell phones ring in the middle of movie theaters, restaurants and even funerals.
Tori Trask, a marriage and family therapist for Kaiser Permanente, said she has seen increased family conflict over unexpectedly high bills and parental attempts to set phone and Internet limits for children.
She also worries about those who can't bear to turn off cell phones during therapy sessions.
"Don't get me wrong," she said. "I think technology is wonderful. But this kind of constant connection can be addictive."
The need for high-speed
The telecom wave is reminiscent of the changes that swept the world of television, starting in the 1970s. Cable. Premium channels. Satellite. Videos. Viewed as luxuries early on, they soon became entertainment staples, said Yale M. Braunstein, a professor of information management at the University of California, Berkeley.
"Everyone wondered how people would be able to afford it," Braunstein said. "But they kept adding channels, and people kept buying them."
Similarly, he said, communications services once seen as optional pleasures have become necessities for many.
The Riegels are a quintessential example. The family lives in a rural corner of Granite Bay, Calif., on a generous plot of land.
Six years ago, the Riegels had a single Pacific Bell phone line coming into their house, and four phones. Their monthly phone bills ran high, often reaching $125. They made long distance calls to family in the San Francisco Bay Area, and also paid long-distance rates on most local calls because of their rural location.
It was 1999 when the Riegels first dipped their toes into the telecom abyss. Their first cell phone was a heavy gray model that they shared. They paid $50 a month for the convenience.
The next year, their high school daughter, Alli, wanted to use the Web for school research. That's when the second phone line appeared (about $12 a month more) and a dial-up Internet service (an additional $20 or so.)
Soon came a fax machine. A cell phone for Alli when she started driving. New cell phones for the other three and a sensible family plan. Call waiting. Caller ID. Four more portable phones. A faster wireless broadband Internet service. And most recently, phone cards to keep in touch with Alli, now 20 and studying in Italy.
Together, the bills total about $2,500 a year. At that pace, the Riegels will spend $25,000 over the next 10 years staying in touch.