Help Us Reform the FDA!
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Would You Tolerate This Abuse?
by William Faloon, CEO, Life Extension Foundation
Americans needlessly die while scientific discoveries that could save their lives remain trapped in bureaucratic red tape. There is a solution to this travesty. Allow free market innovation into the health care arena, and the development of new medical therapies will progress as rapidly as other technologies.
Do you remember how expensive long distance phone calling used to be?
Back in 1980, archaic federal rules enabled the original AT&T to control national long distance dialing. You could recognize a long distance call by the hissing and crackling noise heard before the caller spoke. High-speed internet and mobile phone connections were not available.
In 1980, the Life Extension Foundation was in its infancy. Making long distance calls during the day was unaffordable to us. We waited until after 5:00 PM to make brief long distance calls. For calls that involved a lot of talk time, we scheduled these after 11:00 PM (or on weekends) when rates were at their lowest.
By 1982, we needed to install a toll-free “800” line, but feared the high cost. The 50-cent per minute rate caused concern that we might not be able to afford the monthly bill. Factoring in inflation, 50 cents in 1982 is equivalent to $1.16 today. That meant that if our 800 line was used just four hours a day, the monthly cost would be $6,960 in today’s dollars.
Consumers Fought Back
There was quite a debate around 1980 as to whether consumers would benefit if other companies were allowed to compete in offering long distance services. AT&T heavily lobbied Congress arguing that all kinds of terrible problems would occur if it lost its monopoly.
AT&T pointed to its stellar record of scientific advances and threatened that if it could not charge its monopolistic rates, then further improvements in communications technology would be hindered. AT&T’s track record for scientific prowess gave them a strong argument.
Fortunately, free market theory prevailed and AT&T was forced to relinquish its stranglehold over long distance calling in the United States. The transition was by no means smooth. The initial long distance competitors’ services were clearly inferior to AT&T. We at Life Extension found it frustrating to initiate long distance calls over these discount carriers’ networks. One newspaper columnist complained that he was tired of being solicited by these substandard discount carriers and wanted the government to reinstate AT&T’s monopoly.
How Times Have Changed
Anyone who has paid attention to long distance rates over the past 28 years appreciates the enormity of the benefit brought about by abolishing AT&T’s monopoly.
Consumers used to pay over 60 cents per minute for daytime long distance calls (equal to $1.39 per minute in today’s depreciated dollars).1 Can you imagine if you had to pay $250 for three hours of long distance calling? This would be unthinkable today where for under $40 a month, you can have an unlimited long distance service that usually includes local connection charges.
Consumers today save a whopping 84% compared with 1980, even if they only make three hours of long distance calls a month. Unlike AT&T’s threats of technological stagnation, the quality, reliability, and speed of today’s long distance phone service are vastly superior.
As far as Life Extension’s toll free service, our rate has dropped to 1.6 cents per minute. Back in 1982, we were paying the equivalent in today’s dollars of $1.16 per minute for inferior service. When adjusted for inflation, we are saving 99% compared with what we paid in 1982.