Sic Semper Tyrannis

No, this isn't a riddle or a joke, though it seems you could hardly pick two more dissimilar aspects of the consumer economy. The short answer, put colloquially, is that "both suck, because both are far too expensive and rising in price rapidly".

But there is a deeper connection between the two, having to do with why they're so expensive and why they are both spiralling out of control in the United States. Of course, the problem with the health care (or health "insurance", as it is often inaccurately termed) complex is far worse, given the magnitude of that sector and its critical importance to human well-being. However, the structural similarities are eerie.

Follow up:

I've written before that the basic problem with the US health care complex is its only real distinction among developed countries: while it is largely "privatized" (certainly as measured by dollar share) it is in addition employer-centric. That is, for nearly all of middle class America (which is nearly all of America, though declining), your job is your health care. The appeal of this system is its simplicity and convenience. However, the "convenience" is false, and the miserable result of this system certainly undermines any attraction the supposed "simplicity" might have (though I think this is a bogus argument anyway).

What being employer-centric does to the US health care system is eliminate prices and hide costs. The bulk of health care premiums are taken from compensation "above the line" (in non-taxed benefits), so increases in them are nearly-invisible to workers, and the full extent of the cost is likely to be missed (workers are typically more concerned with the red herrings of their miniscule share of premiums and their co-pays). Further, since the majority of medical care is now "covered by insurance", health care professionals tend to ignore prices. In fact, they may not even have easy access to them. As a result of this, and of blanket coverage (even for trivial care), care-seekers also tend to ignore prices.

What has evolved is a system where wasteful expenditures tend to be originated excessively, cost improvements are shirked, and the brunt of the impact (primarily higher costs---though reduced coverage also factors in) is transferred from insurers to employers, who then ultimately lay the full burden on workers in a surreptitious (and arguably dishonest) manner.

It is, frankly, a really stupid system, that has disproven its hoped-for utility by collossal failure and the visitation of, literally, misery and destitution upon millions (much like other collossal economic failures of human organization, such as communism).

Now on to the part about cell phones.

The sector has been an annoyance of mine almost as many years as I've used a cell phone, due to what I feel are high costs and poor service. A few others have spoken out about the flaws in the system its expense (such as John C. Dvorak), though most people seem to have simply accepted cell phone-related expenses as a part of life and "necessary evil." There is a parallel here: most people have also accepted health care that costs 2-4 times what it did a decade ago, and increases in cost near or above double-digit rates per year, as "normal".

It is worth noting that routine costs consumers pay related to cell phones typically dwarf those related to the "land line" system, and this is somehow despite the fact that cellular, a radio-based technology, is not intrinsically more expensive than maintaining a vast ground network. No; something purely financial is at play here.

The cost of cell phones is soaring, yet these devices are really the same kind of consumer electronics that are supposed to be deflating year by year (e.g. televisions, cameras, or mp3 players). I was shocked when I went in to my provider's store recently and found that a mid-range phone, bought as a replacement for my current dismal piece of junk off my plan's schedule, would cost me $300. The high-end models are now in the ballpark of $500. My current phone, which was mid-range when I bought it, had a sticker price of about $150 nearly two years ago (the phone is a Motorola, by the way, and has displayed such a wide range of software and hardware bugginess that the company should be ashamed of itself. Of course, they won't be).

In fact, I suspect much of the cost of the cell phone complex is being borne "surreptitiously" by cell phone and accessory hardware charges, not necessarily monthly network charges, though these of course dwarf what is comparable for land lines.

I believe the reason this is happening with cellular is much the same as why it is happening to health care: the cartelization of the market, and concomitant misalignment of the cost structure. That misalignment is as follows.

In cellular, you are locked-in to a provider--just like the way you are locked-in with your employer's preferred provider(s) in health care. Cellular is falsely made to appear of reasonable cost by providing significant discounts on phone purchases, but only if a lengthy contract for a service plan is signed by the consumer. This hides the true cost of the hardware much of the time.

Next, all the cell phone networks provide technical lockout from one another. This serves the purpose of preventing consumers from buying hardware and using it on someone else's network. This in turn prevents cheap, commodity third-party hardware from emerging. This system resembles a number of aspects of health care, including how you can only realistically go to doctors that accept your plan, and how you cannot "cash out" your health care benefits and buy lower-cost third party service (either at the doctor or insurer level).

The result in cell phones is much the same as it is in health care: the cost of service gets higher; the cost of hardware gets higher, the service and quality remain poor (or even deteriorate, as I've experienced), and elaborate attempts are made to hide the costs from consumers and further restrict their choices (even going to the extent of lobbying government heavily to preserve the cartelization).

Like the health care sector, the cell phone sector could be "fixed" quite easily: make these retail "contracts" non-enforceable (they are not even remotely between equal parties), and more importantly, remove whatever legislative props are preventing hardware competition between the major service providers and hardware vendors (I'm thinking the DMCA here, but there are likely a host of arcane telecommunications rules that have created the cartelization we're experiencing).

Cellular should be deregulated: there should be no recourse if I anarchistically use third party/indie cell phone hardware on a major network. And the cudgel of the law should not be used to entrap consumers on these cellular "contracts", which are about as honest as subprime loans.