Phone Service Has Gotten Much Cheaper

See More Things Are Getting Better (or There's No Great Stagnation): Phone Service by Steven Horwitz at "Coordination Problem." He does some great analysis on the cost in terms of the number of hours we have to work to get a given level of service. There is a also a summary table of cost comparisons over time. Excerpts:

"First, the most basic level of phone service is cheaper today, in terms of labor time, than in 1994. Of course what counts as "basic" has increased significantly. Most notably, "basic" today includes free long-distance. Put differently, that $25 landline plan is probably much closer to the average landline bill than the $19.81 of 1994 was to the $61 average because the latter included all the various toll and long-distance charges. So for what amounts to less labor time, a landline phone today delivers a considerably better product.

Ok, says the critic, what about cell phones? So suppose we add the most basic calls-only cellphone plan on top of that landline (note that I'm ignoring pre-paid or pay-as-you-go cell plans). That's another $40 per month, bringing us up to $65/month, which, assuming our cell customer does not go over her minutes, is roughly the average nominal phone bill in 1994. If we make the labor time calculation, the combo of basic landline and basic cell is cheaper today than in 1994. And if we make it, instead, the entry level Verizon family plan, our typical household is paying $94.99 for phone service (both landline and two cell lines). That is still cheaper in terms of labor time than was the average residential phone bill in 1994.

We can also look at this comparison in terms of percentages of median household income. The combination of a landline and a basic cell package is a smaller percentage of median household income (using 2009 data) than was the average residential phone bill in 1994. If we substitute the Verizon family plan for the basic cell package, the percentage of median household income is nearly identical to the average residential phone bill from 1994. So no matter how you slice it, "typical" phone service today is, at worst, equal to the cost of such "typical" service in 1994 if you look at median household income, and cheaper if you do the labor time calculation."