Free My Phone
Suppose you own a Dell computer, and you decide to replace it with a Sony. You don’t have to get the permission of your Internet service provider to do so, or even tell the provider about it. You can just pack up the old machine and set up the new one.
Now, suppose your new computer came with a particular Web browser or online music service, but you’d prefer a different one. You can just download and install the new software, and uninstall the old one. You can sign up for a new music service and cancel the old one. And, once again, you don’t need to even notify your Internet provider, let alone seek its permission.
Oh, and the developers of such computers, software and services can offer you their products directly, without going through the Internet provider, without getting the provider’s approval, and without giving the provider a penny. The Internet provider gets paid simply for its contribution to the mix: providing your Internet connection. But, for all practical purposes, it doesn’t control what is connected to the network, or carried over the network.
This is the way digital capitalism should work, and, in the case of the mass-market personal-computer industry, and the modern Internet, it has created one of the greatest technological revolutions in human history, as well as one of the greatest spurts of wealth creation and of consumer empowerment.
So, it’s intolerable that the same country that produced all this has trapped its citizens in a backward, stifling system when it comes to the next great technology platform, the cellphone.
A shortsighted and often just plain stupid federal government has allowed itself to be bullied and fooled by a handful of big wireless phone operators for decades now. And the result has been a mobile phone system that is the direct opposite of the PC model. It severely limits consumer choice, stifles innovation, crushes entrepreneurship, and has made the U.S. the laughingstock of the mobile-technology world, just as the cellphone is morphing into a powerful hand-held computer.
Whether you are a consumer, a hardware maker, a software developer or a provider of cool new services, it’s hard to make a move in the American cellphone world without the permission of the companies that own the pipes. While power in other technology sectors flows to consumers and nimble entrepreneurs, in the cellphone arena it remains squarely in the hands of the giant carriers.
The Soviet Ministry Model
That’s why I refer to the big cellphone carriers as the “Soviet ministries.” Like the old bureaucracies of communism, they sit athwart the market, breaking the link between the producers of goods and services and the people who use them.
To some extent, they try to replace the market system, and, like the real Soviet ministries, they are a lousy substitute. They decide what phones can be used on their networks and what software and services can be offered on those phones. They require the hardware and software makers to tailor their products to meet the carriers’ specifications, not just so they work properly on the network, but so they promote the carriers’ brands and their various add-on services.
Let me be clear: Any company that spends billions to build and maintain a wireless network deserves to be paid for its use, and deserves to make a profit and a return for its shareholders. Not only that, but companies like Verizon Wireless or AT&T Inc. should be free to build or sell phones or software or services.
What Is Needed
But, in my view, they shouldn’t be allowed to pick and choose what phones run on their networks, and what software and services run on those phones. We need a wireless mobile device ecosystem that mirrors the PC/Internet ecosystem, one where the consumers’ purchase of network capacity is separate from their purchase of the hardware and software they use on that network. It will take government action, or some disruptive technology or business innovation, to get us there.
To my knowledge, only one phone maker, Apple Inc., has been permitted to introduce a cellphone with the cooperation of a U.S. carrier without that carrier having any say in the hardware and software design of the product. And that one example, the iPhone, was a special case, because Apple is currently the hottest digital brand on earth, with its own multibillion-dollar online and physical retail network.
Even so, Apple had to make a deal with the devil to gain the freedom to offer an unimpaired product directly to users. It gave AT&T exclusive rights to be the iPhone’s U.S. network for an undisclosed period of years. It has locked and relocked the phone to make sure consumers can’t override that restriction. This arrangement reportedly brings Apple regular fees from AT&T, but penalizes people who live in areas with poor AT&T coverage.
Apple has also, so far, barred users from installing third-party programs on the iPhone, though the company announced last week it will open the phone to such programs early next year. (Web-based iPhone programs–those that run inside the Web browser–have been available from day one.)
These restrictions have rubbed some of the luster off the best-designed handheld computer ever made.
A few other “smart phones” sold primarily to businesses have been freer of carrier restrictions on third-party software and services than typical cellphones. But even these handsets, such as Palm Treos, Windows Mobile devices, and BlackBerrys, have been partly crippled by carriers in some cases.
As a technology reviewer, I have met with multiple small companies that had trouble getting their programs onto consumers’ phones without the permission of the carriers; getting that permission often requires paying the carriers. Sure, there are some clumsy workarounds that can evade the carrier barrier, but it’s nothing like the ability small software companies have had for decades to offer their products for installation on Windows or Macintosh computers.
We also need much greater portability of phone hardware. Because the federal government failed to set a standard for wireless phone technology years ago, we have two major, incompatible cellphone technologies in the U.S. Verizon Communications Inc. and Sprint Nextel Corp. use something called CDMA. AT&T and Deutsche Telekom AG’s T-Mobile use something called GSM. Except for a couple of oddball models, phones built for one of these technologies can’t work on the other. So that limits consumer choice and consumer power. If you want to switch from AT&T to Verizon, you have to swallow the cost of a new phone.
But the problem is even worse. The government didn’t require the CDMA companies to include a removable account-information chip, called a SIM card, in their phones. So, unlike people with GSM phones, Sprint and Verizon customers can’t keep their phones if they switch between the two carriers, even though they use the same basic technology. And, the government allows the GSM carriers to “lock” their phones, so a SIM card from a rival carrier won’t work in them, at least for a period of time. Techies can sometimes figure out how to get around this, but average folks can’t.
The carriers defend these restrictions partly by pointing out that they subsidize the cost of the phones in order to get you to use their networks. That’s also, they say, why they require contracts and charge early-termination fees. Without the subsidies, they say, that $99 phone might be $299, so it’s only fair to keep you from fleeing their networks, at least too quickly.
But this whole cellphone subsidy game is an archaic remnant of the days when mobile phones were costly novelties. Today, subsidies are a trap for consumers. If subsidies were removed, along with the restrictions that flow from them, the market would quickly produce cheap phones, just as it has produced cheap, unsubsidized versions of every other digital product, from $399 computers to $79 iPods.
The Federal Communications Commission is selling some new wireless spectrum that will supposedly lead to fewer restrictions for technology companies and consumers, but it’s far from certain that the carriers, with their legions of lobbyists and lawyers, will allow such a new day to dawn. Google Inc. is making noises about trying to bust open the cellphone prison, with new software and services, but that’s no sure bet either.
Remember Landlines?
We’ve been through this before in the U.S., though many younger readers may not recall it.
Up until the 1970s, when the federal government intervened, you weren’t allowed to buy your own landline phone, and companies weren’t able to innovate, on price or features, in making and selling phones to the public. All Americans were forced to rent clumsy phones made by a subsidiary of the monopoly phone company, AT&T, which claimed that, unless it controlled what was connected to its network, the network might suffer.
Well, the government pried that market open, and the wired phone network not only didn’t collapse, it became more useful and versatile, allowing, among other things, cheap connections to online data services.
I suspect that if the government, or some disruptive innovation, breaks the crippling power that the wireless carriers exert today, the free market will deliver a similar happy ending.
- Email me at mossberg@wsj.com.
Comments
Mossberg for president! This is smartest commentating I’ve heard about this sham the Wireless industry has over consumer.
Posted by Luis Calderon at October 21st, 2007 at 11:44 pmThere is nothing to add but, “Right on, brother!” I am skeptical that the current politicians will do anything, however, to break this monopoly. That would require leadership and vision, something that is in very short supply inside the Beltway. I’d have to make the assumption that Verizon and AT&T are going to be big contributors in this upcoming election, so unless a wildcard like Gore were to come along, we can, unfortunately, count on the Russian ministries being around for some time to come.
Posted by Ron Lockhart at October 22nd, 2007 at 4:18 amWalt, you are wrong. The networks out here in the U.S. aren’t robust enough to allow unfettered access to them. All that dark fiber coupled with a healthy infusion of switching hardware would go pretty far to bring our cell networks up to speed, but that just isn’t going to happen anytime soon. As it stands, this “backward, stifling system” can really be more accurately described as a “fragile, crappy system” which gives the carriers carte blanche to legitimately lock their networks down in such a seemingly criminal manner. Whenever the regulatory bodies get involved asking the same question you’re asking, the carriers have this great answer, “open-access will break the network.” And they aren’t lying. They’re just going out of their way to make sure the network will break.
Posted by Kevin Hallaian at October 22nd, 2007 at 4:39 amI have been wanting to say this for some time - thank you. It is absurd that these companies can not keep your loyalty by providing better service. In some situations service contracts make sense, but when the only reason for such a thing is to prohibit you from switching to a competitor, you have to ask yourself some serious questions.
Posted by John Alessi at October 22nd, 2007 at 4:42 amI personally do not understand why carriers still have to sell locked devices with contracts. Surely the customers will have to stay on with the carrier for at least 12 months anyway, and it doesn’t matter what device is used then. Maybe this is a dirty way to gain more customers through the second-hand market, as many people sell their cheap upgrade (and usually locked) phones through ebay these days.
Confident carriers such as O2 UK do not lock most of their phones (of course, iPhone being the exception) due to their reputation. All carriers should see this as a great way to attract potential customers as unlocked phones are generally preferred by the public, as we all know, and that there should be no disadvantages for the company if they are able to provide good service at reasonable cost, therefore gaining more loyal customers who will stay on with their unlocked devices. Also, the money and labour required to unlock phones for the customers by request are just a waste of resource, so why bother locking in the first place?
Posted by Richard Lai at October 22nd, 2007 at 4:55 amI’ve certainly read a lot on this topic, but one question never seems to be answered.
What can I do?
Posted by Matt Ortiz at October 22nd, 2007 at 5:39 amThanks, Walt, for using your soapbox to write intelligent commentary on a very real problem. I have never felt, as a consumer, that the wireless carriers cared about me, their customer, at all. I am now on my 3rd carrier, so I have experienced a few.
To reiterate a previous readers comment, what can we do?
Posted by Steve Seremeth at October 22nd, 2007 at 5:43 amA thoughtful, accurate assessment of the status quo.I travel a great deal, and I see this huge difference between the US and the rest of the developed and developing world firsthand. Now, what is the best approach to changing the status quo? Should it be political, a consumerist “backlash” or some other medium needed to convey your message? Your help is essential, Mr. Mossberg.
Ishan Bhattacharya, MD
Posted by Ishan Bhattacharya at October 22nd, 2007 at 6:47 amAs great as this rant is you are wrong on one very important point. Apple was not forced to lock their phone up with AT&T, they chose to do it. They reaped a huge contract with millions of dollars up front and a share of revenue for years to come.
Apple could have released their iPhone unlocked and too the masses and it would have sold. Instead they chose to lock their customers in and treat them like crap, a policy which Apple is known for.
Just look at the iPod+iTunes. They want you to buy locked content to put on your locked device. Have you ever tried to take content off of an iPod? It is a pain and requires alot more work than it should.
Cell phones should be free (unlocked) and as long as the carrier supports the technology the phone uses you should be able to use it with the carrier of your choice.
Posted by Steve De Chellis at October 22nd, 2007 at 7:00 amWhat it all really amounts to is RACKETEERING. What the FCC should do is reclaim the spectrum, even if they have to pay a settlement, and set aside certain parts for cellular and create an open and shard network, where anyone could open a cell phone service company. Increased competition equals better for the consumer. Of course, the cell phone service companies will have to pay lease fees for using other companies towers, but they could also build their own, if they so choose. Right now, cellular operates under a thin facade that really conceals a criminal racket.
Posted by rod sandcones at October 22nd, 2007 at 7:54 amHmm… Maybe Apple shouldn’t have sold iPhones at all — maybe they should have just let AT&T lease them to customers; you know, like your cable box. Then there would be no complaints.
Posted by John Haumann at October 22nd, 2007 at 8:20 amAs much as I hate the bundling and locking practices of the mobile companies, I think you are wrong about this. Consumers today are free to buy whatever GSM phone they can find and use it on the AT&T or T-Mobile networks. They’ve simply chosen to be cheap. For example, The Nokia N800 and N810 are sold directly by Nokia, unlocked, for about the same price as an iPhone, and there is any number of web sites that will sell you an unlocked GSM phone from overseas.
Consumers have instead chosen to save the money on subsidized handsets. I don’t like it, but it seems to me that in the face of the choice, consumers simply don’t care about subsidies.
I think that your call to have the federal government intervene in the bundling practices of the companies is just wrong. Unlike in the old landline system, the competition between cellphone carriers is cutthroat (and the old landline monopoly was imposed and sustained largely by Federal legislation). In fact, the carriers do compete on unlocking and openness, a little. T-Mobile, for instance, freely unlocks a phone after 3 months on request. Some marginal consumers love this, but again, most people just plain don’t care. In fact, I would wager that most people *prefer* to have a single company responsible, especially if it’s cheaper (one neck to wring and no finger-pointing after all).
(Now, what I can’t fathom is why Apple made this deal with AT&T. Why couldn’t they have gone the route or selling unlocked GSM phones? Not for Visual Voicemail. The handsets themselves after all aren’t subsidized. Perhaps it was just a mistake by Apple.)
Finally, I think it’s a bit of a cheap shot to suggest that the US phone system is the laughingstock of the world. Yes, in some ways we have thinner coverage or slower data speeds, though this could be mostly a function of population density. But regardless it’s not *that* much different from all of Europe. And the handsets available aren’t *that* much different. I certainly don’t see any great handset or network innovations in France. Remember, both the BlackBerry and the iPhone grew out of the US market. And I don’t know what miracle devices they have in Korea and Japan, but even if they are more than press releases and demos, you have to remember that the Japanese and Korean mobile networks are just as closed as the US one.
Posted by Gerald Kanapathy at October 22nd, 2007 at 8:26 amWhat I don’t understand is why the market hasn’t responded to customer needs and wants. The only company I truely see doing this is Nokia. I had to buy an E61 (european version) because the us version, the E62 was slower even though it has a faster processor and devoid of wifi because AT&T seems to thing people won’t use data service. Well I don’t, not for their rip off prices based on what they consider a “smartphone”. I use the unlocked E61 on tmobile, and pay the for $5.99 data plan even though I have wifi, oh and GPS. Heaven forbid people have both technologies AT&T. The cell makers are also to blame for being scare to innovate. Make a good unocked phone and I’ll buy it.
Posted by sherman hensley at October 22nd, 2007 at 8:32 amApple had no choice. They had to go with one carrier to break in. That they did it is nearly a miracle. Verizon turned them down. And we all know how bad Verizon is with Bluetooth, preventing moving files from a computer to the phone, etc.
AT&T was obvsiously the only company even slightly willing to give up some control. They were smart to do it. Now they should be smart and listen to Walt. The first carrier to open up will get my business, regardless of T-Mobile’s anti-consumer $200 penalty for leaving.
Posted by Eric Welch at October 22nd, 2007 at 8:42 amGreat article. The cellphone industry is extremely restrictive in the US, and as mobiles become a bigger part of people’s lives just as computers and the Internet have, the US is setting itself up to be left behind.
Where the other nations are embracing openness and transparency, the US is eschewing both.
I don’t even mind the fact that Sprint and Verizon phones don’t come with R-UIM cards. I just want them to recognize each other’s phones and be able to “activate” (what an archaic word) them on the network.
Right now, if you buy a phone that is GUARANTEED to work with Sprint (a Helio or Qwest phone) you can not use it on Sprint’s native network.
On T-Mobile, useful applications such as Google maps and Gmail and Opera Mini don’t work because T-Mobile restricts network access no matter what plan you have.
On AT&T, phones routinely come crippled. Verizon is the absolute worst, installing its own ugly OS on every phone it sells.
Posted by Mark Larson at October 22nd, 2007 at 9:33 amPerhaps, one should realize that the “regulators” are in bed with the “regulated”. The gooferment is in business to (1) feather its own nest; (2) rewards its “friends”; and (3) punish its “enemies”. Our needs and expectations are not even on their radar. If you think it is a “kinder gentler” form of fascism, then I won’t disagree. The FCC, and the “competing” cell phone companies is a sweet cartel. It’s time for the peasants to get out the pitchfork and torches and administer a little “rough justice”.
Posted by ferdinand reinke at October 22nd, 2007 at 9:40 amI heard Sen. John McCain (at one of your conferences, I think) declare that he is not aware that the US is lagging in cell phone technology. McCain is a ranking member of the Commerce, Science & Transportation Committee. The government isn’t going to fix a problem that they can’t understand.
Posted by Charlie Brenner at October 22nd, 2007 at 10:28 amBTW, before you hold ISP’s up as a shining counter-example, read the recent stories about Comcast blocking access to fully legal BitTorrent streams. The days when your ISP will decide how you use your computer may be upon us.
We talk about how the government is ignorant of the problems with the cell phone industry - and they are. In conversations with friends, I’ve been convinced that consumers are - on the whole - also ignorant of the problems in the current system. From my own personal experience, living in Taiwan (a pretty tech-savvy society) I can say I took-for-granted the consumer choices available there, and I was sorely disappointed when I returned to the US. Thanks, Walt - for injecting some common sense into this whole thing. Still, I wonder what it will take to convince consumers that the situation actually deserves their attention…
Posted by Mark Henderson at October 22nd, 2007 at 10:55 amThis is the exact same argument that advocates of internet neutrality make. And it requires that the communications medium be treated as a public good. But that’s not the situation we’re in.
Wireless carriers spent vast sums of money to secure the property rights to parts of the spectrum on which they deliver their calls. Government regulation would basically revoke those property rights and destroy the wireless carrier’s business model. Which may be considered acceptable, as long as one acknowledges that.
Wireless service in this country is actually quite competitive. There are at least four national carriers and dozens of regional carriers available to consumers. Since I got a phone in 2002, my prices have gone down while the number and quality of services available to me have gone up. Wireless companies may not do everything in an ideal manner, but I think it’s just inaccurate to say that there’s no competition in the industry.
Apple “made the deal with the devil” because it didn’t have the technological expertise nor the initial investment necessary to run its own network. That’s the beauty of comparative advantage — Apple makes a great phone and trades with a seasoned network operator to deliver the calls made on their phone. Both are better off as a result. Ricardo was onto something.
The last thing we need is the government stepping in with ham-handed regulations telling companies and consumers what products they can and can’t use on communications networks. If that’s the case, why doesn’t the government just declare that Blu-Ray is better than HDDVD, or that DRM is mandatory for all digital music, or that all sunscreen must be at least SPF 15 to slow the growth rate of skin cancer in our population?
Posted by Robert Schrum at October 22nd, 2007 at 11:18 amThe mobile phone industry is a mess with antiquated marketing plans and incompatible hardware. But, don’t blame Apple for the compromises it had to make just to break into the market, at all.
Does Apple being in the mobile phone market start to change the marketing plans? Yes. We can get a better overall picture with Apple not subsidizing its iPhone’s hardware. The iPhone with a two year service contract is $350 LESS expense than the use of a cheap, subsidized, Motorola “Q” phone.
Next, there are possibilities now that could open up the mobile phone market by going around the phone companies. This would not likely violate Apple’s contract with AT&T.
This is pure speculation, of course, but a partnership between Apple and Google is fascinating. Google’s CEO is now on Apple’s Board of Directors. Why? What can Google offer Apple?
Google has been buying up or leasing dark fiber for the last several years and has been siting local data centers in tractor trailer rigs all across the country. Goggle is not been telling people why.
Of course, this may be about High Definition TV. Video downloads hold the potential to swamp the backbone, so Google could be preparing to mirror the internet locally to store those video files. It would be cheaper for the ISP’s to rent those files from Google than tying up the backbone.
But, what if this is all about Wi-Max? And Apple? That may be why Google is interested in buying up the 700 MHz band from the government. That spectrum allows signals to pass through anything. And a Wi-Max system operating on that spectrum would be both fast and cover long distances. The problem is in getting signals over the last mile to people’s homes or phones. The Local phone monopolies have landlines that they overcharge for. There is a business opportunity to go around them.
What if Google ran fiber optic cables from those data centers to centralized points such as MacDonalds or Walmart? Then it could set up Wi-Max towers that offered fast transmission rates over a six to ten mile radius. This is also a possibility in the HDTV option that bypasses the ISP’s and DSL.
Then, if Apple uses Intel’s new mobile chip, planned for next year, that handles EDGE, HSDPA, Wi-FI and Wi-Max then it would be able to span the entire country rather than just 30%. So, you could buy an iPhone that you could use on AT&T, where available, or use Google’s wireless Wi-Max ISP across the country. Wouldn’t that upset the mobile phone industry’s apple cart?
Of course, if this is true, neither Apple or Goggle would want to mention it. It’s too soon. Neither Apple’s and Google’s ducks are in a row yet.
Posted by Louis Wheeler at October 22nd, 2007 at 11:20 amWalt,
Great points ! I think cell phone companies are killing innovation. They probably will make more by non restrictive practices. it is outrageous that even if you pay $70 a month you get charged 5 cents for a text message. if text mesages were free I think the adaptation of the mobile medium of texting will be even more. Cell phone companies shoudl realize that inthe end more participation means more stickiness and more revenue than more restrctions.
Posted by Shashi Bellamkonda at October 22nd, 2007 at 11:49 amGreat piece Walt! Would love to see more of this.
Posted by Erik Lagerway at October 22nd, 2007 at 11:57 amI normally consider myself a big fan of Walter Mossberg’s technology reviews in the Wall Street Journal, but for today I am a big critic of Mr. Mossberg’s woefully uniformed and one-sided opinion piece on public policy “Free my Phone.”
Obviously frustrated at the technical reality that the bandwidth availability of telecommunications devices has not kept pace with the faster growth in computer processing, Mr. Mossberg lashes out at public policy as the cause in an emotional diatribe that illogically concludes that “if the government…breaks the crippling power that the wireless carriers exert today, the free market will deliver a… happy ending.”
First, it is odd that a Wall Street Journal writer believes that Government regulation is what makes a market “free”… huh?
Second, what is the “crippling power” that Mr. Mossberg wants to break?
Is it the “problem” that American wireless consumers enjoy the second lowest per minute prices in the world, a fourth of the cost Europeans pay per minute?
Is it the “problem” that low prices enable American wireless consumers to use wireless much more than any other Nation’s consumers and almost four times more than Europeans?
Is it a “problem” that America enjoys the world’s most facilities-based wireless competitive choices?
Just how are the lowest prices, most usage and most facilities-based competitive choices in the world “crippling” anyone?
Or how do these facts warrant Mr. Mossberg calling “the U.S. the laughingstock of the mobile technology world?”
Why was their no mention of these extremely pertinent facts in Mr. Mossberg’s opinion piece?
Could it be that it would undermine his case for more government regulation of the competitive wireless industry?
Or could it be that he only listened to the tech side of the story and not the wireless side?
Third, Mr. Mossberg has a point of view about tech and wireless competition that is divorced from competitive reality.
The tech industry that Mr. Mossberg is more familiar with and writes about — routinely produces markets with much less competition than wireless communications.
Tech industry business models routinely produce dominant providers: Microsoft ~90% operating system and Office share; Intel 80-90% microprocessor share, Ebay 95% online auction share, Google 75% search revenue share, Apple ~70% of music download share… to name some of the most prominent.
In stark contrast, the leading wireless provider in the US has less than 27% market share!
So is it fair or objective for Mr. Mossberg to use extremely-loaded words to describe U.S. wireless carriers like; “Soviet ministries,” “the devil” and “cellphone prison” that don’t fit the factual reality that U.S. consumers have more real wireless facilities-based competitive choice than any couuntry in the world? and certainly much more competition than in most of the tech industry?
These perjorative metaphors are designed to inflame not inform.
Mr. Mossberg also has strong views on: “the way digital capitalism should work” and how U.S. wireless carriers “shouldn’t be allowed to pick and choose what phones run on their networks, and what software and services run on those phones.”
Mr. Mossberg has obviously fallen hook, line and sinker for the lobbying line of Google, Skype and the electronic device guys, and failed to acknowlege the cold hard reality that spectrum does not have infinite bandwidth these interests claim — and that the fact that the more people that use spectrum at any given time the less spectrum there is to use.
The fact is that wireless is a shared network with real capacity limitations — not the tech fantasy that wireless bandwidth is or should be free.
The cold hard facts are that a few bandwidth hogs can ruin the quality of service for everyone.
The FCC’s network neutrality principles recognize this obvious reality and have this very important caveat:
The network neutrality “principles we adopt are subject to reasonable network management.”
Mr. Mossberg has been had and used by the Google/Skype/device lobby.
Every story has two-sides, but unfortunately Mr. Mossberg’s opinion piece only had one.
Bottom line:
I challenge the Wall Street Journal to conduct an objective poll to see if American consumers would rather have:
The U.S. competitive model where prices are four times lower than Europe enabling four times the average monthly usage as Europe and where consumers have the most facilities-based competitive choices in the world; or
The European regulatory model that emphasizes Government-set standards, government price regulations, and government mandating unlocking of phones and applications?
The trade-off that the Google/Skype/device lobby is really asking for in a very sneaky and underhanded way is that they want the consumer to pay a lot more for their wireless service so that they can siphon off wireless profits without having to pay anything for the use of the airwaves.
A sweet deal and a great scam if Google/Skype can trick enough people into believing it…
Posted by Scott Cleland at October 22nd, 2007 at 12:03 pmThis is an excellent article. Would that there were mandtory continuing ed for policymakers and that this blog were a part of their syllabus!
Thanks, Walt, for a superbly reasoned piece!
Posted by Mehul Kamdar at October 22nd, 2007 at 12:25 pmRobert, the problem is that the government is already entrenched in the business and there is no prying the FCC out of wireless. What we want is for the FCC to act in the consumers’ best interests for once, instead of the carriers’ best interests as it always has.
Posted by Mark Larson at October 22nd, 2007 at 1:16 pmScott Cleland failed to identify himself as someone who’s lobbying for the telecom industry he’s defending in this piece. See:
http://www.netcompetition.org/docs/about/
(My disclosure: Walt Mossberg is a friend, and I admire him for taking on this cartel.)
Can anyone else identify an industry spokesman in these comments?
Smart government regulation is sometimes about helping turn cartels into genuine markets. This is one time a little smart regulation would pay off in a big way.
BTW, Walt’s one mistake is to say an industry that invests heavily in something deserves a profit. It only deserves a chance to compete in an honest marketplace.
Posted by Dan Gillmor at October 22nd, 2007 at 1:33 pmWalt, you ever seen Cellswapper.com? Seems like it’s helping break the shackles those wireless carriers have had around our necks and wallets for too long.
Peace to you and keep up the great work.
Posted by adrian mcdonald at October 22nd, 2007 at 3:23 pmIf you stick with a GSM carrier (T-mobile, ATT) you’re only locked into asking the carrier to unlock
Posted by Lucas Baran at October 22nd, 2007 at 4:57 pmyour phone if the carrier paid for a portion of your device(subsidies).
It’s as simple as that. your phone might have restrictions on the hardware if you buy it through your carrier, but not if you get the phone elsewhere. I bought an HTC advantage unlocked without
a plan on-line to use with my T-mobile service which i’ve had for
years. I decided I wanted to switch to ATT for their 3G network, I
cancelled one plan with T-mobile and started another with ATT, just had to switch sims in the phone,
easiest process in the world. As for phones locked from
applications and the apple iPhone being the first real computer
phone I’d have to disagree, I’ve used a pocket pc phone for 4 years
now and have been able to install apps, check e-mail, switch web
browsers, etc on it just fine. On my current phone I’m watching live TV with slingplayer mobile and even making VOIP calls on Skype over Wifi. My device is a bit advanced, but you can still have the same ease of transition with a simple GSM phone.
“Consumers today are free to buy whatever GSM phone they can find and use it on the AT&T or T-Mobile networks. They’ve simply chosen to be cheap.”
This isn’t quite true. If you want to add a line to an AT&T plan, you are essentially forced to buy a subsidized handset and eat up the two-year minimum contract.
When I tried to request a SIM-only deal, I was told that wasn’t possible, but that I could return the handset that would be sent with the SIM for the new line (~$40 activation fee) and the minimum contract would be reduced to eleven months. I returned the handset.
Eleven months later, when I tried to cancel that line, I was told that it was subject to a two-year minimum contract, and that the early termination fee couldn’t be waived on account of having two out-of-contract lines. It took an hour of escalating through customer support, and a threat to cancel the entire plan, before AT&T honored what I was promised.
Compared to the rest of the world, the mobile system in the US is a racket. What’s interesting about the iPhone is that Apple has had to take the reverse route of other phone manufacturers, beginning with the restrictive US market and then heading to European carriers with very different markets. That’s bound to create arbitrage opportunities, and offers the first real challenge to Apple’s long-standing strategy of having every innovation begin in its core (US) market.
Posted by Nick Sweeney at October 22nd, 2007 at 5:07 pmThe big carriers as Soviet ministries is an apt analogy. The carriers do what they want and even ignore specific requests from the FCC.
For example, “each of the national wireless carriers has mostly or completely ignored repeated FCC requests to submit network coverage maps and other information about their quality of service and service availability.”
Posted by Matthew Christopher at October 22nd, 2007 at 7:35 pmSee http://www.aarp.org/research/u.....eless.html
The Japanese seem to have figured it out …
http://tinyurl.com/yt7ebj
Posted by Sach Balagopalan at October 22nd, 2007 at 7:40 pmNicely written. I now see why Mr. Mossberg is where he is, even though he needs to step back a little from the Apple’s mesmerizing gaze every now and then.
Posted by Christopher Facilides at October 22nd, 2007 at 8:40 pmIts funny, I hear people complain about the Iphone but rarely a complaint about Tmobile and the fact the Sidekick series is locked to only programs made by Danger who actually produces the operating system for the Sidekicks. Before you jump on my I know the sidekick hardware is made by Sharp.
Posted by Matthew DeGeorge at October 23rd, 2007 at 7:01 amEver try to write a program for the Sidekick? You want to talk about draconian policies? Danger keeps such a tight reign on the Sidekick software it makes Apple look good. I managed to get Linux on my Sidekick 2 after alot of tap dancing and using the JTAG lines but come on people, stop offereing us “developer keys” and having to grovel to get software put into the “danger Software Catalog”.
BTW Verizon was offered the Iphone first almost 3 years ago (in exchange for 10% of revenues per month) and refused.
Great article.
Posted by Bernard Bujold at October 23rd, 2007 at 12:20 pmYou are right and I would predict
that the situation will change
in the future, thanks to articles like yours…
Bernard Bujold
http://www.LeStudio1.com
Walt,
The corporateers that you speak of in the cellphone industry are of the same breed that has stifled innovation and competition in the US automotive industry (in Europe 50% of cars are diesel with fuel economy of 40-50 mpg) and the recording industry (one need only look at the RIAA’s draconian attempts to keep in place their old distribution and price/profit model).
Corporations have the right to make a profit, but they DON’T have a right to control.
I see a time when cellphone carriers will need to be treated like utilities to keep them in check. Like the water company, they shouldn’t be allowed to control whether I put in a 1 gallon per minute faucet or an 8 gallon per minute faucet — I pay for my decisions and they’re responsible for delivering the commodity, not controlling HOW I use it.
Posted by Mike Brophy at October 23rd, 2007 at 10:15 pmconsumers, consumers, consumers
Posted by Lloyd Budd at October 24th, 2007 at 11:07 amTwo bills were introduced into Congress in September that relate directly to consumer rights and cellular service. One speaks directly to the availability of pro-rated early contract termination and the availability of unlocked phones. The second (introduced to cripple or kill the first?) is supported by the cellular carriers and calls for investigation into those issues, not action. To be fair, I believe that AT&T and Verizon are currently pro-rating their early termination fees while Sprint is not. I don’t know how they determine the percentages.
With 4 out of 5 Americans carrying cell phones (or 2 out of 5 carrying 2 phones each) we are overdue for regulation and consumer protection. The only thing keeping me from inundating my Representiotive3 with mail is the nagging question relating to whether the FCC is capable of recognizing the issues, determining solution and implementing policy.
95% of the cell phones sold in the US are locked to a specific carrier. The fact that there are at least three incompatible systems out there goes far to limit the ability to use you old phone as more than a rechargeable flashlight when switching carriers. It becomes obvious, however, that when (say) Verizon refuses to provision a CDMA phone bought from Sprint, or vice versa, but CAN sell you the IDENTICAL phone for their network, their reason is profit. Now you’ve paid up to a few hundred dollars to get in, dollars that tie you to Verizon. Add a couple of hundred dollars to get out again and it’s no wonder that churn is under 2 percent. With two year contracts, only 4% of contracts expire each month. With extensions for service changes that percentage drops even lower.
With early termination fees you can understand why you see the buy one, get three phones free campaigns. That’s$800 to get out. Multi-line contracts a pure gold to the carriers. Once a couple of service changes are made the contracts for each line has a different expiration date. Now the consumer can never get out without a penalty.
Don’t confuse my inability to afford to change companies with satisfaction with my provider.
Posted by Andy Pober at October 24th, 2007 at 1:44 pmI can understand tying an early termination fee to the subsidy of a cell phone purchase. If I get a cell phone from a carrier for hundreds of dollars less than market price that could logically be linked to a service contract of some duration. What happens, though, when my contract expires and I don’t want to take advantage of the opportunity to get a new phone? What is the value to me of having a two-year contract and an old phone? I’ve been told by my carrier that I would have to pay a surcharge for operating outside of my contract. Untrue? Probably. But nothing prevents a carrier from extending your contract for two years whenever you call customer service and it does happen. Ask the South Dakota Attorney General. If you’re lucky, though, Sprint will drop you as a customer if you call customer service too many times with questions.
Now let’s look at the kinds of phone modifications typically demanded by the carriers… For the most part, any stand-alone feature that limits the sale or profitability of the carrier has to go. Very few phones that support third party GPS apps with an internal chip have that chip enabled. AT&T is an exception, but they will not document the fact and prevent their sales people from admitting it. The new Sprint Touch has had the Touchflo interface modified, dropping one screen and adding one that shows little but Sprint services.
Let’s see. Pay me to get in. Pay me while you’re here. And pay me to get out. I don’t know of anyone who really likes their cellular provider. People are looking for value for money paid, reliability and respect. It’s nice to think that you are valued as a customer and finding out that asking a question of a Customer Service rep is likely to either get you dropped as a customer or add two years to your contract adds little to the relationship.
Actually, I don’t hold the carriers completely responsible. They operate in a market environment where they have to develop technology and build out infrastructure for their fraction of the market. Economies of scale suffer. While multiple standards (isn’t that an oxymoron?) facilitate innovation they also inhibit true, open market competition. The FCC has a long track record showing an inability to understand the dynamics of an open market. They broke it and I don’t think that they can fix it.
This was one of the finest pieces of journalism on this subject that’s been written.
Where else do you pay more for a minute of talk time when you use more? (Go over your allotted minutes and the rate can double!). And if you go under your allotted minutes you still pay more per minute.
Where else do you buy a product that has its features taken out?
Here is San Diego we’re being asked to use our phones less due to the fire emergency. If the cellular companies allowed VOIP calling they wouldnt have that problem and there would be another communication channel available to emergency workers.
There is such a huge adversarial relationship with out carriers that doesn’t exist in Europe or Asia.
The industry lobbyist, Scott, said we have the 2nd lowest phone rates. Why then do we pay $1.29 to $1.99 to call home from Europe or Asia while European and Asian customers pay $.30-.$.60?
Posted by Phil Baker at October 24th, 2007 at 8:23 pmIt’s great that you are drawing attention to this issue, Walt, but don’t hold your breath waiting for the federal government to intervene. The government thinks there is plenty of competition in wireless networks, so they aren’t enthusiastic about forcing wireless carriers to release control of the devices that can connect to their networks. The FCC thinks the Carterphone precedent from 1968 was a very different situation, because AT&T was the only carrier then.
But the FCC is wrong. Wireless carriers are now using their control over user devices to extend their power onto networks they don’t own, such as the internet. I discuss this in more detail on my blog at http://ikeelliott.typepad.com/.....ed-ip.html.
Posted by Ike Elliott at October 24th, 2007 at 8:29 pmDear Walt, I applaud this article and agree with most of your comments. But I disagree on your remarks on, “A shortsighted and often just plain stupid federal government has allowed itself to be bullied and fooled by a handful of big wireless phone operators for decades now.” Your statement is an unfair characterization of the shortsighted and often just plain stupid and greedy politicians and federal government bureaucrats which allowed themselves to be bullied and fooled, and bought, by a handful of big wireless phone operators for decades now, and for decades to come.
Posted by Ernie Nucup at October 25th, 2007 at 6:00 amI compleatly agree with Mr. Nucup, but this is nothing new for us here in the US. Just look at the last century. Look at the Fords, and the Edison’s and the Bell’s and the Gate’s. We always seem to go with a few “big blues” and then later on we cry the blues!
Posted by mike patterson at October 25th, 2007 at 6:46 amDear Walt,
As a 14 year cellular and wireless veteran, I have to say your article is really fun and creatively written. It is a lighthearted way to peak ‘consumer’ curiosity and make this controversial topic more approachable. It is an ‘Opinion’ Piece and everyone is entitled to one
Open Access and Open Networks Sound Great…
But from a support and training standpoint it would be a logistical nightmare. Think of how difficult it is to do the simplest things thru customer care now with a basic cell phone. How insanely crazy would it be if we have all these manufacturers with ‘no current standards in place’ and every end user and every manufacturer free to do what they want when they want?
Additonally, with next generation devices and pda’s becoming more mainstream, this opens up lots of vulnerability to the consumer:
1. Do you want to be profiled by your web browsing habits and mobile spammed and sms’d to no end on your Google phone?
2. What about wireless security or lack thereof and the exposure to cell phone viruses via your Windows Mobile or Symbian OS device? Just like Apple can make a ‘program’ that blocks an unlocked phone when the phone is synced any company can make a program that does XYZ when we sync up our devices…and maybe without our knowledge.
3. And think about wireless fraud and hacking of your cell phone via your mobile banking accounts?
Yes, the Bells totally irk me as they have killed alot of innovation over the past 30+ years but they also ensure things don’t change abruptly which is sometimes good as well. It’s crazy but that happens in every industry yet you keep buying their ’safe’ stocks
You have to think of them as a ‘mixed blessing’ sometimes.
Our industry could definitely use a little organic cleansing right now, but everyone within the industry from the regulating agency to the people who work on the front line in the retail stores need to do a better job at making our industry more approachable. Speaking to customers in everyday language, educating them on their options and better supporting them. Our market is at 81% capacity yet we don’t even have our own dedicated section in most major newspapers. I am disappointed to say it but we are terrible on every level of consumer education and support.
For the time being, I would much rather innovation be stifled as I can assure you that the number of wireless support professionals along with the resources we currently have in the industry are extremely limited and very much decentralized. Right now our focus should be on getting better standards in place for certification of wireless devices that can be sold on the 700mhz network along with training and certifying IT Professionals (in wireless) as Wireless and IT are not the same. IT works with fixed assets, Wireless works with assets in motion. We use different terms, resources to solve problems and troubleshooting techniques…and many IT folks are fixing your BlackBerry?!??! uh oh, lol.
But seriously we have to learn to properly support not only the next generation devices but most importantly the people who will be using them.
http://www.cell-phone-help-and-training.com
Posted by Shonika Proctor at October 25th, 2007 at 9:29 amxohm may satisfy us all. you know, wimax.
Posted by swish kisher at October 25th, 2007 at 8:06 pmI think it is funny how Americans are stuck in their own dilemma which is unnecessary. I don’t think the dilemma of “cell phone function” or “price tag” is necessary at all, given that this dilemma DOES NOT exist in other countries!!!
I agree that it is reasonable that users have to pay more for THE SAME PHONE if they don’t want to be tied with a contract or pay less for THE SAME PHONE with a contract. I also agree that any wireless provider has the right to charge users for any online services. What I don’t agree is that the damn wireless providers like Verizon and Sprint have any reason to control every single feature of users’ cell phone. I also don’t agree that Wireless provider to restrict users’ phone from using other wireless provider with the same/compatible technology, such as GSM or CDMA.
Take the recent Palm Centro for example, the decent Nuance Voice Control is as cool as it can get, but Sprint actually charge USD$7 dollar a month for this decent feature. I think it is fair if Sprint charge users an additional fee in addition to the cell phone price for this feature, but charging users monthly just for a feature of the cell phone is wrong. This simply means that you lost the feature once you want to use the Palm Centro on other wireless providers like Verizon, which uses the same CDMA technology as Sprint does. BUT OH… Sprint users don’t have to worry about that because Sprint won’t let users to use Palm Centro on other wireless provider anyhow, even if the contract expired. That is so smart of Sprint!
I had been in Taiwan for quite a while and I had seen how wireless providers do things in Taiwan. Wireless providers in Taiwan definitely would not charge users for any cell phone features MONTHLY and wireless providers in Taiwan definitely would not restrict any users’ cell phone to run ONLY on their own network.
Someone argued that users in the US made their own choice for having a restricted cell phone for a cheaper price. I think that is totally wrong. Users have been making such a self-torturing choice simply because wireless providers have not opened any other options which are totally feasible in other countries!
Posted by Roger Chu at October 27th, 2007 at 8:45 amWhile I am not sure the rest of the world laughs at the US, I can say with certainty that from the phone perspective, spending time in the US is not what I look forward to. I live in Africa. In most African countries, you can buy a sim card for next to nothing ($0-$1), insert and call. This usually enables you to access GPRS or EDGE so that I can access my gmail using my Nokia handset. You can buy a cheap handset for $20. This kind of convenience simply does not exist in the US. Here, there is no charge for receiving calls or monthly fees. The price structures are much simpler to grasp. I find the US price structures Byzantine. Plans offer free this, that, after 100 min this, that - here you use a service and then you pay. Either US consumers are very good at understanding complex price structures, or they just do not have a clear idea of what they are buying. As for coverage, I am baffled by the US. I have been in some of the richest communities in New England, where a house does not sell for less than a couple of million dollars, and yet coverage is patchy. You would think that the rich would look after themselves, at least. The Soviet analogy of Mr. Mossberg holds - your money cannot buy you good service - get in the breadline with your cupons validated by the Ministry of Communication and Medium Industry! I have actually participated in managing relief convoys through some of the most guerrilla infested areas of this part of the woods using a mobile phone. The population is largely displaced living in some of the worst humanitarian situations of the world with virtually zero purchasing power. Yet, the GSM network is perfect. The reality is that the mobile network is cheaper and better than in the US in places like Kisangani (aka heart of darkness), Gulu, and Mogadishu.
I am not and expert, but I believe that the bundling of services that take place in the US that makes it so difficult to compare prices is actually illegal in most European countries. In Africa, the consumers are so price sensitive that they would not have it.
In all, Mr. Mossberg’s column and the intelligent comments help me understand why the US system is the way it is, in a country where most other things are very significantly cheaper and better than in the rest of the world (If you live in Germany and want to buy a Mercedes, the US is the cheapest place to buy it).
Probably, only a technology upset will change this.
Posted by mads oyen at October 27th, 2007 at 12:50 pmYour plea “Free My Phone” would sound compelling if today’s America’s wireless industry weren’t incredibly competitive and responsive to the marketplace. Mobile companies compete fiercely, resulting in a consumer marketplace filled with innovative and compelling services. We compete on every imaginable front: reliability, customer care, price, multimedia services and handsets.
Since 2005, American consumers have been able to choose from more than 2,500 different mobile devices. There are great choices at every juncture of the wireless food chain.
In 1993, the Clinton Administration and Congress took a risk, designing an industry based on market principles, to deliver to consumers what the highly-regulated monopoly phone company never could: the most innovative, competitive and vibrant wireless marketplace on the planet.
Government intervention can be a tremendous force for positive change. But for 240 million American wireless consumers, the heavy hand of regulation can only stifle and choke innovation.
JNels
Posted by Jeffrey Nelson at October 29th, 2007 at 11:16 amVerizon Wireless
Thank you for writing a well balanced analysis of the state of the current Wireless industry in this country ( http://mossblog.allthingsd.com.....-my-phone/ )
I would like to maybe add or point out one additional comment.
Much press is made by the carriers about their ‘handset subsidies’
From your article:
>The carriers defend these restrictions partly by pointing out that they subsidize the cost of the phones in order to get you to use their networks.
>That’s also, they say, why they require contracts and charge early-termination fees.
>Without the subsidies, they say, that $99 phone might be $299, so it’s only fair to keep you from fleeing their networks, at least too quickly.
I would like to point out that what the carriers provide, is not a ’subsidy’ at all, but is instead a loan and that the carriers are somewhat misleading us by calling them subsidies. The distinction may be slight, but is important. A subsidy (like a farming subsidy etc), is not expected to be paid back.
A loan on the other hand, clearly is expected to be paid back. In other words, the wireless carriers don’t subsidize our handsets at all, they loan us the money and then force us to re-pay it through all of the practices, that you describe
This means that the handset is really ours as a consumer, we just have a financing arrangement in place.
As the handset is ours, we should truly be ably to use the device as we see fit. At the very least, as soon as the loan is paid off, we should have free and clear title with all that implies (imagine the chaos and uproar if the car finance companies were allowed to dictate what roads we were allowed to drive on etc., both while we owed them money and afterwards!).
Close Reach Communications Inc. sees this issue on a regular basis. We create ‘Interactive’ business applications for mobile devices. We are *constantly* having to explain why we can’t support cell phones on Verizon, Nextel, Alltel, US Cellular networks etc. This problem is a constant thorn and has already killed off many a promising mobile product/service startup.
The problem *isn’t* getting better either. In fact, it is going in the wrong direction. A case in point, T_Mobile (USA) have steadily clamped down on their network and handsets. What was once a quite open carrier in this respect (~2003), has become a very oppressive carrier (2007). They will now, no longer allow 3rd party applications to be installed on their customers handsets that perform even the most basic network functions, without a T-Mobile business partnership in place. In addition, they are not entering into any new business partnerships and won’t even return an email or phone-call….a definite ‘catch-22′.
These are not technology barriers. As you so rightly articulate, they are business practice barriers put in place and maintained by wireless monopolies.
Best Regards
Paul Carew
Posted by Paul Carew at November 2nd, 2007 at 1:49 pm–
Close Reach Communications Inc.
CEO and President
http://www.CloseReachCommunications.com
As a cellphone user for about 7 years in India, I’ve watched the market evolve from a ultra-high price regime, with a handful of operators, to practically the fiercest, most competitive wireless market in the world. Here, the choice is pretty much left to the consumer - which handset, which service, which plan - and this has only led to the operators posting record levels of growth and profitability.
Some of the comments above, like how the customer service mechanism will cope with a free-for-all situation, sound a little, IMHO, change-resistant for the sake of resisting change. If this can be managed in a country with 40% illiteracy, and with notoriously bad-tempered and difficult customers, I can’t see why not in the US.
One of the reasons why the situation is the way it is in India, is because of some fairly enlightened regulatory policy. The telecom regulator has wisely restricted the activities of the operators to just providing the bandwidth and not allowed them to get in bed with handset manufacturers. It has not fixed prices, but not allowed operators to charge for so-called “compulsory” services, or include hidden charges. Simple market economics has done the rest.
Posted by Nitin Bajaj at November 4th, 2007 at 1:19 amWalt doesn’t say anything new here, he simply says it quite well.
When I was younger (I’m in my late 30’s), we leased a squat, putty-colored phone from the phone company. And it was simply “the” phone company. I can recall their foretellings of doom and chaos should the government allow others to offer products and services on their network. Things seemed to work out just fine after the government stepped in and broke up Ma Bell into the baby bells and so on.
Now, every time I use my Pay-as-you-go cell phone (no contract for me), I marvel at the fact that we’ve returned to where we started and allowed the corporations to reset the game so that, once again, they hold all the cards and make all the rules. This isn’t Capitalism. This is Bolshevism. And the same Red State politicians that chant “Freedom isn’t free” are the ones letting a handful of corporations dictate how our country’s communications infrastructure is run.
Funny how history repeats itself.
Posted by John Galt at November 13th, 2007 at 8:54 amFinally some action by Verizon, one of the ‘big 4′:
Posted by Paul Carew at November 27th, 2007 at 9:34 amhttp://prnewswire.com/cgi-bin/.....,+07:30+AM
You are the KING!
Posted by Aleksandar Bukavac at December 28th, 2007 at 5:10 amI’m late to this game, but while I agree that we need more open access, Walt you’re off on a few points and really wrong on at least one other.
You’re off about open phones that move from carrier to carrier when it comes to most non-smart phones.
The problem you face, which Europe doesn’t, is that we have at least 3 different wireless technologies which are incompatible: CDMA, GSM and Nextel’s.
All are incompatible. Within the CDMA space, the phones can technically move from one company to another, but it’s not easy. I work at a small carrier and a co-worker bought a used Verizon phone off of ebay and it took a week to figure out how to get it to work on our system.
If that phone was a Sprint phone, and it was unlocked, you’d then run into the problem that Sprint uses Java for applications, while Verizon and my company use Qualcom’s Brew platform, which AFAIK are no compatible.
Going the other way may be possible as I believe that Verizon does have a Java Virtual Machine on their phones.
Where you’re wrong is when you say changing browsers is hard and requires a techie to do it.
All it requires is a phone that is capable of adding java applets, which is every phone I’ve used since 2001 (all sprint). The browser is operamini and all you need to do is download the software and it’ll automatically install.
It may be your only option, but it’s not hard if your phone has web access.
Posted by Kevin Crays at January 16th, 2008 at 6:03 amReading the article and *some* of the posts afterwards makes me glad I’m in the UK where every mobile phone has a SIM card and you can change providers easily. You can even keep your number much more easily now since providers must port the number within a much shorter time period. The exception is the iPhone of course which is confined to O2 but that won’t last forever and by the time it changes the iPhone will be worth buying and all bugs will have been ironed out.
Posted by Alan Anderson at February 13th, 2008 at 3:37 amWhy so much talk about Apple’s iPhone?
One of the worst phones for anyone who wants freedom. Unlocked your iPhone? Software update will fix that.
Installed your own apps? Let make an update which breaks that!
Why have you not mentioned Nokia with many Series60 smartphones or even SonyEricsson with its P series devices and UIQ?
With my N95 I have my own browser installed.
Opera Mini and Opera for series 60 are amazing browsers for phones. Other software I CHOSE to use include Quickoffce S60, Garmin Mobile XT for my GPS, EmTube for youtube videos….
There are choices out there but for some reason people seem to be drawn in to the iPhone…
A fancy UI does not make a great “open” phone.
Posted by Charles Clout at February 14th, 2008 at 12:04 amI recently sold a vintage AT&T phone on eBay, it was called a Telstar, from the 70s. Was plastic with a translucent plastic lid that swiveled open. As I recall in my research, it was about $100 back then. A fortune for sure.
On the bottom there was a little sticker that said the phone was the “Property of AT&T” and some statement that Western Electric owned the “insides” and the consumer owned ONLY the decorative housing.
Probably one of the more bizarre things I recall was when visiting my folks that they only in the last 10 years stopped using their old phone that they thought the phone company still owned and for which they were paying a monthly charge.
In regards to this, as I have read, France and some other European countries prohibit carriers from selling locked phones. To sell the iPhone in France, Apple had to develop an unlocked phone.
Same for the BlackBerry Pearl, some countries have unlocked phones.
The root of the problem with locked phones in the U.S. is that Washington [the federal gov] does not understand tech and legislators are greatly influenced by special interests, lobbyists and the carriers. And the current Bush Administration is so pro business, the FCC and others will not do anything to change the current cozy relationship between them.
Here in California they finally made mandatory using a headset when talking on a cell phone in a car. That was resisted by the carriers for years. But they successfully “paid off” various legislators to where the fine for violating the law is $20 and one cannot be stopped and ticketed for violating only the headset law. That’s basically saying the law can’t be enforced, weak as it is.
It took forever for cell phone number portability legislation to pass [where you can keep your cell phone number regardless of carrier.] Maybe it will take just as long for phones to be unlocked and for the customer to enjoy the full range of cell phone technology, such as a fast network even if a “DSL speed” connection will compete against a carrier’s residential high speed service.
It’s all in the hands of the politicians. Get rid of the cell phone lobbyists and their money given to the lawmakers and things will change quickly. Carrier money buys the status quo. Take it out of the equation, phone tech will improve.
Posted by Michael Mortimer at February 14th, 2008 at 9:14 amTo be fair, let’s call a spade a spade. The reason wired telephone service became a monopoly was BECAUSE of the government, not due to inaction of the government. In fact, competition in the nascent telephone industry was THRIVING before the federal government became involved. To portray the government as some sort of white knight that rescued us from the evil telephone monopoly is to completely ignore its role in creating the monopoly in the first place!
A key factor in the the Bell monopoly was the government’s hijacking of the wireless spectrum. By controlling and regulating both the wired and wireless markets, the government prevented any sort of meaningful competition from forming. Imagine the sort of communication technologies that we could have today if free-market innovation and competition had been allowed to flourish in the early 20th century! Conversely, imagine the glorious green DOS screens we would be using today had the government regulated the computer industry in the same way they regulated the communication industry.
To expect that the government can “rescue” us from the wireless carriers is foolish. You might as well expect Santa Claus, the Easter Bunny, and The Tooth Fairy to do so. If you think the wireless market is bad now, just imagine what a mess it would be once the government got more involved. I think the old joke regarding government policy is “if it ain’t broke, fix it ’til it is”.
A good summary on the history of the Bell monopoly can be found here:
Posted by Marcel Brown at March 23rd, 2008 at 4:05 pmhttp://www.cato.org/pubs/journal/cjv14n2-6.html
Mr. Mossberg, I wholly agree with your thoughts on this issue of Cell Phone Providers and their monopoly of the hardware plus software of our Cell Phones.
Thank You for Listing!
Posted by Felipe Agosto at April 6th, 2008 at 10:47 am