U.S. Mobile Phone Carrier Practices Questioned

[MacRumors]

Several stories today came out about a hearing at the House Subcommittee on Telecomunications and the Internet.

During the hearing of the House Subcommittee on Telecommunications and the Internet, representatives from both sides of the aisle called for a more open wireless system where new innovations aren't held hostage to the competition-killing carriers that control the network.

The iPhone was used as an example of a mobile phone tied to its carrier. AT&T has a (rumored) 5 year exclusive contract with the iPhone -- restricting use with other providers.

Marketwatch notes that the U.S. is unique in this regard:

Several industry critics who testified at the hearing noted that Asia and Europe obligate carriers to ensure that any device will work with their networks. Wireless entrepreneur Jason Devitt, chief executive of SkyDeck, said 800 devices would work on Vodafone Group plc's wireless network in Europe, whereas only 30 devices work on Verizon's network in the U.S.

Neither Apple nor AT&T testified at the hearing, and no laws have yet been proposed to address this issue.



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[milk242]

Wow the iPhone is changing the way our telecommunication network will be setup in the future. Awesome!

[aricher]

interesting. It will be a long time until you see laws passed on this. It somehow reminds me of the original deregulation of the phone monopoly that was the Bell System (ma bell) back in the day.

[theheadguy]

^ Actually, the shady practices of cell phone carriers are causing this. The iPhone was one of many examples.

[kymac]

is this saying that all phones should be able to be used on whichever network one may choose? ..so like iPhone will be able to be used elsewhere from att?

[retroneo]

Verizon needs to do the CDMA EVDO to HSDPA upgrade. This kind of network changeover has successfully been done in South Korea and Australia.

HSDPA has a very large range of devices and has designed-in interoperability (SIM cards).

The Telstra changeover in Australia concurrently allows people to use HSDPA phones and CDMA phones until all customers have changed over - both standards concurrently sharing the same spectrum. It also uses the same frequency band as the US versions of these standards (850MHz)

The Australian example took 10 months to complete from concept to completion.

An unexpected side effect was greatly increased coverage footprint (98.6% Australian population) and higher than expected data rates.

[ghall]

People are finally starting to wake up!

[Digital Skunk]

I hope this means that Stinkular can shove it very soon and Apple can put there phone on more worthy networks. The fact that they don't offer insurance for the their phones is keeping a lot of people on my side of town from getting on.

[darwen]

um. no. free enterprise allows carriers to sign exclusive contracts. maybe other countries will allow laws to pass that tell companies they need to open their products but here in the US, that isnt how things work.

Unless it is a monopoly (which this isnt), they cannot tell Apple the product needs to work on all networks. Apple for example could create their own wireless service and make it exclusive to that. They are selling a product, they can limit it as much as they like. People do not need to buy it, nor do they need to use AT&T. There are plunty of other phones and plunty of other carriers out there. No part of this is a monopoly. Except for the fact that AT&T has a monopoly on the iPhone (but no more than any football team has on a player... it is called a contract). If you don't like it than move on, nothing to see here.

[zflauaus]

Originally Posted by retroneo

Verizon needs to do the CDMA EVDO to HSDPA upgrade. This kind of network changeover has successfully been done in South Korea and Australia.

HSDPA has a very large range of devices and has designed-in interoperability (SIM cards).

The Telstra changeover in Australia concurrently allows people to use HSDPA phones and CDMA phones until all customers have changed over - both standards concurrently sharing the same spectrum. It also uses the same frequency band as the US versions of these standards (850MHz)

The Australian example took 10 months to complete from concept to completion.

An unexpected side effect was greatly increased coverage footprint (98.6% Australian population) and higher than expected data rates.

There is absolutely no way Verizon would change over from CDMA to GSM. It would require way too many resources as well as a very large chunk of change to covert all their towers to GSM. You have to take into fact that Verizon is a very greedy company and CDMA is working just fine.

I must admit, I like the CDMA networks very much because it handles traffic very well and voice quality is very good. I've never used GSM, but another thing would be building penetration. From reports I've seen, GSM has poor building penetration compared to CDMA.

[CHROMEDOME]

The U.S. telecommunication systems are totally messed up. CDMA sucks but they have a much larger EVDO network compared to AT&T's HSPDA network. There needs to be one network with super fast data network. Unfortunately that costs money and I don't think any of the huge corps are down for spending any of it.

[BlackLilyNinja]

Its all about supression of the customer's will. Keeping people from having the ability to switch services for any reason. Or making it damn difficult and damn expensive.

top shareholders decide how to keep customers. The more customers then the more stocks are sold. Control control control.

[Digital Skunk]

Originally Posted by darwen

um. no. free enterprise allows carriers to sign exclusive contracts. maybe other countries will allow laws to pass that tell companies they need to open their products but here in the US, that isnt how things work.

Unless it is a monopoly (which this isnt), they cannot tell Apple the product needs to work on all networks. Apple for example could create their own wireless service and make it exclusive to that. They are selling a product, they can limit it as much as they like. People do not need to buy it, nor do they need to use AT&T. If you don't like it than move on, nothing to see here.

I agree, but the rest of the capitalist world is enjoying a very good and vibrant cell phone market with options galore, and here in the US we are about three years behind in cell phone tech and business practices. I like the iPhone, but don't believe the hype, Apple won't sell nearly as many as they would like if they don't open it up to the other carriers. Sprint is a better data service provider for businesses, they offer fast speeds and insurance for any smartphone at any price. Until Cingular can do that a lot of people won't buy the iPhone.

The iPod didn't take off until it was usable on a Windows machine.

[Mr.Gadget]

I think there won't be any "real" competition until the U.S. cell market opens up considerably. I agree with the Skunk...

I cannot believe Apple has such an expensive phone (that only works with one carrier) and does not offer insurance!

How can Apple feel that they can make more money with an exclusive carrier of the iPhone. I am sure there are thousands of people who would use it if it were available outside of AT&T... What a crazy decision to lock it for so long with one carrier. AT&T must have really sweetened the pot for Apple...

[CJD2112]

Originally Posted by Mr.Gadget

I cannot believe Apple has such an expensive phone (that only works with one carrier) and does not offer insurance!

Apple is going to offer Apple Care Protection Plans for the iPhone later this month. I asked the Apple Store on 5th Ave where I purchased my iPhone and was told any one who purchased the iPhone will be able to buy the extended warranty plan, which has been rumored to extend coverage to water damage, for $69. I find this to be a much better deal than spending the typical $4.99/month for phone insurance that is currently offered by most mobile phone providers - not including the standard $50 deductible (a one time fee of $69 for three year coverage is a much better deal than $59.88 a year + a $50 deductible for a normal phone).

[EricNau]

I'm still waiting for the U.S. to follow Belgium and ban the sale of locked phones.

[pika2000]

Originally Posted by EricNau

I'm still waiting for the U.S. to follow Belgium and ban the sale of locked phones.

I'm with you. I'm tired of locked cell phones in the US, and having to resort to ebay or questionable import stores to get a better selection of cell phones. Apple would've sold more iPhones if they sold it unlocked. Speaking of the iPhone, Apple said the iPhone is coming to Asia in 2008. Apple would be dumb not to sell unlocked iPhones in Asia. It would be even more ironic if we in the US have to import iPhone from Asia to get it unlocked.

[Digital Skunk]

Originally Posted by CJD2112

Apple is going to offer Apple Care Protection Plans for the iPhone later this month. I asked the Apple Store on 5th Ave where I purchased my iPhone and was told any one who purchased the iPhone will be able to buy the extended warranty plan, which has been rumored to extend coverage to water damage, for $69. I find this to be a much better deal than spending the typical $4.99/month for phone insurance that is currently offered by most mobile phone providers - not including the standard $50 deductible (a one time fee of $69 for three year coverage is a much better deal than $59.88 a year + a $50 deductible for a normal phone).

No it isn't. If you loose your phone your screwed.. PERIOD. Apple won't give you a new phone if you just lost it and told them that you lost it or if it were stolen. If Apple did do that then they wouldn't do it a second time. The Apple Care does sound nicer than most other AppleCare plans Apple has but it isn't anywhere near what Sprint offers for insurance on the Treo or other smartphones.

Sorry man.

[psendeavor]

Originally Posted by EricNau

I'm still waiting for the U.S. to follow Belgium and ban the sale of locked phones.

It's no so much locked phones that are outlawed here, but rather selling a plan coupled to a phone (or vice versa) that is strictly illegal here. And that's not explicitly in a mobile phone law, it's just a general consumer-friendly law that buying something shouldn't oblige you in buying anything else.

[natejohnstone@g]

I read this in USA Today a couple days ago, and it sounds like the FCC is really interested in new laws that make it less easy for carriers to lock phones, intentionally restrict the use of certain features, etc. They are using the iPhone as an example and have WAITED for the iPhone to come out intentionally so that they could do so. It's a great phone that people on other carriers wish they could use.
The bottom line: Europe and Asia are MUCH MUCH farther ahead of us in the cellular arena. Why? because their carrier companies don't hold all the cards like they do here.
On the one hand Apple's unusual approach and bartering with AT&T is a step forward (Veriozon tuned them down, unfortunately for everyone). One the other hand, I'm dissapointed that Apple with all of their high-and-mighty talk and ideals about changing the industry has chosen to shill for the powers just as much as anyone else. Exclusivity, locked products, intentionally NOT letting people use certain services like Skype or iChat...its's sad.
Prediction: Apple will jump on the FCCs bandwagon sooner rather than later, and claim to be "holier than thou" and want to change the industry for the better of the consumers, etc. In actuality, they just like press and want to make more money. The iPhone will be unlocked in 2 years.

[Digital Skunk]

Originally Posted by psendeavor

It's no so much locked phones that are outlawed here, but rather selling a plan coupled to a phone (or vice versa) that is strictly illegal here. And that's not explicitly in a mobile phone law, it's just a general consumer-friendly law that buying something shouldn't oblige you in buying anything else.

So what you are saying is that Apple is turning into a PC company? Forcing buyers of the iPhone into AT&T contracts just like HP, Sony, Compaq, and Alienware forces you to buy Windows on their machines.

[miketcool]

This is called reality. Apple only allows Mac OS X to work on Apple's hardware. It is called reality. In reality people sign contracts, or legally binding agreements that allows this so called evil behavior. Look at the laws and read a book on capitalism or the free market. If you do not like it, leave reality.

[JesterJJZ]

Well, whatever. Just pass a law that get's iPhone on Verizon and I'll be happy.

[greenwrangler]

Originally Posted by darwen

um. no. free enterprise allows carriers to sign exclusive contracts. maybe other countries will allow laws to pass that tell companies they need to open their products but here in the US, that isnt how things work.

Unless it is a monopoly (which this isnt), they cannot tell Apple the product needs to work on all networks. Apple for example could create their own wireless service and make it exclusive to that. They are selling a product, they can limit it as much as they like. People do not need to buy it, nor do they need to use AT&T. There are plunty of other phones and plunty of other carriers out there. No part of this is a monopoly. Except for the fact that AT&T has a monopoly on the iPhone (but no more than any football team has on a player... it is called a contract). If you don't like it than move on, nothing to see here.

This kind of thinking is exactly what is wrong with the die-hard free wheeling dealing capitalists. Yes, Capitalism is a good thing. But didn't your mother teach you that there is such a thing as too much of a good thing? In other words, a little regulation can only be good for the health of the overall capitalist system. In a nutshell, a real free market would allow the consumer to buy his phone anywhere he wants and use it on any network that he wants and pay the operator for that usage. Thats what will foster true competition and real innovation. Thats why US lags so much behind the rest of the world in this arena.

What I dont get is how can an oligopoly, that colludes every second to limit consumer's choices be defended? Its the same type of argument people made during the MS antitrust trial.

[voodoofish]

Wirelessly posted (Mozilla/5.0 (Danger hiptop 3.1; U; AvantGo 3.2))

Even though they're using the iphone as an example, the example about vodafone being able to use 800 phones on its networks in europe sounds more like they're talking about the way all operators in europe where told they had to use gsm/3gsm at the same frequencies, which means once sim unlocked and phone that meets the gsm standard on the two frequency bands used here in europe can be used on any network.