In my home country, Portugal (one of the european countries with the most mobile phones per capita ratio - go figure!
), all three physical networks use GSM/3G and SIM cards... Most mobile phones are locked and subsidized, even those with pre-paid plans (which are rechargeable only at ATMs, at the service provider's stores, via the internet or the phone itself), and didn't suffer all that crippling business up until some 2 years ago, and the rebranding atrocity (of "regular", big-brand phones like Nokia, Motorola and Siemens) up until a few months ago... Still, it doesn't seem they are as crippled as those you describe here (I'm not sure about bluetooth, though... And they don't usually come with USB cables included anyway).
Some people buy unlocked phones from electronics and mobile phone stores (or, in my case, directly from a Nokia store, which is a rare thing there), but most buy them locked directly from the service provider's stores (much more common) or just about everywhere (supermarkerts even!). Also, SIM cards are preety cheap and easy to get hold of, and in some cases, free. There are these "upgrade" plans, under which you buy a new phone, with a new SIM card for free, and get credit for your old number, so you can keep that and give your old phone away or resell it.
Most of these people use prepaid plans, but there are also 1-2 year contracts, especially for high-end phones. On the low end, some are fully subsidized, and as they progress further up towards the high-end, they get more expensive (but always cheaper than the unlocked versions, of course). Also, interestingly, some people buy the locked versions (mostly lower-end phones, as you have to pay cancelation fees for contracts just like there in the US) and use their prepaid cards until they run out of money (or keep using it but get extra SIM cards from other networks), and then unlock their phones, either legally through their service providers for a fee (can't remember how much, but it's not usually more than €50) or illegally on the "black market" or by themselves... Even if you don't use other SIM cards regularly, it's always nice and useful for an emergency (not the 911-kind of emergency, that is... Fortunately you can dial 112, the european 911, even without a SIM card inserted).
As of now, there are three networks and one MVNO piggybacking on one of them, TMN, the most popular one (not even Vodafone PT overshadows them, TMN has some 5 million customers, on a country that only counts 10 million heads; that IS telling
). And since two years ago, number portability was finally enabled, enforced by law to ease competition between the service providers... That creates some confusion, as the first two numbers don't necessarily always identify the network to which a number belongs as before (also, that MVNO also uses the same first two numbers as the main physical network's), but "yay!", nonetheless.
Here in Spain, where I'm staying until March, things work preety much in the same way (ironically, AFAIK, locked Vodafone PT, ES and FR phones and SIM cards are not interoperable... go figure!). The only difference is that there are more MVNOs, it seems, and you can charge your SIM card preety much everywhere: supermarkets, phone booths, web-cafés, grocery stores, ATMs, etc. All I had to do, with my brand new Nokia 1101 (bought it already unblocked, it's the first "free" phone I've ever had and I'm not looking back, as even if I don't plan on switching networks, I enjoy the fact that I can if I want to - it's a bit like Boot Camp for long-time Windows users
), was buying a spanish Telefonica SIM card and putting it in. No questions asked (of course, I activated some services in a store, but nothing very technical as my phone has a B&W screen and mono-ringtones... but it does have a LED flashlight, probably the most useful feature I've ever had in a phone, honestly!
). Same thing for my brother, except in his case, it was a dutch T-Mobile SIM card...
I really don't get it, but it's funny to think that in Europe, with 15+ countries in the European Union, all speaking different languages and whatnot, there's more interoperability between networks as they are all based on GSM/3G and soon on UMTS, than in the US, with all that CDMA/GSM confusion... I know each has its own merits, and that the area of Europe is much smaller than that of the US, but all I know is that the coverage in my country is superb (~95% of the territory, and that includes near-deserted areas where you may find small villages here and there), and not too shabby on the rest of Europe either. You're damn rich, how hard is it to fit decent *standard* networks on the US?
(not that CDMA is not a standard, or a bad one at that, but you could standardize - as in "choose one standard and go with it" - your celular networks, right? EVEN if it was an very expensive task, it would eventually bring benefits to consumers, I reckon... Can't your government defend consumers and promote competition at the same time?).
And while on the subject of competition, as for the whole locking in thing, what's happening in your country is an absolutely disgraceful situation. Aren't you supposed to be heralding all those liberal principles of free - and fair - competition? I mean, Microsoft has this whole "Windows-OEM tax"+Office scheme going on, but they were never quite able to force PC manufacturers to prevent people - they only manage to dissuade them, apart from crushing their competitors - from using alternative applications and OSes (though I have no doubts they would just love to be able to... TPM may just be the first step in that direction
)... If you look at it by this angle, suddenly the PC market looks more "fair" and "open", and the recent Mac marketshare gains are proof of that. Heck, even Apple allows you to use Windows on the Mac. Double heck, iTunes+iPod may be a closed system, but there's nothing to prevent you to use other sources or music for your iPod, or using other players with your Mac via drag'n'drop (I know, Fairplay files won't work, but still).
There's this inherently evil quality about mobile phone service providers that neither Microsoft nor Apple (or IBM, or Adobe, or *gasp* RIAA for that matter, or [insert your favorite multi-billion-dollar goddamn greedy corporation] have ever been able to achieve, which is preety damn impressive (and sad) by itself! It seems, also, that the mobile phone manufacturers may love this business model themselves after all, as it forces people to buy new phones every two years... Which is a total dumb-a**ery, as here in Europe people keep buying new phones every 1-2 years anyway, EVEN without contracts. And just look at iPod sales: a ton of them go to people who are replacing 2-3-year-old iPods, that's for sure (there's no way in the world they could grow that fast based on new users alone)... Most of them must know all that, since they compete both in Europe and in the US, so it's not like the manufacturers have something to lose, really...
I sure hope Apple can tame them all like they did with the record companies and the RIAA, and Creative, Sony, etc. IMHO, if there's one company which can make it, it's them... But their iPod phone is in a "worse-than-Zune" situation now (nevermind the quality of the hardware, as it alone won't make it a success... the iPod had an almost virgin, expanding market all to itself, whereas the Mac faced a lot of hurdles throughout its history, and with this iPhone gizmo it may not be different), it seems...
Good luck, Steve!
