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The Irksome Cellphone Industry 272

gollum123 writes "David Pogue of the NYTimes wonders why Congress is worrying about exclusive handset contracts when there are more significant things that are broken, unfair, and anti-competitive in the American cellphone industry. He lists text messaging fees, double billing, handset subsidies, international call rates, and 'airtime-eating instructions' among the major problems not being addressed by Congress. 'Right now, the cell carriers spend about $6 billion a year on advertising. Why doesn't it occur to them that they'd attract a heck of a lot more customers by making them happy instead of miserable? By being less greedy and obnoxious? By doing what every other industry does: try to please customers instead of entrap and bilk them? But no. Apparently, persuading cell carriers to treat their customers decently would take an act of Congress.'"
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The Irksome Cellphone Industry

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  • Industry Response (Score:5, Interesting)

    by Anonymous Coward on Saturday July 25, 2009 @11:36AM (#28818985)

    The industry response [] to these charges has been interesting so far. Apparently Pogue got at least one executive at a major carrier's attention long enough for a PR piece to follow that tries to poke holes in some of the complaints...

  • by Ritz_Just_Ritz ( 883997 ) on Saturday July 25, 2009 @11:40AM (#28819013)

    For example, a couple of weeks ago I began receiving robocalls to my mobile number from some "collection agency." They were obviously looking for someone else so I wasted a couple of minutes of airtime waiting for a human to pick up. After picking up, the twit basically said "we have the right person and you owe us $X" and that the calls would continue. I told them to never call me again and remove my number from their list. Now the robocalls continue at odd hours of the night and morning. When I complained to my carrier (ATT), they basically said "there's nothing we can do about it. BUT if you sign up for this new service for $4.99/month you can block specific numbers." So I complained that they were extorting money out of me to protect me from harassing phone calls. They suggested I complain to the FCC and didn't offer to help at all (other than suggesting yet another monthly fee).

    I'd love to just punt ATT, but they offer the best coverage around here. I'm open to suggestions on how to deal with this. ATT wouldn't even agree to block all "unknown/blocked callerID" numbers for me.


  • Re:Data plans (Score:4, Interesting)

    by hedwards ( 940851 ) on Saturday July 25, 2009 @11:41AM (#28819021)

    Seriously, the voice calls are prioritized first in the networks, and it's practically indifferent to the network operators what the rest of all that already built bandwidth is doing. There shouldn't be lack either, unless if the operator really grossly undersized their networks. The impact around where I live at is zero but the customers get a pretty nice service.

    That tends to be a serious problem in the US, we don't require various communications companies to have the necessary bandwidth to handle things. I'm more familiar with ISPs and their tendency to oversell their capacity, but it wouldn't surprise me one bit if cell networks were in a similar state.

    But then again, it could just be greed and corruption, the same thing which leads the free to provide text messaging service to be so ungodly expensive. Yeah, I realize it costs them something, but it's basically just slipped into messages that are going out already and costs basically nothing to provide.

  • by aaarrrgggh ( 9205 ) on Saturday July 25, 2009 @11:48AM (#28819089)

    I actually prefer the US version of double-billing for phone calls to the European one, as each person shoulders their expenses. The SMS thing is a complete joke though; may they die a quick and painful death!

    I wonder how much clout it would really take to do a multi-technology MVNO that opportunistically selects the cheapest carrier or the one with the best signal, and stops trying to be a "phone company." EVDO, 3G GSM, WiMax, WiFi... all in one handset?

  • by resistant ( 221968 ) on Saturday July 25, 2009 @11:48AM (#28819091) Homepage Journal

    One wonders to what extent the dominant business model of frantic and very often highly deceptive advertising effectively locks out the theoretical competitor willing to deal fairly with customers. If over here a service offers a very nice handset for a hundred dollars or for nothing after a sneaky rebate that may or may not be paid, "unlimited access" (to the Internet) with many lawyerly caveats that make it way less than unlimited, plus some seemingly large number of talk minutes per month that somehow ends up being rather less and which quietly saddles the heavy user with many extra fees, etc., then how exactly does the theoretical ethical service over there attract (the better class of) customers in all the noise and hand-waving?

    Telling potential customers that they will get less and pay more than with advertised plans from competitors, even if they actually get more and pay less, is a hard sell. When everyone else is lying, how do you prove you are not just another sleazy liar? Are there even enough potential customers of the ethical service provider in any given coverage area willing to take their eyes off the shiny new handset long enough to squint suspiciously and intelligently at the fine print?

    There must be a few smaller service providers that aren't crooked, scattered throughout the country. I wonder how well they are doing financially.

  • Re:Impossible (Score:5, Interesting)

    by causality ( 777677 ) on Saturday July 25, 2009 @11:50AM (#28819101)

    You can't legislate somebody or something into being nice.

    Sure you can, indirectly. Force them to compete for their business by making "exclusivity contracts" illegal.

    Yes, but why stop there? Here's what I'd like to see:

    • Eliminate all forms of being locked into a contract. Make all cellphone service a monthly deal like any other utility so that the carrier has to earn your business each month. Y'know, by being competitive.
    • Require that customers can use any phone on any network of the same type, regardless of carrier. I.e. any GSM phone on any GSM network and any CDMA phone on any CDMA network.
    • Ban all locking down of phones so that transitioning to another network does not require the old carrier's assistance.
    • Regard the intentional locking down of cellphone applications as a prosecutable anticompetitive practice. The fines should be at least 120% of any profits made from doing so, as measured by sales of exclusive apps. Of course, the provider of the phone need not support any third-party applications, i.e. Apple would not be expected to support an application that didn't come from their own app store.
    • For GSM networks, require that any fees charged for text messaging state on the bill that cell phones continuously transmit the data structures used by SMS whether or not text messages are sent, so the cost for the carrier to provide text messaging is effectively zero. Require that this statement be immediately below or next to the dollar amount and in at least a 12 point font.

    THAT would be customer-friendly.

  • Android (Score:3, Interesting)

    by lgbr ( 700550 ) on Saturday July 25, 2009 @12:01PM (#28819187)

    This is entirely why Android was developed and is so fundamentally important to the future of our communications. Today, without Android, what we're seeing is the case for network neutrality in the form of ringtone racketeering. Carriers are locking down your cell phone and forcing you to buy music from them. With every passing day we're using our computers less and our cell phones more. The difference between the two is that your carrier has total control over your cell phone while your ISP has no control over your computer. Suppose five years down the road you're still buying phones subsidized by a contract with software loaded onto them by Verizon. These phones end up replacing your desktop because they are now just as powerful. Now every time you want to listen to music, you are forced to suffer through a store worse than iTunes.. and let's even say Verizon forces you to use Bing instead of Google. This is bad for you as a consumer, and this is bad for Google as a content provider.

    Enter Android, where the operating system is open and available at no cost for any number of phones and presumably on any number of carriers. Now we see a future where everyone can run the same software on their phone regardless of carrier. Any time one carrier decides to lock down their phone people will quit buying it. It's not viable. Since we're talking about wireless data, it's easy enough to simply switch to another carrier. Now we've forced the telco's into companies that treat you fairly and compete for your business because they will become insolvent if they don't. We end up with network neutrality and control over our own hardware, and we did it organically without the use of government.

    Android is not the be-all, end-all phone operating system. However, if successful it will force all other cell phone platforms to provide the same level of freedom through market controls.

  • Re:Android (Score:3, Interesting)

    by pwizard2 ( 920421 ) on Saturday July 25, 2009 @12:14PM (#28819291)

    Today, without Android, what we're seeing is the case for network neutrality in the form of ringtone racketeering.

    The worst thing is that the carriers are going along with the ringtone scammers. (the ones who bait unwary people with "free" ringtones and then auto-subscribe them to an expensive ringtone service or worse, spam them several times a day with expensive text messages) Most people don't realize that they could be trapped if they put in their phone number on one of the scam sites; for some reason, a phone number is treated just like a credit card but without any of the consumer protections. The carriers could help to shut these criminals down if they wanted to, but they don't because they get a pierce of the action.

  • Re:Android (Score:3, Interesting)

    by lgbr ( 700550 ) on Saturday July 25, 2009 @12:39PM (#28819491)

    Only if you're an idiot. People should try chucking those cell phones out the window sometime. Being free of such a useless piece of technology would probably make them feel good. No one needs to be "connected" 24/7 in such a superficial manner.

    There's nothing idiotic about it. Cell phones make our lives better. My cell phone has replaced the following tasks that I used to use my computer for:

    • Displaying the weather forecast
    • Alarm clock
    • Looking up restaurants, stores, and directions on a map
    • Tracking my car's mileage
    • Displaying stock quotes
    • Occasional emergency SSH sessions (when I'm out and I need to restart a system service immediately)
    • Some communication with friends
    • MP3 player in the car (yes, I used to use a computer for this)

    The cell phone consolidates your digital camera, camcorder, GPS, MP3 player, handheld gaming device, compass, bubble level, notepad, rolodex, photo album, and hell there's even an app to use your Android phone as a metal detector now. Better yet your phone will replace your dvd player [] before the end of this year.

    My point is that there is no idiocy behind using your cell phone more and your computer less because your cell phone does many things much more efficiently than your desktop can. So there's nothing stupid about using your phone instead of your computer when it saves you time.

  • by nine-times ( 778537 ) <> on Saturday July 25, 2009 @12:58PM (#28819647) Homepage

    I think this is known to be literally the case. I recall something where some Congressman stood on the floor of whichever house he was in and complained that he wanted an iPhone and wanted to use Verizon.

    But hey, at least they're recognizing some kind of problem, and looking into doing something about it. I don't think it's necessarily that they only care about things that affect them personally, but they only understand the problem once it affects them directly. People aren't always that good at sympathy/empathy, and until they've felt the impact of a problem in their own life, complaints about that problem just seem like whining.

  • by ThrowAwaySociety ( 1351793 ) on Saturday July 25, 2009 @01:03PM (#28819689)

    switch carriers, dump AT&T, get a TracFone at your local dept. store along with an airtime card sign up anonymously online with the info from the card and nobody can attach your real identity to your new cellphone, only give the number to those that you approve of

    In my experience with reloadable phones, that would likely increase the number of collections calls. Those operators tend to have a customer base that often falls behind on bills, can't get credit, and ends up using reloadable phones because they can't get a contract.

    They also have a pool of numbers they reuse whenever an old customer drops and a new customer signs up. So it's likely you'll inherit a number previously used by a host of deadbeats.

  • by DaveV1.0 ( 203135 ) on Saturday July 25, 2009 @05:51PM (#28821901) Journal

    I mean it, what qualifies him to make such statements? He has a degree in Music. He has written a lot of application books. As far as I can tell, he has never actually worked as a sysadmin, systems engineer, network engineer, etc. Has he ever worked in the telecom industry? In fact, have any of you who are saying how cheap everything should be ever actually worked in the telecom industry and had to support any of the SMS/MMS applications?

    How are you coming by your cost estimates? Are you including multiple redundant servers in multiple locations? Having to have enough servers to handle maximum traffic, even if that is four plus times average traffic? Multiple ISP connections over different backbone providers? On-going maintenance and power costs? Regulatory costs imposed by state and federal governments, including Sarbanes-Oxley, such as extra lawyers and accountants and dedicated staff to ensure compliance?

    I work in the industry and this is just a small part of what people don't consider when trying to tally costs for "sending txt messages". The systems I work on handle tens of millions of messages on an average day. But, some days, like New Years Eve or Valentine's, we may see a hundred plus of million of message. Because of the SLAs, we have to have the capacity to handle the peak load. After all, you, the subscriber, wants that text message to get there regardless of the traffic load.

Never say you know a man until you have divided an inheritance with him.