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Wireless Carriers Accused of Antitrust Violations
phoneboy writes "From Wireless Consumers Alliance: A class-action lawsuit was filed on April 5 in the U.S. District Court for the Southern District of New York on behalf of wireless consumers seeking to end the control of the handset market by wireless carriers. Read the Antitrust Complaint. While the complaint is fairly short and easy to understand, a summary is in order: The carriers basically dictate required features to handset manufacturers. Phones are tied to specific carriers and cannot be moved between carriers. Carriers refuse to allow handsets on their network they didn't approve. Handset manufacturers thus cannot sell handsets that aren't approved by carriers because carriers will not allow them to be used. All of this rises costs for the consumer, making it difficult and more expensive to switch carriers, and unfairly restrains trade for both handsets and cellular services. As someone who recently tried subscribing to AT&T's new GSM service with an unlocked GSM phone (they didn't allow me to "activate" the service unless I bought one of their phones), I'll be watching this case very closely."
The point of requiring all phones used on their networks isn't necessarily an unfair business practices. The wireless carriers may just want to alleviate the threat of abuse over their networks. In this time of attributing fault to various people in the hierarchy of responsibility, handsets could be potentially damaging if they were modified to be scanners. So, to eliminate that possibility, carriers may examine all potential handsets and only approve the ones that could not easily be modified to do such damaging things. One thing I don't understand, though, is how this could bring antitrust accusations against these companies. The only case I can think of is possibly collusion between the carriers, but with the competition between low rates occurring with such viciousness, I don't believe that is even a possibility.
As opposed to... what? Putting up with explaining over and over why random feature 'x' of gee-whiz gollywag phone doesn't work on their network?
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It's time the governments of the world realize a free market doesn't work everywhere.
Standards need to be set by a regulatory authority. Otherwise competing businesses will not just have the opportunity to create their own standards, they'll be forced to do so. There'll always be one business that'll use dirty tricks, so to survive, all must use them.
The U.S. cell phone market is a joke. Over here in Europe where I live I can buy any phone from anywhere. It'll work with any operator (as long as I pay for their service - duh). It will operate in any country in the world (except the U.S. and some other exceptions). There are no usage restrictions.
A few years ago when I visited the U.S. the phone I rented worked in New York, but not in Iowa! And I'll be moving to Boston next year, forcing me to get a U.S. phone. I hate you people! (well your phone companies at least...)
P.S. Is it true that text messaging doesn't always work between operators in the U.S?
My Sig: SEGV
PCS is not a protocol, it's a frequency band. Sprint uses CDMA, same as Verizon. The only thing is Sprint restricts you to phones which they have the ID of in their database. It has nothing to do with the capabilities of the handset.
---- Dave
Friggin 99.95% of American just "accept" the fact that the phone they buy will only work with 1 company, and don't even know places exist (like USTronics) that see unlocked phones, that you can buy, stick a Voice Stream SIM into, and when you travel to EU or Japan, or anywhere, can just get a "local SIM" and use the same phone. As an American, it must be said anyway, AMERICANS ARE IDIOTS!!! (because no one educates themself as a consumer).
TriBand GSM (900/1800/1900) phones that are FINALLY hitting the US shores in SOME number are going to be the ONLY hope we have (in the US).. Because when Americans see the LOCAL ADVANTAGE (always on data capacity and text messages) they may start to see the international roaming capacity, and international compatibility.
It's down to a simple fact that the US has done exactly the oppisite of the rest of the world, they have SEPERATE systems for each cell carrier. Where in EU and Japan, ane the rest of the world the realized the fact that one protocal was enough and compete on service (and companies just buy air time on the tower as used, covering the whole landscape) and compete for customers.
You can be in the Black Forest in Germany and get Cell service.... Because, it's uniform service... You may be Roaming, sure, but there are NO dead spots. WHEREAS, you can be in New York City in the USA, and drop calls, because YOUR company doesn't have a Cell tower there, because every company has thier own system.... For a country that covers SOOO SOOO much more land per population, isn't this not only a worse idea, but an idiotic idea?
So, I agree, GSM is the future, and it's about time Americans get off their asses, learn why the service they pay for sucks, and pay a little more for something that is COMPLETELY worth while. GSM should be an American standard.... It works in Europe, and now the Americans are in the Technology Dark Ages... (at least as far as cell phone service)
You example "Thats like requiring car manufacturers to make sure all their vehicles can use diesel, gasoline, petroleum, electricity, fuel cells and ethenol, and have them interchangable." is simply wrong.
The present situation is as if you were forced to buy your gasoline for your Ford only from companies associated with Ford. Or, if you move from one state to the other and need a new number plate, you would have to buy a new car.
I wonder how much of this comes as a result of pressure from handset makers. By not allowing handsets to be transfered between wireless companies Motorola (or whoever) might get to sell two (possibly identical) handsets instead of one.
Also, this restricion might allow the wireless companies more better deals with the handset mfgs. As far as I can tell it would generally be in the best interest for the wirless company to allow any handset (lowering the barriers for cusomters to switch to their service).
So how much of this is the result of wireless companies being bullied by handset makers (just has PC mfgs are bullied by MS)?
~Adam
SPAM
They ALL suck. I work for a small company, very tight, but small. There are 8 people in the US, spread out pretty even. We all travel and visit each other. We all picked our own service. Combined, we have tried, SprintPCS, Cingular, AT&T, Verizon, VoiceStream, just about everyone. Of the 8, 5 of us switch yearly looking for something better. Guess what? NOTHING IS BETTER. They all suck, on diffrent but equal levels.
And lastly, New York City? Bah. Your trolls phase me not. No Troll, I drop 3 calls a week in NYC right now with SprintPCS (what I count as MY drops). Total, I drop about 8 a week calling other guys in my company (one AT&T and one Verison) in NYC. NYC to NYC calls, droped.. CONSTANTLY. Not a troll. Given that no matter wich of us three call who, they are always droped calls, I would have to say, even NYC doesn't have cell service. You? (Minus October of 2001, at which point NO ONE DROPED A CALL FOR A MONTH!!! They trucked in towers and put them everywhere for a month after 9-11, but it's dropping back down to shit service again).
Yes, you named a ton of companies that have agreements.. and SHARE towers. But, it's not the same.. at all, and I can prove it beyond a doubt, if you care to learn a little.... See Below:
Look at a local Cell tower. How many antennas do you see? 2 types? 3 types? 4 types? Of what, the 5-6 avaliable services? Consider Europe, where there is only 2 general types (Both GSM, if you can call that 2 types). And they are everywhere in EU, yet there are countless places you can find no service in the US.
So, shareing service is there in the US, but that doesn't conclusively prove that 25 cell companies using 6 shared services would be better coverage than 25 services sharing 1 universal service type.
Face it, if you ever used a cell phone in the EU and the US, you KNOW the service is better than the US. If you ever bought a Coke or paid for a parking meter with your cell phone, you are LAUGHING at US cell phone service with the rest of the world.
As someone who lives outside the US, I can say that we can buy handsets from anywhere (even outside the country) and buy a sim card from any carrier and expect it to work flawlessly.
Maybe the US are just technologically inept?
Or more likely, it's just the effect of companies too comfortable with their power.
Here, we can send SMS from any carrier to any other carrier, even from GSM network to CDMA ones.
We can change carriers and keep our phone no.s.
So why can't the US, with a market 100 times larger to spread the cost over, do the same thing?
This is where the problem lies. Why is the Wireless Provider the one who sells and supports the phone?
In the Tech industry, its the hardware manufactures that sell and support the hardware, and you can by a PC with a modem, Token Ring, or Eithernet or all of the above. The Internet Service Provider only has to support the network and protocol - PPP, DSL, CableModem, Not Every brand PC out there. ISPs would loose lots of businiess if they required you to to use only their computer hardware and software.
I'm not a Wireless Industry expert but it would seem to me that the Cell phone manufactures, Motorola, Nokia, Ericson, Samsung, etc need to change thier business model, to include sales and support.
Customers will win big when they can choose their phone, with multinetwork capabilities. They may pay more for it to access multiple Wireless providers, but they get the choice that way, and the Best Hardware Provider and the Best Network Provider both win.
I can't see any possible way for this suit to succeed on its merits. The courts have held, again and again, that a "unilateral refusal to deal" is not a violation of the antitrust laws. As far as I can tell, there isn't any allegation the companies conspire not to use each others' phones -- and, of course, there would be no reason for them to conspire _not_ to cooperate.
But, like most class actions, this suit can succeed without the slightest hint of merit, since the real point is just to extract fees for lawyers by making it too expensive for the defendants.
I Can't Believe It's A Law Firm, LLP does not necessarily endorse the contents of this message.
Thats like requiring car manufacturers to make sure all their vehicles can use diesel, gasoline, petroleum, electricity, fuel cells and ethenol, and have them interchangable.
No, it's like telling a gas station that regardless of if you're driving a Chevy Impala, a Ford Mustang, or a Mercedes that they have to be able to fill your tank up.
"Oh, sorry, we're allied with GM. Did you consider selling your VW and buying a Geo? That way, we could sell you fuel."
If you're in a town where only general motors cars can get fuel, and you really need gas for your BMW, you're S.O.L., even though there's not a good reason why you can't buy fuel there: it'll still work in your car.
If a place only sells diesel fuel and you need regular unleaded, that's one thing. But two cars that both can use premium should be able to buy premium from the same vendor.
As most of us know, there are six widely used technologies, Analog, GSM, CDMA 800mHz, CDMA 1900mHz, TDMA 800mHz, and TDMA 1900mHz.
I don't think this is the problem we're discussing. A dual-band (800/1900) CDMA phone will work just fine on the Verizon or SprintPCS networks if they would let customers use them. And I'm not talking about using an ancient CDMA 1900 phone that nobody will know how to set up, I'm talking about a brand-new phone without a subsidy lock. I for one would pay $500 for a phone if I knew I could use it with any service provider (who uses the standard, be it GSM 1900 or CDMA).
Another reason they require their own handsets deals with the fact that many companies (AT&T and Sprint for example) upgrade the software in the phones before sending them to the stores.
This isn't required - they add logos and tailor how the user interface works so that the end-user can figure out their phone more easily. Non-customized phones will still work perfectly well on their networks. How about the service providers say, "If you want to use a non-subsidy-locked phone on our network fine..But we won't help you figure out your phone. Complain to us only if you get lots of dropped calls."