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Antitrust Pressure Mounts For Wireless Providers
Over the past few weeks, the cellphone industry has been criticized on a variety of subjects, from distracted driving to handset exclusivity deals to everything else that's shady within the industry. Verizon's CEO has now responded, addressing what he claims are "myths" about standard practices. Reader DJRumpy points out that the chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights has been calling for an investigation into whether competition is being stifled through many of these practices, "including possible text messaging price fixing and questionable roaming arrangements." Apparently the new antitrust chief is hitting resistance from within the government over the aggressive inquiries into this and other major industries. However, a small victory was achieved the other day when the National Telecommunications and Information Administration "told incumbent carriers that they'll have to prove their cases just like everyone else if they want to challenge broadband grant proposals from smaller players." There is also legislation in the works that would require states to impose a ban on text messaging while driving or lose a significant portion of their federal highway funding.
That'll teach you to charge me $40 for roaming last month when I never left the city, motherfuckers!
SJW: Someone who has run out of real oppression, and has to fake it.
...is pro-rated fees for breaking a contract early. If I decide Sprint sucks and break my 2-year contract after 18 months, I should have to pay the full $200 fee. I should pay $50.
I have a bad feeling about this...
WTF? I regularly post to slashdot while I'm driving to
echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;
No, you should have to pay whatever the contract, which you signed voluntarily, in good health and sound mind, stipulates.
In Soviet Washington the swamp drains you.
The Consumerist reported that Verizon text messaging is marked up by 7314% when compared to the relative cost of other data transfer services. Prices for text messages have also risen from .10 to .15 to .20 in recent years, even as the costs of data throughput have decreased.
( http://blogs.consumerreports.org/electronics/2009/06/text-messaging-rates-overpriced-att-aprint-verizon-t-mobile.html )
The reason for this is simple: Greed and collusion.
Consumer Reports has this to say on the subject:
"As CU has noted, less than four years ago rates to send a text message were 10 cents per text at the nation's four big wireless carriers: AT&T, Sprint, T-Mobile, and Verizon Wireless. Each company then raised rates to 15 cents, then to 20 cents.
To CU, these text-message rates, along with exclusivity deals for certain cell phones, exemplify the need for âoemore oversightâ into the wireless marketplace, to âoedetermine if government intervention is necessary.â
------ The best brain training is now totally free : )
On the one hand, texting while driving is about as dangerous as drinking and driving. It takes eyes and concentration off the road and puts everyone else at risk. It is an activity that ought to be illegal.
But first of all, do we want the federal government having that kind of control over the states? The actions taken by the federal government ought to be carefully weighed with the impact it will have on all states. National defense, public educational standards, immigration and border controls, healthcare. These are the things that Washington ought to be concerned about. Not some 16 year old field hockey player driving her mom's Durango with her boyfriend's hands between her knees and her eyes on her iPhone.
Secondly, what are we actually defining as texting? Technology changes so rapidly that a measure like this can only be relevant for a short time.
Leave the texting laws to the states. Don't let the federal government bully the states into making the laws.
What's next I won't be able to brush my teeth or shave while I drive either.
Just because you are wrong and I called you out on it doesn't mean I am a Troll.
Sprint and T-Mobile are screwed because they cater to bottom feeders and now they're complaining.
How is T-Mobile "screwed"? If you live somewhere where they have good coverage (most urban areas and quite a few suburban ones) they are a great option. Much more affordable than Verizon or AT&T and much better customer service.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
It is a terrible abuse of power for the U.S. Congress to try and force states to ban text messaging while driving. I have no problem with states doing so, but it is something that should be done at the state level not at the federal level.
One of the advantages of the U.S. system is that various states can try different approaches to address problems, each with their own idea of the best way to fix the problem. Then other states can adopt the approach that best solves the problem with the fewest negative unintended consequences.
I am not convinced that there needs to be (or should be) laws against text messaging while driving. Text messaging is only one of many things that should not be done while driving (applying makeup, reading a book/newspaper, sorting one's CDs, etc). It should not be necessary to pass a law specifically against these things, but if it is, it should be done at the state level.
The truth is that all men having power ought to be mistrusted. James Madison
What if people who feel the need to text while driving are provided with a "heads-up" keyboard display on their windshields like fighter pilots have? Entering text could be a simulation of "shooting" the desired virtual key via buttons on the steering wheel.
Not practical at the moment, I'll admit, but it would be easier than prying the devices out of folks' hands. Think of all the fun that could be had by blasting away at the idiot in front of you. Stress reliever?
Disclaimer: I do not own a cell phone and behoove all drivers to concentrate on that task.
I'm afraid that the only way to prevent people from texting while driving is for the companies to shutdown that feature, permanently.
But, as it is a large cash-cow for them, they will not do that as a preventative measure. Quite a few people will die in accidents where someone was texting and studies will have to be done to show what we already know - if you want to talk or text someone, pull over to the side of the road FIRST. Don't drive distracted; the life you save may be someone you know.
If "disco" means "I learn" in Latin, does "discothèque" mean "I learn technology"?
"There is also legislation in the works that would require states to impose a ban on text messaging while driving or lose a significant portion of their federal highway funding."
This is the same crap the Fedgov pulled when their attempts to force a minimum drinking age on states got shot down in court. It's time 34 states got together for a constitutional convention and crammed an Amendment down the Feds' throats to put an end to stuff like this. It can be narrow in scope to just cover the highway funds, but the effect will be that the Fedgov will be put back in its place and will have to think twice before trying to push the states around again.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
Well do you? That's the Fat Lady tuning up to sing the funeral dirge for the telecoms death grip on the wireless industry.
Let the blade of the guillotine fall and fall again! Make them feel the icy bite of the steel on their flesh, realizing the cold hard fact: Don't piss off the paying public, you may wind up in the ditch.
First rule of holes; When in one, stop digging.
exactly, my mom has a cheapo phone that only makes phone calls
we're starting a market cycle where people want nice smart phones like the iphone, pre, or one of the others. Sprint and T-Mobile have mostly cheapo phones. if you want the iphone you go to AT&T. If you want a BB Tour you go to Verizon, but i think Sprint has a few as well. People are even willing to pay extra for these phones. Apple is selling iphones as fast as it can make them and it's well past the cult of steve core customers.
Sprint got the idea and helped pay for the Pre. T-Mobile had and exclusive on the BB 8900 which was a piece of junk and not even 3G.
If Sprint and T-Mobile want to succeed they need to pony up cash to help pay R&D costs for nice smartphones if they don't want to bottom feed the market anymore.
there is a $49 iPhone on sale now because Apple can think ahead further than the next quarter and Sprint and T-Mobile with their crappy phone selections are running to the goverenment
Also, AT&T drops a shit ton of calls compared to T-Mobile. At least here.
I want to lease a Ferrari F430....its only going to be like 10k a month. That's not so different from the $0 a month I pay now for my car, so how about you pickup the difference since you don't seem to care about the price differences.
I use Verizon atm, and I noticed that if you open an account, and get a subsidized phone by signing a 2 year agreement you get whatever the rate is. Why, after two years, when theoretically you have paid for the subsidized phone, doesn't your monthly bill go down. Now if you upgrade the phone after 2 years with a 2year renewal, I can see keeping the price the same. But otherwise, they should be required to tell you how much of what you are paying each month is going to paying for the phone, and drop that cost when the phone is paid for.
Also, if you bring your own phone, you don't get a reduced rate, you just don't have to sign up for 2 years.
Sprint DOES prorate the ETF for all contracts signed after November 2008. However, there is still a minimum of $50, so your ETF after 18 months would be $87.50
See http://nextelonline.nextel.com/en/services/termination_fee/early_termination_fee.shtml
How can you not say that there is collusion and anti-trust practices going on with text-messaging. A study was posted on /. a while back that it is less expensive per byte of information sent to the hubble than a text message.
Collusion is clearly seen in Apple's recent ban on the Google Voice application that allows for free texting over a data plan that YOU THE CONSUMER ARE PAYING FOR. Furthemore, how can you justify the price increases over the years for the same product? Technology works by decreasing prices while at the same time increasing service, not by offering the exact same service at a higher price over time.
An inventor is a man who asks 'Why?' of the universe and lets nothing stand between the answer and his mind.
in this case a lot of phones are lossleaders because they sell you a phone for less than retail price and make up the difference on the monthly charges.
You just cited what I believe is the worst aspect of the American cell phone industry as a benefit. I understand a lot of consumers don't want to drop $150-400 on a cell phone at the beginning of their service so it's wise for the cell phone companies to offer plans which dramatically subsidize the price of the phone by spreading it across a 2 year contract. However, if I bring my own phone I can't get a better rate. I still have to pay the "subsidize the phone" rate price even if I already have paid for the phone. And pay as you go rates are generally higher cost per minute than the *regular* plans.
Check out my lame java blog at www.javachopshop.com
wow. what a twisted way to blame the small timers.
Of the three of the 'big four', I have shitty experience with AT&T and Verizon. They have "the best network/fewest dropped calls" only in their ads. Don't get me started on their pathetic customer service, their lock-ins, they charges. T-mobile is godsend compared to those two.
Now talking about your 'great phones' argument - in my opinion, that is the crux of the problem. In fact, AT&T and Verizon are out-muscling other small time providers just because they have big bucks and get the 'best' (I wont call them the best, but that's another discussion) phones, and in turn, screwing up others who don't have that much of money.
Fuck 'free' phones - they are never 'free'. and fuck AT&T and Verizon. I will never ever do business with them - even if I have to give up my mobile phone.
HTC Magic. T-Mobile has been putting money into Android phones. What the hell are you on about?
Besides that, you can unlock an iPhone and use it on T-Mobile's network. The support guy there even offered to help me set up the phone and get the Data plan sorted for this if I chose to go that route. I opted instead for the Magic, but still, you aren't making any sense.
few years ago all phones were about the same in features and people shopped based on price and coverage. Sprint decided to bottom feed the market with it's pay cash in the store machines to cater to illegals and people who don't have bank accounts or internet access.
Is there any evidence that suggests Sprint was trying to cater to illegal residents (of the US, I assume)? First of all, note that there is a huge population of legal non-resident aliens who work in the US. Second, the areas of my city heavily populated by foriegn nationals are littered with Cricket stores; THEY are the ones who seem to be aggressively pursuing this market. Third, the core of Sprint's subscriber base for many years has been businesses. This comment seems like an inflamatory remark intended to imply that Sprint is blatantly supporting illegal activity.
VZ and AT&T helped to invest in new phones by giving money to Apple and RIM in exchange for exclusive agreements.We're now in a market cycle where people want a good phone that can do everything since coverage is about the same everywhere.Sprint and T-Mobile are screwed because they cater to bottom feeders and now they're complaining. they want the new phones without paying to develop them. AT&T paid Apple almost a billion $$$ to develop the iPhone.
Yes, AT&T and Verizon have engaged in exclusivity agreements with phone developers, as have Sprint and T-Mobile. This is not a new practice, though this comment seems to imply that it is. I'm not sure what the assertion that Sprint and T-Mobile "cater to bottom feeders" means. Does "bottom feeder" mean "a consumer who doesn't want to be locked into an expensive long-term contract?"
Sprint's answer was to fund the Pre which is still in beta. no wonder no one was allowed to see it before launch. if Sprint and T-Mobile want customers they need to help pay for a nice phone on their network with a decent release and all features working. Unlike the Pre which was a disaster. Check all the stories on BoyGeniusReport. Sprint screwed up and is now running to the government.
While AT&T and Verizon "invest in new phones", Sprint "funds" a phone "which is still in beta"? Haven't there been numerous firmware updates for the iPhone since its debut? Also, does "is still in beta" mean "is generally available and for sale on the market?" In my profession, "beta" testing refers to a test cycle that preceeds general release and sale of a product.
The strange thing about this comment is that it appears to suggest that Sprint is somehow abetting criminal activity, throws its money away by supporting new product development, releases the product before it is ready, and is demanding help from the government due to rescue it from its ineptitude. By the way, precisely what is the nature of assistance Sprint is asking from the government? I didn't see that in any of the article links.
At the same time, this comments implies that AT&T and Verizon's similar practices are okay.
It seems to me that phone exclusivity deals, price-fixing, and costly long-term consumer contracts are equally bad regardless of what company uses them. Or am I missing something here?
"Why, after two years, when theoretically you have paid for the subsidized phone, doesn't your monthly bill go down."
Because that would be a disincentive for you to coming in and pick up and new phone and another two year slavery term.
I will not mourn that which I never had to lose. - Unknown
Step 1) Use "vendor lock-in" to prevent the use of competitor's phones
Step 2) Don't allow any "allowed" phone to have features such as requiring confirmation to switch to high-priced "roaming" towers
Step 3) Claim that it's the responsibility of consumers to do something which should be a basic feature of any phone
Step 4) Profit!
-- 'The' Lord and Master Bitman On High, Master Of All
No, it doesn't. No one forces you to have a cell phone, no matter what possible reason you come up with.
So by your logic NOTHING is a cartel or monopoly.
The original Bell Co. which didn't allow any other telephone other than those they create really wasn't a problem. Why, because according to your logic no one was making you have a land line right?
Standard oil really wasn't either a monopoly right? No one was making the public own a car or own a car that used oil right?
Huh? Where is Sprint complaining? They still get exclusives, and the people complaining are consumer advocates and government anti-trust regulators.
Yes, and that's why Apple kept the iPhone a secret too, right? In the real world -- beyond your conspiracy theories -- consumers are getting screwed and complaining, and at least someone in government is listening. This has nothing to do with how well Sprint or T-Mobile is doing or who their customers are.
Step 2) Don't allow any "allowed" phone to have features such as requiring confirmation to switch to high-priced "roaming" towers
Except that every single phone I've ever seen offered by Verizon does offer the ability to disable roaming. So try again.....
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Verizon. You then charge 5 dollars a month for 400 TEXT MESSAGE
Correct me if I'm wrong Slashdot.... but don't....
TEXT MESSAGES = DATA ?
And I'm not even going to go into how SMS is transmitted... it's a total racket.
Seriously. Fuck wireless providers. Especially Verizon.
Did I mention fuck Verizon?
"--wine; a constant proof that God loves us, and loves to see us happy." --Benjamin Franklin
Count yourself lucky. In Canada if you bring your own phone and don't sign a contract you pay more.
Oh, and cancelling the contract isn't $200, it's $400. Plus another $100 for your data plan.
If you look at the link: http://en.wikipedia.org/wiki/List_of_United_States_wireless_communications_service_providers, you'll notice a large number of other carriers. There are at least half a dozen other major options as well, so if you don't like AT&T's idiocy, well, go someplace else.
http://www.prepaidreviews.com/
Almost all of these prepaid carriers also offer traditional service. There's Virgin Mobile, Cricket, MetroPCS, STI, The one 7-Eleven is offering(shoot, just go to your local 7-Eleven and check out the large display of secondary carriers in your area), and many others.
I went with T-Mobile, though, since their flex-pay is nice and they recently changed their plans. There is no contract or itemizing or idiocy any more. You pay $35-50 a month and you get the full package(free weekends/evenings/etc are all now standard). Most people call the same 5-6 numbers all the time, so it's a no-brainer as well. Their "Fave 5" service really works since it also gives free *incoming* calls from those numbers as well as in-network calling(also free). Texting is still hideously expensive, but if you don't need it, the service is worlds better than AT&T. Yes, I had to buy a phone. $60 on sale. The total was $140 out the door including a couple of accessories, tax, and so on. They didn't even run my SSN or credit check or anything.
Why bother with a contract at those prices?
Previously I was using Net10 - also a good alternative. Buy the phone on sale at Target or WalMart ($20) that comes with 300 free minutes. Net10, if you sign up online, also has a special $10 a month option if you set it up to automatically deduct funds from your account every month. Perfect for low volume callers. By far the least expensive way to get a phone.
I am sick of the federal government overstepping their power by trying to force states to pass laws or lose funding. This is just like what happened with raising the drinking age. The federal government needs to stop sidestepping the system and let the states make decisions for themselves.
It seems to me that phone exclusivity deals, price-fixing, and costly long-term consumer contracts are equally bad regardless of what company uses them. Or am I missing something here?
No, not really. You just don't have the GP's conspiracy theory mindset. In the real world we know that Sprint is actually working in collusion with the Gnomes of Zurich to lay waste to Western Civilization, as is clearly spelled out in the Sprint contract.
TFA is shite. He talks about the industry being under fire - but instead uses half his post describing problems caused by CUSTOMERS.
If half a million people in my home state decide to commit suicide by sticking their fingers into live electrical sockets, this suddenly becomes an electrical industry problem? Maybe if most of the suicides are children, then yeah, we'll hear "think of the chidren", and see more safety regulations passed.
People texting and running at the mouth while driving isn't an industry problem, at all. It's a genetic problem. A problem solved by applying some of Darwin's reasoning.
BTW - I hope to never hear any subhuman crying about their sister, brother, uncle, or best freind dying in an auto accident because they were talking/texting instead of paying attention. I will be forced to explain that said relative or freind wasn't fit to live because he was genetically inferior.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
Seconded. I actually use T-Mobile as my business phone. I travel all over with it... I even got a decent data feed while driving up in Alaska, some semi-remote parts between Anchorage and Fairbanks. Even though our company gets me an 8% discount on AT&T service, I'm not switching because T-Mobile has been so good to me.
My blog. Good stuff (when I remember to update it). Read it.
I use Verizon atm
So funny... I read that as "I use Verizon Ass-to-Mouth".
Support the 30 Hour Work Week!!!
exactly,...
Exactly what? The PP basically said that T-Mobile competes on service rather than shinies. That's why we're with them after ditching the nightmare that is Ma Cell. My BB Pearl is just fine, thank you.
People who are more interested in the gadgets will go with AT&T or Verizon, but people who want solid service will drop them for T-Mobile. (And then there's the folks who think Sprint is a good idea, and I pity them.)
Since switching from AT&T to T-Mobile, I can receive cell phone calls at home. My house, BTW, is in a flat part of a dense urban area. Not like it should be HARD for AT&T to get service there, but they weren't interested in our complaints.
Don't you wish your girlfriend was a geek like me?
Oh, and cancelling the contract isn't $200, it's $400.
;-)
Yeah, but that's $400 Canadian, so it's no big deal.
But at least its free to see a doctor, so maybe it's a wash.
Er, no. Free market capitalism has nothing to do with competing for customers, it only has to do with competing for profits.
Either way, it has to do with competing. Without competition, you don't have a free market. Therefore, when required, the government steps in with regulation to ensure competition.
The goal is the efficient distribution of resources. Cartels and collusion work against that end, so they're illegal.
Don't you wish your girlfriend was a geek like me?
During Dubya's reign, Federally-funded sex education programs had to adopt an abstinence-only curriculum, which included many assertions that were contrary to scientific evidence.
California didn't take the money, and kept teaching accurate materials. They were the only state that did this, but many large school districts also gave up Federal funding in deference to teaching real sex ed.
So, yeah, states can do it if they feel it's really important to protect the rights of their citizens to send text messages while hurtling down the highway. It's unlikely they will, though.
Don't you wish your girlfriend was a geek like me?
...If Sprint and T-Mobile want to succeed they need to pony up cash to help pay R&D costs for nice smartphones if they don't want to bottom feed the market anymore. There is a $49 iPhone on sale now because Apple can think ahead further than the next quarter and Sprint and T-Mobile with their crappy phone selections are running to the goverenment
No, you clearly don't understand how the industry works. If T-Mobile has a crappy phone selection, it's because those are the phones they chose from the device manufacturers. Why they have those devices is because they gave the device manufacturers crappy requirements for the phones they want next quarter. I work for a device manufacturers and we offer T-Mobile the nice high-end smartphones, but they don't want them, or take only a small number of them. The operators (e.g. T-Mobile) don't spend a dime on R&D for the phones -- they are carriers. The operators may help pay for marketing, though.
There has been no evidence of cartels or collusion in the wireless industry. What there is evidence of is that all the carriers have decided, for themselves, that $0.20 per text message is the price (currently) where they maximize their profit. In order to say that there is some sort of collusion, you must show that at least one of the carriers could increase their profits (at the expense of the other carriers) by dropping the price of a text message, that the carrier knows this, and that the carrier has not done it. IF that were the case, then there may be an argument that they had colluded or formed a cartel, and made an agreement that no-one would drop the price.
If we assume for a moment that there is no collusion, what would cause a carrier to drop to price of a text message? How would that benefit them?
Finally, what do you think the wireless landscape would look like if in fact there were really no competition? What would the price of a text message be? Would there be any 'one price' plans? Would there be any rollover minutes? Would there be any same carrier free calls?
Please hand in your geek card on your way out.
http://en.wikipedia.org/wiki/Asynchronous_Transfer_Mode
http://en.wikipedia.org/wiki/Atmosphere_(unit)
Escher was the first MC and Giger invented the HR department.
The thing that bothers me the most about the semi(?)-trust that major carriers have is text message pricing. I have a tracfone, and I pay roughly $0.03 per text sent or received (using att's network no less), and similar prices can be achieved with a texting package. If it's not price fixing, it certainly is price gouging (7 times the price because I don't have a texting plan? please).
You're right! It's only $459 US! That's SO much better!
That joke is only funny when the exchange rate is something lower than 90%.
According to XE.com: 400.00 CAD = 366.871 USD
I did not say "disable roaming".
-- 'The' Lord and Master Bitman On High, Master Of All
Why was the parent modded a troll for pointing out those items which the U.S. Constitution says belong in the hands of the Federal government? You may disagree, but I think this is a real abuse of the moderation system. I, for one, would like to hear how the federal government's involvement in, say, setting public education standards has benefited the country. Have we really come to a point where someone is a troll simply for taking the Constitution at face value?
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?
I was including the data plan. $500 CAN.
There has been no evidence of cartels or collusion in the wireless industry. What there is evidence of is that all the carriers have decided, for themselves, that $0.20 per text message is the price (currently) where they maximize their profit.
When all providers of a service offer extremely similar options at extremely similar prices, that implies either commoditization or collusion. Given the rate of innovation and change in the cell phone industry, and the statistics that imply the market isn't quite saturated yet, commoditization is less likely, so it would make sense to investigate collusion.
The investigation would either provide evidence or fail to find evidence (which either means that it's a natural market phenomenon, or that they're really, really good at keeping their communication secret).
Don't you wish your girlfriend was a geek like me?
Where is the problem with exclusivity? And where is it written that a service must be sold with the price set to the cost?
Exclusivity is a valid and widely used tool for marketing. Supermarkets have "house brands," stores like WalMart and Radio Shack have their own brands, why is it worse in some way to have an item, say the iPhone, available from only one carrier? If you want the phone you go to the carrier. And if iPhone were available on all carriers the Android phones wouldn't have taken off as fast, and now the consumer has two smart phone operating systems to choose, and one is on hardware from many vendors.
Text pricing seems to be another competitive area, some vendors charge by the message, some have a bundle, some like Boost include unlimited text, etc. And dare I say it, as the price goes up people use it less and the market adjusts the price, like gasoline, caviar, or any other item. Text cost will follow the same curve as long distance, unlimited will be a selling point and the price will fall. Without the need for yet more complex laws.
It's all about choice, and cost, and there's plenty of room to make a choice of phone, carrier, and plan, without having the government decide what we are ofrfered and setting the price.