Ten Things Wrong with US Wireless Services (Part III)

This is the last of a three part article on what is wrong with the wireless telecommunication industry in the United States today.

5. Longer lock-in – From a one year lock-in period between you and your provider to a two year contract, providers realized that the longer they have you in their sights, the better. A longer lock-in period creates an illusion of lower monthly fees by dividing the cost of the phone unit into 24 months instead of 12 months. If you want to opt out, the carrier is more than willing to receive your higher early-termination fee.

There is also the exclusive vendor/phone deal. You can only get an iPhone on AT&T and a Palm Pre on Sprint. The unavailability of phones in other networks creates an artificial scarcity, jacking up the prices of handheld units.

In most European countries, exclusive carrier/phone pairing is considered anticompetitive and is illegal.

6. Not net neutral – Phone companies, termed as “content gatekeepers” rejected a billion dollar stimulus package from the Obama administration because some conditions of the grant calls for net neutrality. Advocates for net neutrality argue that data should be allowed to flow freely into the network and should not be impeded by gatekeepers in any way. Without net neutrality, the internet will just be another cable tv where providers determine for us what programs to see and how much it costs.

When all 4 wireless firms decided not to accept the stimulus package, it became clear as day that net neutrality is not in their agenda.

7. Competition is not welcome- AT&T and Apple decided to drop Google Voice from the iStore. This was seen by the FCC to be uncompetitive and prompted them to inquire from Apple if AT&T had a voice in deciding what applications are sold in iStore. Google Voice, a VOIP application was singled out by Apple even thought other VOIP software are sold in iStore.

8. Lobbying is the answer to increasing consumer complaints-Increasing consumer complaints is a strong indication that something about a product is wrong and needs to be fixed. Instead of doing the right thing, major wireless service companies are spending customer’s money on lobbyists. Regulators and lawmakers are increasingly looking at a number of issues ranging from exclusive handset deals to SMS rates. The 4 major providers, instead of helping fix what is wrong with US telecoms, are hiring lobbyists to the tune of millions of dollars just to convince lawmakers to give the companies a light touch.

9. Increasing internet reliance made them too powerful – The future is filled with devices all connected to the internet. Smartphones, e-book readers, digital cameras and even home appliances, have some form of web interface in the works. This is a great opportunity for phone companies and they are positioning themselves to be a major player in the electronics industry. They want to extend their telecoms franchises and be some kind of electronic superstore selling goods and services clearly beyond cell phones and communications.

10. They think they own the airwaves – Companies licensed to use publicly owned airwaves are given the condition to meet standards of fairness, equal access and competitiveness. The reality is that they are so far off from making the requirements that you should tell your state and national politicians to make them tow the line.