Opinion: Mobile carriers ring up big money on customers' backs
But Skype and IP-based services will soon eat their lunch
Computerworld - The Senate Commerce Committee, headed by Sen. John Kerry, (D-Mass.), is holding hearings on whether carrier exclusivity deals are good for the telecommunications industry. The most obvious example is Apple's deal with AT&T. If you want an iPhone in the U.S., you have to use AT&T as your carrier. Want a Palm Pre? You're stuck with Sprint. Like the Android G1? Hope you like T-Mobile.
As David Pogue explained in a recent New York Times column, carrier exclusivity isn't a cut-and-dry issue, even if it is an annoying one. In the U.S., most phones can only operate on one type of network. Breaking exclusivity deals, for instance, would only allow you to take your G1 to AT&T or your iPhone to T-Mobile if you're in the U.S. Special versions of those phones would have to be built for use on other networks like Verizon and Sprint.
Even so, exclusivity agreements aren't particularly good for innovation. Although Visual Voicemail is often cited as an innovation brought about by carriers, I had that exact service on Skype four years ago. (If Apple had built a SIP or Skype phone, it could have circumvented the carriers' voicemail systems entirely.) The only "innovation" was in dragging carriers into a more modern tech age, although AT&T hasn't even done that properly yet. Visual Voicemail messages, even though they are simple data files, only work on AT&T's wireless network. If you're roaming or outside of AT&T's network area -- like my remote town, just 30 minutes outside of Manhattan -- you have to wait until you get back on AT&T's network to pick up a voicemail.
Pogue, who ventures into other ugly areas Kerry's committee should be exploring, is right to call out the telecoms on their failings. Whether it's text messaging, billing, international calls or the aforementioned carrier exclusivity deals, the phone companies are reaching into your pocket every chance they get. And Congress can and should do something about it. (Remember, it was Congress that mandated number portability, which was a boon for consumers and, ultimately, the industry, since it allows people to move more easily from carrier to carrier.)
Among the areas Congress needs to explore are:
Text Message fees. What used to be free now costs $10 a month -- or an incredible 25 cents per message. There is absolutely no justification for the cost to consumers. Pogue notes that it's a little fishy for all four major U.S. carriers to raise their text-message fees at pretty much the same time. Agreed. If it looks like collusion, smells like a collusion, sounds like collusion, it probably is collusion.
Double billing is also an issue. I was amazed in Europe when I found out I wasn't billed if someone called or texted me. I could carry a pre-paid phone around for months with my iPhone and I was only billed if I decided to make calls or send texts. In the U.S., both parties are billed if someone makes a call. Wrong number? You pay for that. Company trying to sell you auto insurance? You pay for that, too.
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