Groups Again Take Aim At Cellphone Subsidies
from the teeter-totter dept
There's been a constant clamor over the past few years from some consumer groups that want to see mobile operators forced to stop locking handsets they sell, so that phones will be able to work with any compatible operator. The argument is that locking handsets to operators diminishes the competition among the operators, particularly when operators compete by getting exclusive deals on particular devices (such as the iPhone, which is locked to AT&T). But it's always seemed that the groups are looking to have their cake and eat it too: the locked devices and contracts operators use allow them to recover the subsidies they spend to drop the upfront costs of handsets. So if the groups want to do away with locks and other techniques that support the subsidies, that's fine, as long as they're also willing to accept higher device costs. But somehow, that part always gets left out, just as it has in stories covering the latest push by the groups (via MocoNews) and some smaller operators to get the government to outlaw handset exclusives. If these groups want to eliminate cheap handsets for consumers, they need to explain that -- or explain exactly how these regulations they want won't serve to lower service prices, but offset that with much higher device prices.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: exclusivity, mobile phones, subsidies
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iPhone
Verizon and Sprint are both CDMA-based networks, so they'd be completely unable to sell or support it anyway. Or are they going to force a manufacturer to build and test a CDMA-based device just so someone else can sell it?
And the "competition" arguement is baloney. Or is it merely an coincidence that we're now seeing Bold's and Storm's and Pre's and Vu's all suddenly competing in the marketplace against the iPhone?
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Re: iPhone
"Competition" among operators, not manufacturers.
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Services should be sold separately to device as they are in Europe. I get incoming calls for free, incoming text messages for free, unlimited data for 9 € a month and back when I was on prepaid it was close to impossible to spend more than 25€ a month on credit.
I went to visit my mom during Christmas and I needed to submit so many forms of documentation just to get a prepaid SIM card. Where I live, Finland, it is as easy as buying a pack of chewing gum or a bottle of water.
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You've confused me Carlo
Seriously?
Oh, come on, you must have been kidding.
April fools isn't for a few more weeks yet, Carlo.
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1. Quality of service. Since you can now easily switch your service provider, the telco's got to make sure you get the best service.
2. Lower call charges - here in India, it typically costs 2-3 cents per minute to make nation wide calls - even while roaming, and all incoming calls/sms's are free
3. You can club *any* handset with *any* plan from *any* service provider
4. Since there is no "exclusivity" for hand-sets, prices tend to be competetive (not subsidised though)
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Re: WHATT???????
2.Oh, thats the answer, India.
3."Club" your handset????
4.???????
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Re: Re: WHATT???????
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Re: Re: WHATT???????
2. Simple economice, more compitition(whether its phones plans or new contracts) will drive prices down(especially on new contracts).
3. He means you could for instance, take an iphone and use it on t-mobiles 3g network where they offer unlimited data for about $30 a month. Way cheaper than AT&T.
4. There is no such thing as jail breaking a phone because no phones are locked. Once you buy a phone you can use it with any service provider without breaking any laws.
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Re:
The obvious reason is contracts reduce competition, except for getting people to sign contracts.
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Think again
Imagine if cable/satellite TV providers locked TVs to their service. If you wanted a new TV, you had to buy from them and if you switched providers you had to throw away your TV and buy a new one. I don't think many consumers would stand for that, so why do it with cell phones?
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Subsidy from contract not lock in
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You can buy unsubsidized phones
You CAN buy an iPhone without a contract - it's just $500/$600.
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Re: You can buy unsubsidized phones
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Re: Re: You can buy unsubsidized phones
If AT&T was competing with T-mobile for iphone sales and contracts, your phone and service would be cheaper.
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Re: Re: Re: You can buy unsubsidized phones
Your satire is masterful!
It is not illegal to unlock your phone, provided you have purchased it. Though there are those who would prefer it to be illegal.
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Re: Re: Re: Re: You can buy unsubsidized phones
This is why you can buy an iphone from third parties, but never see a company or entity selling unlocked iphone in mass quantities.
Maybe you could clarify the issue, maybe with a link to a definitive source.
I understand your position though. If I buy somthing, I own it and i do what I please with it.
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Re: Re: Re: Re: Re: You can buy unsubsidized phones
OK, then why did you choose to present it only one way? That seems rather deceptive.
Maybe you could clarify the issue, maybe with a link to a definitive source.
Maybe since you shot your mouth off about it being illegal, you should do the same.
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Re: Re: Re: You can buy unsubsidized phones
unlocking phones is not illegal. there is even a proviso in the DMCA for unlocking phones.
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Re: You can buy unsubsidized phones
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> won't serve to lower service prices, but offset
> that with much higher device prices.
I find the argument that these phones cost many hundreds of dollares ridiculous.
For the volume in which these phones are produced, they
should be considerably cheaper than computers. But, they
are not. Why?
Personally, I think that the public has been duped into
believing that they must be expensive. Well, there's
nothing particularly expensive or special in any of these
phones.
Has anyone ever done a cost breakdown on the phones --
in volume?
I bet at least 50% (at the very least) of the cost of
popular phones is markup.
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Re:
Every other phone is cheaper.
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Re:
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I think people are missing the point
As it stands now, AT&T wants to make it just cheap enough so a majority of people can afford it, but still rape them. If t-mobile offered the phone, they would be competing for contracts, rates and subsidies would both go DOWN.
There's nothing to be explained Carlo, How does this not make sense.
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stupid
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Re: stupid
For one, that's not really a viable option. Unless, they've changed from the last time I checked, AT&T charges the same for a plan whether you get a phone or not. So you still pay for a phone even if you don't get one.
For another, even if you pay for the phone up front, it's still locked and crippled with whatever restrictions AT&T wanted on it.
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Cell Phone Subs
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Re: Cell Phone Subs
The 2 year contract plans are in place so they can guarantee the return on the subsidy. You're still paying full price for the phone, but spread out over 2 years.
If I had the opportunity to purchase a handset outright and get a discounted rate plan w/ no contract there wouldn't be any hesitation.
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Re: Re: Cell Phone Subs
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I'm willing to pay
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Not necessary
Locked phones just mean a lot more waste, and a crippled resale market. The limited used phone market is the real reason that operators don't want phones unlocked.
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You cannot have both - I paid more for the handset to avoid a contract and a locked phone, but if I wanted to get in the door cheap I could have taken one of my local carriers free phone plus plan deals.
There is no way that the government (or anyone else) should be dictating to the cell companies and phone manufactures how they sell their products. Nobody is obliged to buy a phone from them.
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On the subject of taking away the subsidies, that's the wrong way to approach the problem. Instead of taking away the subsidies, we should make the carries unlock the phone if the person purchases it outright without the contract and discount associated with it. This lets people who wish for cheap phones and upgrade every year and a half like expected and desired by the industry to continue their habits, and those of us who'd rather have the option to float around as needed can get our unlocked phone just for paying up front.
It is also worth noting that while the primary band of GSM is different for T-Mobile and AT&T, both carriers provide quad band phones that will happily work with either network, and both carries primarily offer plans that do not charge roaming rates anywhere within the continental U.S.
Also, on the subject of unlocking phones, from what I've seen thus far it's still a legal battle that needs precedences set. Carriers want to claim that it's illegal to unlock your phone without their help, laws are conflicting and can be read either direction, and consumer rights advocates are rabidly waiting in the sidelines to get something rolling to set precedence towards it being legal. Someone just needs to push the whole mess into court and hope that the consumer rights advocates have the most rabid lawyers on the case.
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Locked type anyway
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And What About After the Contract?
In other words, you have (at least in theory), allowed the wireless service provider to recover their cost and make a fair profit. In addition, you have (at least in theory), *PAID FOR* the wireless device you now have.
Why then, should you be stuck with a "brick" should you decide to opt out and go with another carrier at the end of your contract?
While there may be issues between GSM providers, the CDMA carriers (Verizon, Sprint, Virgin, Metro, etc.) all use the same technology. In addition, let's not forget that Sprint was sucessfully sued and forced to provide the procedures to "release" the phones so that they could be programmed for other service providers.
Therefore, while it might be "acceptable" under most circumsances to lock the phone during contract, at the end of the term, the phone does (and should "freely") belong to the customer.
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Huh?
Buy an unlocked phone, buy a pay as you go sim, and you have freed yourself from whatever you didn't like about the locked phone.
Why all the debate?
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dirty rotten cellphone service
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