T-Mobile Begs Small Wireless Carriers To Support Its Awful Merger. The Problem: They Hate It Too

from the merge-ALL-the-things dept

We've repeatedly explained how T-Mobile and Sprint's latest attempt to merge will be terrible for both jobs and competition. Despite what T-Mobile and Sprint executives have claimed, history suggests the reduction of total wireless carriers from four to three will likely result in less incentive than ever to seriously compete on price. Similarly, while T-Mobile and Sprint have told regulators that the deal will somehow create an explosion in new jobs, Wall Street analysts have predicted that the deal could kill off anywhere from 10,000 to 30,000 jobs as the new company inevitably eliminates redundant positions.

While some diehard T-Mobile and Sprint fans have bought into these claims, most objective observers with a firm grasp on history realize that the promised "synergies" of telecom mergers like this one almost never materialize. And the obvious impact on competition and jobs is a major reason this merger and others like it (including AT&T's attempt to acquire T-Mobile) have been scuttled by regulators. There's simply too many examples of this kind of consolidation resulting in massive monopolies with little incentive to give a damn (hi Comcast and AT&T, didn't see you standing there).

T-Mobile's looming merger is so unpopular, the company was forced to quietly hire Trump ally Corey Lewandowski in an effort to seal the deal (the whole mocking a kid with Down Syndrome thing be damned). Reuters notes that the company has also started reaching out to smaller wireless carriers, urging them to not only express support to the FCC, but submit favorable editorials to major papers supporting the merger. The problem: they don't much like the deal either:

"One wireless operator that works with T-Mobile said it received an email with suggestions on how to support the deal. The company declined to be named because it has concerns about how it would be affected in the merger.

The email from T-Mobile, seen by Reuters, suggested the company write an op-ed supportive of the deal or submit a letter of support to regulators. The email also offered talking points the company could use during media interviews, such as how the merger between the No. 3 and 4 U.S. carriers would help the build-out of a 5G network."

Countless news outlets (The Hill quickly comes to mind) simply adore publishing ostensibly "objective" editorials from parties without bothering to disclose obvious financial conflicts of interest. It's a pretty standard practice as companies try to sell regulators and the public on megamergers most people realize operate in stark contrast to the public interest. Worry not though, Reuters quotes one expert as saying there's perhaps "only a little" coercion going on as T-Mobile attempts to pressure smaller companies into supporting the deal if they want to enjoy future, productive relationships with the merged company:

"While it is not unheard of for companies pursuing mergers to ask vendors or customers for support, there could be a small amount of coercion going on, given that some of the smaller wireless companies have direct relationships with T-Mobile, said James Cox, a Duke Law School professor who specializes in corporate and securities law."

The problem for T-Mobile is that many of the same companies they're wooing now have repeatedly come out in opposition to the deal. For example, the National Wireless Independent Dealer Association has said the deal will be "devastating" for prepaid wireless consumers and the nation's 30,000 smaller wireless operators. Peter Adderton, co-founder of Sprint's Boost prepaid service, has also been making the rounds pointing out how the deal is decidedly terrible:

"Given that Sprint and T-Mobile are a dominant force in prepaid, they will have a significant incentive to restrict network access to competing MVNOs,” he says. “If the Boost Mobile and MetroPCS brands are included in this merger, it would be bad for the overall competitive landscape, bad for the prepaid market, bad for our country’s MVNOs and bad for the economy."

It's indisputable that T-Mobile competition has done some excellent things for the wireless industry in the form of added competition. But even with four major players that competition can often be theatrical in nature. And T-Mobile's consumer-friendly "uncarrier" branding schtick (and the hip and admittedly-amusing caricature that is CEO John Legere) is starting to look a little shallow in the wake of the company's opposition to net neutrality, bizarre attacks on the EFF, hiring of Corey Lewandowski, and now peddling of an indisputably-terrible new megaunion.

Filed Under: competition, merger, mobile, mobile carriers, mobile operators, wireless
Companies: sprint, t-mobile

Mobile Now Makes Up Majority Of Gaming Sales And Nintendo's New President Wants To Get The Company On Board

from the choo-choo dept

With the advent of the smartphone, these mini-computers that most of us carry around in our pockets, it was only a matter of time before the mobile platform became a dominant player in the gaming business. That said, it will likely still surprise some folks to learn that this will be the year that mobile takes over gaming revenue, with a forecasted majority of all revenue being spent on mobile games.

Newzoo's 2018 Global Games Market Forecast now predicts that mobile games will make up a slim majority (51 percent) of all worldwide gaming revenue this year (including smartphones and tablets, but not dedicated gaming handhelds). That's up from 34 percent in 2015 and just 18 percent in 2012. Console and PC games will split the remainder of the pie relatively evenly in 2018, at 25 percent and 24 percent of worldwide spending, respectively.

The growth of the mobile market doesn't show any signs of stopping, either: by 2021, Newzoo estimates that 59 percent of all gaming spending will go to mobile platforms, with console and PC games dividing up the scraps.

It's been quite interesting to watch gamemakers themselves react to this brand new market over the past five or so years. Indie developers sprung up everywhere, taking advantage of the new platform for revenue, while established game studios and companies embraced mobile in a more mixed fashion. Some studios, such as Bethesda and Square, began dipping their toes in the water fairly early, only to ramp up releases of past and new titles fully optimized for a mobile experience. What should have been immediately apparent is how perfect mobile devices are for any gamemaker's back-catalog, where games that require less graphical power can be offered to satisfy a nostalgia movement that is essentially a market in and of itself.

Nintendo, on the other hand, balked at the mobile marketplace as recently as a few years ago. Nintendo has long favored a walled-garden approach to its games, exerting strict control over both game titles and the hardware that runs them. It was only in 2015, in fact, when Nintendo, then headed by company president Satoru Iwata, followed by Tatsumi Kimishima after Iwata's death, struck a partnership with a mobile developer to begin releasing Nintendo games for mobile. By any measure, the made Nintendo late to the party, with only a tepid public embrace of mobile gaming as a revenue generator.

Well, Nintendo has a new president now, and Shuntaro Furukawa is looking to get the company fully invested in mobile gaming.

Furukawa is taking over from Tatsumi Kimishima, who took the helm temporarily after the tragic and sudden death of the beloved Satoru Iwata in 2015. He’s only 46, and clearly as a member of the younger generation has a different outlook on mobile, which the company completely avoided until very recently.

“The idea that something will emerge that transforms into something big, in the same manner as game consoles, is the defining motive of the Nintendo business,” he told the Nikkei. “From what I can see, smartphone games are the ones I want to expand the most.”

He said he envisions the smartphone side of the game company to become a 100 billion yen business — short of a billion at the present exchange rate, but why not round up? The company did a trillion yen in sales last year, so it’s not like we’re going to run out of zeroes.

While we could spend time kicking at Nintendo for getting into this so late, the more interesting take on this is that it's a signal that mobile game revenue might actually be undervalued by forecasts. After all, if the market forces are so great so as to drag a company like Nintendo along for the ride, it seems likely that gaming on mobile devices is going to be the gaming market of the present, never mind the future.

Filed Under: gaming, mobile, mobile gaming
Companies: nintendo

T-Mobile CEO Hallucinates Competitors In Bid To Sell Competition-Killing Sprint Merger

from the learning-from-history dept

Time and time and time again, U.S. telecom companies have promised us that better customer service, lower prices, and more competition is only possible if the latest industry mega merger is approved. But time and time again those promises not only don't materialize, but the deals wind up making an already broken market worse. As a result, the telecom sector sees historically awful customer service, higher prices, and all manner of additional problems ranging from broadband coverage gaps to net neutrality and privacy violations (both symptoms of limited competition).

Everybody's favorite villain, Comcast, is a direct result of mindless M&A mania where upgrades, customer service, and genuine innovation took a repeated back seat to growth for growth's sake. So is AT&T, who we've allowed to slowly but surely re-assemble itself in the wake of Ma Bell's 1982 breakup. And despite history being very fucking clear on the negative impact of telecom consolidation, here we are again bearing witness to the same, age old idiotic "synergy" claims as T-Mobile tries to sell the press and public on its planned $26 billion acquisition of Sprint.

As we noted previously this deal simply isn't necessary. Those pushing this merger like to pretend that Sprint was on the brink of collapse and simply couldn't survive without this merger. And while Sprint does have a heavy debt load and has been arguably incompetent on the branding and PR front, the company just announced what it's calling the "best financial results in company history."

There were numerous partnership and funding options that wouldn't have involved killing one of just four major competitors, and eliminating jobs for anywhere between 10,000 and 30,000 human beings. Eliminating one-fourth of the industry's major competitors simply reduces the incentive to genuinely compete on price. It's simply not debatable ( industry-funded think tanks are already busy trying to muddy the logic waters, though you'll note that even here the farmed enthusiasm is a bit more tepid than normal).

Trying to sell the deal, T-Mobile CEO John Legere spent much of this week trying to insist that reducing competitors somehow increases competition. To do so, the company tried to claim in an announcement that the public shouldn't worry, because somehow the combined Sprint T-Mobile would still have "7 to 8" big competitors to keep them in line:

"This isn’t a case of going from 4 to 3 wireless companies – there are now at least 7 or 8 big competitors in this converging market. And in 5G, we’ll go from 0 to 1. Only the New T-Mobile will have the capacity to deliver real, nationwide 5G,” added Legere. “We’re confident that, once regulators see the compelling benefits, they’ll agree this is the right move at the right time for consumers and the country."

That is, for lack of a more technical term, bullshit. Both companies are on record stating they don't need a merger to deploy 5G. And while there certainly are a number of scattered regional players and wireless MVNOs that offer tepid competition in several areas, they're far too small to apply any real downward pricing pressure on giants like AT&T, Verizon and SprinT-Mobile. AT&T and Verizon enjoy a monopoly over the business data service market that feeds tower backhaul, and AT&T, Verizon and T-Mobile collectively dominate the nation's limited spectrum holdings, the spectrum auction process, and all but own many state and federal regulators and lawmakers.

And while Comcast and Charter are both considering getting into the wireless sector, those WiFi-centric efforts lean heavily on Verizon Wireless' network, and none of the companies involved in those relationships want to encourage a real price war. It's also worth remembering that Legere spent most of last year mocking those efforts as "irrelevant" and destined for failure:

"Comcast’s Xfinity Mobile is “very irrelevant, and I assume that [Charter’s soon-to-launch mobile service] will be irrelevant squared,” Legere said. “The furthest thing from my mind is any concern about the impact of cable."

Now, with a mega merger to sell, Legere is nimbly pivoting on a dime to claim these "irrelevant" competitors will somehow keep the combined T-Mobile and Sprint on its best behavior. That's not how any of this works. As sectors consolidate and competition wanes the remaining companies always do their best to avoid genuine price competition, which is why the United States (and Canada) see some of the highest prices for mobile data in the developed world (OECD data). That we have to keep having this conversation is puerile and insulting.

Curiously, there's some rumblings out of the DOJ that Trump antitrust officials don't see as many problems with this merger as they do AT&T's $86 billion merger with Time Warner, which they're suing to block in court (and losing, by most accounts):

DOJ officials who believe that eliminating competitors somehow creates competition should probably go back and take a closer look at the DOJ's arguments when it blocked AT&T from acquiring T-Mobile back in 2011. The central tenet of their argument was that a reduction of genuine, large competitors by a fourth would dramatically harm consumers, and that logic remains historically justified. Blocking that deal encouraged T-Mobile to compete more intensely. And while price competition in wireless still tends to be somewhat theatrical in nature, T-Mobile went on to dramatically impact the industry for the better, helping drive the elimination of things like long-term contracts and annoying early termination fees, and encouraging a return to unlimited data.

As Canadians can attest, there's simply no good reason for letting an already marginally-competitive sector consolidate any further. Combining Sprint and T-Mobile won't create a stronger, more viable competitor for AT&T and Verizon, it will create an environment where the remaining carriers have less incentive to compete on price than ever before. Despite decades of evidence on this front, when it comes to mindless M&As we seem intent on ignoring the lessons of history.

Filed Under: broadband, competition, john legere, merger, mobile
Companies: sprint, t-mobile

Wireless Industry Lobbies To Ban States From Protecting Your Privacy, Net Neutrality

from the zero-accountability dept

In the wake of the Trump administration's decision to gut modest FCC consumer privacy protections and net neutrality rules, telecom lobbyists are working overtime trying to stop states from filling the void. In the wake of the FCC's wholesale dismantling of consumer protections, states like California have tried to pass their own laws protecting your broadband privacy rights online, only to find the efforts scuttled by AT&T, Verizon and Comcast lobbyists, who've been more than happy to spread all manner of disinformation as to what the rules did or didn't do.

Worried that states might actually stand up for consumers in the wake of the looming attack on net neutrality, both Verizon and Comcast have been lobbying the FCC to ban states from protecting your privacy and net neutrality. The two companies were also joined this week by the wireless industry's biggest lobbying and policy organization, the CTIA. In an ex parte filing (pdf) with the FCC, wireless carriers whine about how unfair it is that states attempted to protect user privacy after the federal government made it clear it had no such interest:

"Earlier this year, legislators in various states attempted to countermand Congressional action on broadband privacy regulations. When states and localities are provided a wide berth to test the boundaries of what is or is not consistent with Congressional objectives, the Commission and the courts are forced to evaluate regulations case-by-case, with broadband providers subject to a patchwork of mandates at issue during the review."

Like Comcast and Verizon, the wireless industry would have you forget that states wouldn't be running to create discordant privacy protections if these same lobbyists hadn't just successfully killed modest federal rules. This is a problem caused entirely by lobbyists for some of the least competitive companies in America. Said lobbyists would also have you ignore the fact that when California presented a fairly modest EFF approved replacement that could be used as a template for other states -- they made up a whole bunch of bullshit to scuttle the effort.

Most importantly these folks would have you ignore that they're perfectly fine with states writing shitty, protectionist regulations designed solely to protect uncompetitive duopolists, but state legislation that actually attempts to protect consumers is just a bridge too far. When critics suggest that maybe giant ISPs shouldn't get to write awful state laws, said ISPs will often lament an "attack on states rights." But here you'll notice the hypocrisy in having no problem dictating what local states can and can't do.

Further in, the wireless industry makes it clear it's worried that states will also try to protect net neutrality after lobbyists and the FCC vote to gut net neutrality rules on December 15:

"The Commission therefore should preempt any state or local broadband-specific regulation, irrespective of whether the state or locality claims that its regulation promotes or supplements federal goals. Thus, for example, state “network neutrality” regulations addressing the treatment of traffic on the network would be preempted, as would state broadband-specific privacy requirements."

The end goal is virtually no oversight for an industry that has proven repeatedly that it's incapable of regulating itself within the boundaries of good taste. From AT&T charging broadband users hundreds of dollars annually just to opt out of snoopvertising, to Verizon covertly modifying user packets to track users around the internet, these companies have repeatedly shown that there's no end to the privacy-eroding concepts they'd love to implement. Without any meaningful guard rails on the state or federal level, and only modest market pressure to behave due to limited competition, you can expect this kind of behavior to get immeasurably worse.

Filed Under: ajit pai, fcc, mobile, net neutrality, privacy
Companies: ctia

DOJ Staffers: The T-Mobile Sprint Merger Will Reduce Competition And Should Be Blocked

from the merge-ALL-the-things dept

We've already noted how, despite some empty promises by Sprint and Japanese-owner Softbank, the company's (second) attempted merger with T-Mobile will be a notable job killer. How bad will the damage be? At least one analyst predicts the total number of jobs lost could be more than the total number of people Sprint currently employs (around 28,000). Other analysts estimate the deal could kill something closer to 20,000 jobs, and even the most optimistic tallies put the job damage at somewhere closer to 10,000 lost positions -- most of them either in retail (as duplicate stores are closed) or among redundant management positions.

The reduction in major wireless competitors from four to three will also have an obvious, detrimental impact on competition in the space, reducing price competition in the sector and potentially putting an end to the recent, welcome return of unlimited data plans. Just ask career staffers at the Justice Department, who this week leaked word that many of them would be advising agency bosses to block the deal unless their goal is less competition in the space:

"When Sprint and T-Mobile bring their expected merger plans to the U.S. Department of Justice for antitrust review, the career staff who do the bulk of the probe into whether the deal will hurt customers will likely recommend that it be stopped, three people familiar with their thinking told Reuters...The Justice Department's main concern is how the deal would affect competition in the U.S. mobile sector. Antitrust staff will want to let T-Mobile continue as it has done, aggressively wooing customers away from market leaders Verizon Communications and AT&T, the people said.

Of course whether DOJ and FCC leaders listen to this advice is another question entirely. Trump's "populist" rhetoric on the campaign trail suggested a tough antitrust President who'd block mega-mergers that harm the public interest and market health, but his decision to approve AT&T's mammoth Time Warner merger suggests those promises were relatively hollow. And as you may have noted Trump's FCC boss Ajit Pai is a rubber stamp for giant telecom operators; a commissioner that has yet to stand up to industry on any major subject of note during his five-year tenure.

As such, this is being seen as the first real chance for the administration to put its money where its mouth is, and the same Reuters report above notes that analysts are decidedly split on whether that will actually happen:

"An informal poll of seven antitrust experts contacted by Reuters found them split between predicting that the deal would be stopped and saying they did not know if it would be allowed. A tiny fraction of deals are blocked. As influential as the career staff is, the final decision will lie with Trump's antitrust enforcer at the Justice Department, Makan Delrahim, and the Federal Communications Commission."

There's an ongoing mantra in the telecom space that blind deregulation is some kind of panacea, and that by stripping away all government oversight (including antitrust enforcement) of the broken and uncompetitive sector, connectivity and competition will magically sprout from the sidewalks. But history and real-world data consistently undermines that theory. Regulators' decision to block AT&T's attempted acquisition of T-Mobile -- and Sprint's first attempted merger with T-Mobile -- caused in a notable spike in competition thanks to a resurgent T-Mobile, resulting in unlimited data plans, better international roaming rates, the end of punitive long-term contracts, and more.

Again, Sprint has any number of potential suitors or partners that could help the company better compete (Altice, Comcast, Charter, Dish) without reducing overall competition in the sector. Crushing T-Mobile's motivation to disrupt the market by eliminating a major competitor is a notably bad idea, no matter what the industry-funded sales pitches over the next few weeks will try to suggest.

Filed Under: antitrust, doj, fcc, mobile
Companies: sprint, t-mobile

The Great Firewall Of China Grows Stronger As China Forces App Stores To Remove VPNs

from the total-information-control dept

Like clockwork, governments eager to censor the internet inevitably shift their gaze toward tools like VPNs used to get around restrictions. We've documented rising efforts to ban the tools use in countries like Russia, where VPN providers are being forced out of business for refusing to aid internet censorship. Whether it's to protect VoIP revenue for state-run telecom monopolies, or to prevent users from tap-dancing around state-mandated filters or other restrictions, VPNs have become the bogeyman du jour for oppressive governments looking to crack down on pesky free speech and open communication.

China's great firewall is a sterling example of draconian censorship, and since 2012 or so China has been trying to curtail both encryption and VPN use. Earlier this year China's Ministry of Industry and Information Technology declared that all VPN providers now needed prior government approval to operate, a move generally seen as the opening salvo of an outright ban. These new restrictions will last until July 2021, impose fines up to $2000 on companies offering unsanctioned VPNs (read: all of them), and feature government warnings sent to users consistently caught using the tools.

But in some areas, the pretense has washed away and VPN usage has been simply banned entirely. And as of July, VPN services began disappearing from both the Android and iOS app stores, with popular VPN providers like Green informing their customers the government has forced them to shut down completely:

"Dear respected Green customers,

We have received notice from the higher authorities. We regret to inform you that Green will cease our service on July 1st, 2017. We apologize for any inconvenience caused.

We will start processing our users’ refund request after service stopped (the amount will be calculated based on the remaining days in your plan). If you need a refund, please make sure to submit your refund request by August 31, 2017. We won’t be able to process any refund request submitted after that date. Since the workload of processing the requests, information verification and money transfer would be huge, we won’t be able to set an exact date for the refund. We plan to process the refund soon after August 31, please wait patiently.

Originally, statements made by the Ministry of Industry and Information Technology seemed to suggest the country's VPN ban wouldn't be fully implemented until March 2018. But these recent reports indicate that the Chinese government has grown tired of the pretense and has expedited its VPN crackdown dramatically. Since around 1-3% of China's 731 million internet users use tools like VPNs to tap dance around internet filters, even with this crackdown this will be a long, difficult, expensive game of Whack-a-Mole for the Chinese government all the same.

While VPNs are not a panacea for our endlessly eroded privacy rights, they remain an incredibly useful tool for those living under repressive regimes. Most legislative VPN bans are of the "death by a thousand cuts" variety, where lawmakers go out of their way to pretend they're not trying to kill VPNs, even if the end goal always remains the same: the elimination of any tool that might let citizens peek through the curtain of draconian efforts at information control.

Filed Under: app stores, china, encryption, great firewall, mobile, privacy, security, surveillance, vpns

Comcast, Charter May Soon Get Even Larger With Joint Acquisition Of Sprint

from the merge-ALL-the-things!!! dept

With the telecom sector seeing the Trump administration as somewhat of a blank check, the industry is busy considering all manner of mergers and acquisitions that would have been blocked under any number of previous administrations for being competition-killers. Verizon has made an offer to buy Charter (Spectrum), Sprint has been trying to merge with T-Mobile, AT&T's pushing for approval of its acquisition of Time Warner, Altice USA is gobbling up smaller providers hand over foot, and the industry is consolidating at a faster rate than ever.

While obviously not all M&As are bad by default, ignored in this rush is that several recent high-profile telecom deals have been utter shitshows for the American consumer.

While the Obama administration did block both AT&T and Sprint's attempted acquisitions of T-Mobile (which wound up being a very good thing for competition and consumers), its approval of Frontier's acquisition of Verizon's unwanted DSL customers in Florida, California and Texas resulted in endless outages and problems courtesy of a bungled integration. The Obama administration also approved Charter's $79 billion acquisition of Time Warner Cable and Bright House, resulting in not only much higher prices for consumers, but (somehow) even worse customer service for already one of the least-liked companies in America.

Undaunted by any potential history lessons, now Trump-era merger mania rolls on with the news that Charter and Comcast are considering either a joint acquisition of Sprint, or a minority ownership stake in exchange for a more lucrative network sharing deal for both companies' wireless services:

U.S. wireless carrier Sprint Corp is in talks with Charter Communications Inc and Comcast Corp about a partnership to boost the two U.S. cable companies' wireless offerings, according to sources familiar with the matter. Sprint, controlled by Japan's SoftBank Group Corp, has entered into a two-month period of exclusive negotiations with Charter and Comcast that has put its merger talks with U.S. wireless peer T-Mobile US Inc on hold till the end of July, the sources said on Monday.

Said deal could involve an outright acquisition of Sprint by the two cable giants, though one source suggests that's unlikely at first. More likely is a joint minority investment by both companies in exchange for a discount network sharing arrangement to help fuel both cable companies' attempts to get into the wireless sector. Comcast has already launched a WiFi-centric wireless voice service that uses the Verizon Wireless network for backup, and Charter is planning a similar service for 2018. That would, depending on how it went, likely evolve into a full acquisition of Sprint down the road.

Both companies had already struck a deal to partner on handset contracts, including a promise not to acquire a wireless carrier without first informing the other company. That deal was criticized on some fronts as a way for the two cable companies to avoid having to directly compete as they pushed their respective services to market.

How all of this shakes out (and whether it's good for anybody not named Sprint, Comcast or Charter) remains unclear. The deal could be an improvement over a Sprint acquisition of T-Mobile as it would not only keep the four major wireless competitors intact, but would bolster Sprint's historically rocky balance sheet ensuring it remains a somewhat viable competitor. That said, Charter and Comcast are no strangers to anti-competitive behavior, and adding another entire service segment to this well-documented dysfunction could prove disastrous for what's already some of the worst customer service in any industry in America.

Filed Under: acquisition, antitrust, broadband, competition, fcc, mergers, mobile
Companies: charter, comcast, sprint

Cuba's Telecom Monopoly Banning Text Messages Containing Words Like 'Democracy'

from the that'll-work dept

The door to modernizing Cuba's communications networks opened slightly wider recently after the FCC removed the country from the agency's banned nation list. That allows fixed and wireless companies alike to begin doing business in Cuba as part of an overall attempt to ease tensions between the States and the island nation. And while Cuba has been justly concerned about opening the door to NSA bosom buddies like AT&T and Verizon, it's still apparently not quite ready to give up some of its own, decidedly ham-fisted attempts to crack down on free speech over telecom networks.

A recent investigative report by blogger Yoani Sanchez and journalist Reinaldo Escobar found that the nation has been banning certain words sent via text message with the help of state-owned telecom monopoly ETECSA. The report, confirmed in an additional investigation by Reuters, found that roughly 30 different keywords are being banned by Cuba's government, including "democracy," "human rights," and the name of several activists and human rights groups. Words containing such keywords simply aren't delivered, with no indication given to the sender of the delivery failure.

Initially, the researchers thought this was just incompetence on the part of ETECSA:

"Eliecer Avila, head of opposition youth group Somos Mas, which participated in the investigation, said 30 key words that triggered the blocking had been identified but there could be more.

"We always thought texts were vanishing because the provider is so incompetent, then we decided to check using words that bothered the government," he said. "We discovered not just us but the entire country is being censored," he said. "It just shows how insecure and paranoid the government is."

You can understand some degree of paranoia when you've got the United States and Russia battling over who gets to bone graft surveillance technology into your fledgling communications networks, but the clumsy censorship also isn't too surprising for a nation that still bans advertising across the island.

That said, the real problem for most Cubans remains that broadband and wireless communications is a luxury commodity well out of reach of most residents. Only between 5 and 25% of Cubans even have access to the internet, and while many can access Wi-Fi via hotspots opened just last year, the cost of connection is roughly $2 an hour, or around a tenth of the average monthly Cuban salary. As such, Cubans are "fortunate" in that they can't yet even afford to be comprehensively spied on.

Filed Under: censorship, cuba, democracy, internet, mobile, text messages