Despite A Year To Prepare, Wireless Carriers Struggle To Adhere To Weak And Voluntary Cell Phone Unlocking Guidelines

from the you-had-one-job dept

One of the very first things new FCC boss Tom Wheeler did when he entered office was to get wireless carriers to agree to a list of voluntary cell phone unlocking guidelines. The six "demands" are largely common sense and uncontroversial, and include requiring that carriers offer unlocked devices to active overseas service members, make their postpaid and prepaid unlocking policies as clear as possible, respond to unlocking requests within two business days, and automatically notify customers when their contract period ends and their phone can be unlocked.

I'd heard that carrier lobbyists balked at this last request fearing it would "advertise" unlocking, but ultimately acquiesced out of fear of tougher, non-voluntary rules coming down the pike. Note this is entirely separate from the fight over keeping cell phone unlocking legal and the need for DMCA exemption process reform. The rules also don't require that carriers simply sell unlocked phones outright, since that would probably make a little too much sense. After agreeing to the rules, carriers had more than a year to adhere to all six requirements, and the final deadline arrived last Wednesday.

Sina Khanifar, who you might recall started the White House petition on cell phone unlocking, has done an interesting bit of analysis on how well carriers have adhered to the six rules. He offers up this handy chart showing that T-Mobile and Sprint in particular appear to be struggling:


Interestingly it's Verizon and AT&T, arguably the worst of the major carriers when it comes to attempts to stifle openness over the years, that come out ahead in adhering to all six guidelines (though your mileage may vary, and since the rules don't require much, this may not mean much). For Verizon, that's in part thanks to the Carterfone conditions placed on its 700 MHz spectrum, though that hasn't stopped the company from fighting openness in general tooth and nail in other ways. As I've noted previously the conditions have plenty of loopholes -- and anti-competitive behavior is allowed just as long as companies ambiguously insist that what they're doing (like blocking Google Wallet, or locking bootloaders) is for the "safety and security of the network."

Similarly interesting is the fact that T-Mobile, despite a recent reputation for being a fierce consumer advocate, sits right alongside Sprint when it comes to failing to adhere to the fairly simple requirements after a year's head start. Khanifar notes T-Mobile saddles prepaid and postpaid users with a number of strange restrictions, including the fact that users can't unlock more than 2 devices per line of service in a 12 month period. Between this, the company's opposition to Title II and its failure to understand the problems with zero rated apps, T-Mobile's showing it still needs to actually earn that ultra-consumer-friendly reputation.

Khanifar proceeds to note that despite carrier struggles this is at least a step in the right direction, even if we still need DCMA reform to ensure unlocking remains perfectly legal. That said, he quite justly highlights how cell locking no longer makes any coherent sense, for anybody:

"It's worth taking a step back and examining the absurdity of these locks. If you've paid for your AT&T phone, committed to a 2-year contract, and agreed to an "early termination fee," what purpose does a lock really serve? If you've paid cash to purchase a prepaid device, why should it come locked to just one carrier? There's plenty of evidence that locks serve little real commercial purpose. Verizon's business hasn't suffered since they stopped locking their phones. Countries like China and Israel have made locking devices outright illegal with no harm to their wireless industries and plenty of gain for consumers. But unfortunately it's unlikely that Congress or the FCC will take action to implement a similar policy here in the US."

Of course unlocked, open devices widens the competitive door, and with the kind of lobbying power AT&T, Verizon and the entertainment industry wield over Congress, getting real DMCA reform or mandated unlock-at-sale rules in play will likely be nothing short of a miracle.

Filed Under: fcc, mobile operators, phone unlocking
Companies: at&t, sprint, t-mobile, verizon

Verizon Makes It Very Clear Its 'Spectrum Crunch' Never Existed

from the chicken-little dept

If you recall, the wireless industry has spent much of the last decade proclaiming that a "spectrum crunch" was afoot, declaring that unless the government did exactly as requested, wireless growth and innovation would grind to a halt. AT&T was quick to claim that it needed to buy T-Mobile because of said spectrum crunch, though the company's own leaked documents highlighted that this simply wasn't true (this hubris being a big reason the deal was rejected). Verizon has also spent years crying spectrum poverty when convenient, despite repeated analysis showing its holdings lead the industry.

Yes, there is finite spectrum, but as with all network capacity constraints this has increasingly been mitigated by Wi-Fi offloading, new technologies and smart engineering (not to mention unlicensed options and technologies we haven't even conceived yet). If there is a "spectrum crunch," it's predominantly among smaller competitors that lack the resources to buy huge swaths of spectrum, or the political power to get regulators to tilt the entire playing field (and spectrum auction process) in their direction. Of course, both AT&T and Verizon have breathlessly and repeatedly denied that they warehouse extra spectrum to help keep would-be competitors at bay.

After years of warning of spectrum armageddon, Verizon's again making it clear that the entire spectrum crisis was contrived nonsense. After nabbing another $10.4 billion at the recent AWS-3 auction, Verizon CTO Tony Melone this week stated that despite years of claiming spectrum poverty, Verizon never really felt pressured to buy such a huge swath of spectrum:

"In a conference call with investors, Tony Melone, Verizon Communications' executive vice president of network, said that "entering the auction there was no markets where we felt compelled to acquire spectrum, irrespective of the price." Verizon did not feel pressure to aggressively bid for spectrum because it already had at least 40 MHz of AWS-1 spectrum in many U.S. markets, especially in the eastern United States, Melone said."

It's always kind of amusing when the network guys forget to adhere to narratives set by the policy folks (like the Verizon CFO's recent slip up in admitting Title II isn't a big deal). But Melone's comments are a far cry from claims made by Verizon's policy blog just a few years ago, when the company was trying to get regulatory approval for a huge co-marketing deal with the cable industry:

"Rather than waste time arguing about spectrum efficiency, let’s focus on the issue on which we all agree: America’s wireless consumers face a spectrum crunch that won’t be relieved by Verizon’s spectrum purchase. It’s up to the industry, as well as policymakers, to help ensure that more spectrum reaches the marketplace soon, so America’s wireless industry remains the global leader in innovation that it is today."

Said spectrum crisis seems to materialize out of thin air when Verizon needs something, then just as quickly disappears when the company candidly decides to talk about its holdings. Of course, Verizon gets away with this kind of stuff, in part, because the tech press (with the occasional exception) loves to regurgitate company claims unskeptically. And if you've been paying attention, you'll note that congestion has long been a useful bogeyman to scare regulators into bending rules to the benefit of the biggest, least competitive companies. Remember the Exaflood? How about usage caps? Does anybody notice a pattern?

With Verizon's bloated belly full from the recent AWS-3 spectrum purchases, and new technologies constantly evolving to more than meet mobile network demands, that should be the last we hear about Verizon's spectrum shortfall for a long while, right? Of course not. The big telco threat these days is that if the government imposes tough net neutrality protections, we'll see a dramatic decrease in innovation and network investment leading to (you guessed it) network performance and capacity issues (though we've illustrated how these claims too are bunk).

You'd think we'd reach a point, after so many years of false claims, where the press would no longer just take the claims of lumbering, bloated duopolists at face value. If there's a crisis, it remains a crisis of critical thinking.

Filed Under: antitrust, competition, spectrum, spectrum auctions, spectrum crunch, tony melone
Companies: verizon