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Sh*t sandwiches -- not just the iPhone

post #1 of 8
Thread Starter 
I'm spinning this off from another thread, because it has nothing to do with lawsuits, just general dissatisfaction with some aspects of the iPhone and the mobile phone market in general.

Quote:
Originally Posted by TenoBell View Post

Right, the argument is meant to center around how Apple has done them so wrong by locking the iPhone to AT&T independent of the fact that there are many many mobile phone choices other than AT&T or the iPhone.

The whole idea of carrier-locked phones -- utterly apart from whether it's Apple's or anyone else's locked phone -- sucks. Carrier-locked phones are in no way, shape or form a benefit to consumers, unless they are merely an option that comes with a discount -- and I mean an option for each and every model of phone.

It's very easy to toss off "if you don't like, it don't buy", but that slogan fails to address the environment is which that choice is made, the alternative choices available, and how effectively a consumers' choice against one phone can pressure desirable, reasonable improvements in the available choices. It only benefits the seller, not the consumer, to play the game of making you take what you don't what (carrier lock-in, limited choice pay-per-ringtone schemes, etc.) just to get what you do want (things like the great Safari browser, which you can get nowhere else but in an iPhone).

This is the "shit sandwich" scheme of selling things. It's easy to get away with this approach in the mobile phone market because nearly all of the choices are simply different kinds of shit sandwiches. Yes, I can simply not buy an iPhone if I don't like the shit that goes with it, but what else can I buy that doesn't come with its own variety and quantity of shit?

Please note, I'm not defining "Waaah!!! I can't get every feature I want for $5 in an unlocked phone!!! Waaah!!" as "shit" here. I'm talking about artificially imposed limitations -- exclusive and restrictive contract terms, deliberately crippled features, lack of features that you'd be quite happy to pay for if you could get those features without other shit that comes along for the ride.

What can be done about the "shit sandwich" situation? Maybe nothing apart from bitching about it. People want cellphones too badly to ever give them up, to ever massively boycott them as a way to express their displeasure with the downside of most cell phone purchases and service contracts. People will indeed eat some shit, up to a certain point. The carriers know it, and the carriers take advantage of it.

For the most part, I suppose that if businesses want to act this way, it's their right to do so. In a totally free market, we could hope for market forces to encourage someone else to come along and actually sell us a shit-free sandwich.

But there aren't very many carriers, and I don't consider this market to be totally free. Bandwidth is limited, and developing infrastructure to support a mobile phone system represents a very high barrier to entry for any potentially new player in the market. The carriers can play from a position of power and they don't have to be all that terribly responsive to consumers' needs and desires. In the US, where two-year service contracts are the norm, carriers know that they've effectively reduced the mobility of their customer base.

My solution, if I had my way? I'm not one to lightly suggest just any sort of rule or law regulating businesses and business practices, as if all one needs to do is determine a desirable outcome and dictate it by fiat. But I believe that there's valid pro-consumer bargaining power here that's being left unused: the terms we stipulate for the privilege of using public airwaves.

Both carriers and cell phone makers need access to this limited, public resource. When our governments sell off the rights to use pieces of the broadcast spectrum, I think they need to be doing much more than looking for the highest bidder,. They should also be looking out for consumer interests. They should be trying to counterbalance the bargaining power they're giving these companies (the carriers especially) to foist "shit sandwiches" off on consumers.

According to that principal, I'd require that all models of cell phones be available in unlocked versions. Want that FCC permit for your phone to use the public airwaves? Then you have to comply with this law.

I'd require that all carriers accept customers who want service on an unlocked phone, at the same service rates as locked phones. Locked phones and long-term contracts would be perfectly legal, and carriers could use discounted prices on locked phones as an enticement. The carriers couldn't, however, force manufactures to make only locked models of certain phones, or limit features available on unlocked phones.
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post #2 of 8
What I would question about this is 2 things.

First, with the exception of the iPhone can you name a single phone you can't purchase unlocked for an unsubsidized price?

Second, what carrier can't you establish service with, without signing a contract? Sure, I know a few like sprint will charge you an additional 5 bucks a month, and others like AT&T will try to bully you into one, but ultimately as far as I am aware they will all sell you contract free service.

So ultimately through legislation, you would achieve nothing that doesn't exist today based on the criteria below. As much as we like to moan and complain about the sad state of the American cellular networks and their stranglehold on us, we loudly and consistantly tellthem via our wallet that we prefer phone subsidies over freedom. What is worse is the strong sales and stronger interest in the iPhones tells them we are warming up to the ideas of paying oh-so-much more and having even less choice along with those long contracts. Thanks Apple!

It seems though that more than the customer to carrier relationship, what needs to be addressed is the phone to carrier relationship.

Let's just say that effective immediately long term contracts and phone subsidies no longer exist. You are free to go where you want when you want. The problem you mentioned about features and artificial limitations still exists. The phone makers still ultimately will design and add features to phones based on what the carrier wants and not the consumer, because ultimately the phone isn't going to sell if the carrier is unwilling to certify it on their network and allow consumers to connect them. This really isn't something you can legislate because either A) as a carrier I will be able to argue the new widget phone will cause undue risk to network integrity and have to made up documents to prove it or B) as a carrier I will simply wrap the phone in so much red tape it will never get out of coming soon status. Sure if we were actually in a state where contracts no longer exists the market would ensure we get newer technology faster and cheaper to a certain extent, but ultimately we won't ever control that.
post #3 of 8
Thread Starter 
Quote:
Originally Posted by Thelonius View Post

What I would question about this is 2 things.

First, with the exception of the iPhone can you name a single phone you can't purchase unlocked for an unsubsidized price?

I've purchased two unlocked cell phones. One I bought at Heathrow airport, the other I bought through some online store I'd never heard of before. These were GSM phones. As far as I know, unlocked CDMA phones don't exist.

I've never seen an unlocked phone sold retail in the US, certainly not in major chains like Best Buy, Circuit City, etc. Judging from the very high prices for getting one mail order, and the frequent lack of US warranties or US tech support service, I get the impression that in order to get an unlocked phone in the US, you typically have to go through an extra middle man who buys outside the US, who will ship to customers in the US or to a US-based importer.

At any rate, we can get unlock phones in the US, but we can only use them with two major carriers, AT&T and T-Mobile. They don't work with Verizon, Sprint, or Alltel, and a few others. The general public is largely unaware that such a thing exists. I can only guess that the reason for this is that the carriers have strong-armed the cell phone makers into foregoing direct retail sales in the US, and from doing any advertising to make US consumers aware that unlocked phones are even an option.

Quote:
Second, what carrier can't you establish service with, without signing a contract? Sure, I know a few like sprint will charge you an additional 5 bucks a month, and others like AT&T will try to bully you into one, but ultimately as far as I am aware they will all sell you contract free service.

When I signed up for service with AT&T the first time, with my unlocked Windows Mobile smartphone, they still pretty much insisted on a long-term contract (even though I wasn't getting the benefit of a subsidized phone price) if I wanted any sort of reasonable data service.

Quote:
So ultimately through legislation, you would achieve nothing that doesn't exist today based on the criteria below.

Perhaps I should have said more about limiting all of the ways carriers try to impose themselves on cell phone makers, like the way direct sales of unlocked phones to US consumers are greatly hampered.

Quote:
This really isn't something you can legislate because either A) as a carrier I will be able to argue the new widget phone will cause undue risk to network integrity and have to made up documents to prove it or B) as a carrier I will simply wrap the phone in so much red tape it will never get out of coming soon status.

Approving cell phones should be purely a function of the FCC, with carriers obligated to provide service for any valid, FCC-approved phone.
We were once so close to heaven
Peter came out and gave us medals
Declaring us the nicest of the damned -- They Might Be Giants          See the stars at skyviewcafe.com
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We were once so close to heaven
Peter came out and gave us medals
Declaring us the nicest of the damned -- They Might Be Giants          See the stars at skyviewcafe.com
Reply
post #4 of 8
Thread Starter 
I find myself feeling a bit tempted to get an unlocked version of one of these:

HTC TyTN II

I don't want to replace my iPhone, but I think it might be nice to have this HTC in addition to my iPhone, and swap my SIM according to which features I want to have more at a given time. Fortunately, Apple's obnoxious SIM lock doesn't prevent its SIM from working in a different phone.

Swapping SIMs between two phones is not a terribly practical solution, but then again, my gadget freak side is not noted for practicality. If I actually get some 3G data coverage in my area, the temptation to get the HTC will become a lot stronger.
We were once so close to heaven
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Declaring us the nicest of the damned -- They Might Be Giants          See the stars at skyviewcafe.com
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We were once so close to heaven
Peter came out and gave us medals
Declaring us the nicest of the damned -- They Might Be Giants          See the stars at skyviewcafe.com
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post #5 of 8
What this really boils down to is how people perceive the proper balance of "consumer rights" vs other considerations.

While I'm am generally a consumer advocate, I am also against governmental control of our lives. Either side of the equation can be abused and there are numerous examples of each throughout history.
post #6 of 8
Thread Starter 
Quote:
Originally Posted by dfiler View Post

What this really boils down to is how people perceive the proper balance of "consumer rights" vs other considerations.

When businesses need to use a valuable public commodity like limited broadcast spectrum I don't think putting a few consumer-friendly restrictions on those companies as part of the deal is going too far.

Corporations of all kinds should have at least a few restrictions forcing a bit of public interest behavior, simply because corporations benefit from the general public backing their debt if they take risks and fail. The fabled "bold risk-takers" behind corporations reap big rewards when they succeed, but if they fail, limited liability leaves those oh-so-bold entrepreneurs and corporate giants well protected from being liable for the debts which ensue from their mess, and the general public ends up footing the bill.

Any company that doesn't want face such restrictions can run as a privately-owned business, foregoing the benefits incorporation provides. Let's see how bold the "bold risk-takers" are then.
We were once so close to heaven
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Declaring us the nicest of the damned -- They Might Be Giants          See the stars at skyviewcafe.com
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We were once so close to heaven
Peter came out and gave us medals
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post #7 of 8
Quote:
Originally Posted by shetline View Post

When businesses need to use a valuable public commodity like limited broadcast spectrum I don't think putting a few consumer-friendly restrictions on those companies as part of the deal is going too far.

I think that is where some might disagree.

Exclusivity is an incentive to invest in massive infrastructure upgrades that otherwise might not happen. It is also an incentive for corporations to enter the market since their return on investment is more predictable. This is key in industries with high costs of entry.

Yet I'm not sure what the optimal balance is and would enjoy reading your thoughts. So far, I don't think you've commented on the tradeoff so it is unclear if you've considered it at all.
post #8 of 8
Thread Starter 
Quote:
Originally Posted by dfiler View Post

I think that is where some might disagree.

Exclusivity is an incentive to invest in massive infrastructure upgrades that otherwise might not happen. It is also an incentive for corporations to enter the market since their return on investment is more predictable. This is key in industries with high costs of entry.

Yet I'm not sure what the optimal balance is and would enjoy reading your thoughts. So far, I don't think you've commented on the tradeoff so it is unclear if you've considered it at all.

The trade-off would only be bad if taking away the right to do some of the obnoxious things cellular carriers currently get away with would so greatly damaged the profit potential of running a cellular phone network.

Do you really think that if carriers could no longer muscle cell phone makers into producing crippled phones, and other BS like that, that cellular investors would give up in disgust, abandon their microwave towers to rust, and go into making sneakers or restaurant chains instead, so dejected by the oh-so-limited profit potential of the cellular business under such apparently onerous regulation?
We were once so close to heaven
Peter came out and gave us medals
Declaring us the nicest of the damned -- They Might Be Giants          See the stars at skyviewcafe.com
Reply
We were once so close to heaven
Peter came out and gave us medals
Declaring us the nicest of the damned -- They Might Be Giants          See the stars at skyviewcafe.com
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