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Why US Wireless Isn't Wide Open 70

Geoffery B tips a story in Business Week about why the US cellular carriers' talk about opening up their networks rings hollow. "Even as the wireless industry chants a new gospel about opening mobile phone networks to outside devices and applications, some of the biggest US carriers are quietly blocking new services that would compete with their own. Would-be mobile-service providers, ranging from startups to major banks to eBay's PayPal, have encountered these roadblocks, erected by the likes of AT&T and Verizon Wireless. In some cases, cellular carriers have backed down, but only after inflicting costly delays on the new services."
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Why US Wireless Isn't Wide Open

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  • Summary (Score:5, Insightful)

    by Anonymous Coward on Thursday December 13, 2007 @01:12PM (#21686281)

    Why US Wireless Isn't Wide Open
    Answer: Greed.
    • Re:Summary (Score:5, Funny)

      by Adambomb ( 118938 ) on Thursday December 13, 2007 @01:13PM (#21686299) Journal
      Christ, one comment by an AC and already theres nothing left to be said really.
    • Re: (Score:3, Interesting)

      by christus_ae ( 985401 )
      I think that's an oversimplified sensational exaggeration to the notion that a business is out to make money, and would hence not readily open the market to more competition and subsequent profit loss.

      For the record, trying to make money != greed. Not relinquishing a dominated holding (what they're doing is legal) is not greedy, it's intelligent business. What do the companies have to gain by allowing more competition in an already competitive market?
      • Re:Summary (Score:5, Insightful)

        by Elemenope ( 905108 ) on Thursday December 13, 2007 @01:43PM (#21686729)

        Whoa! The equivocations are flying by at light speed!

        For the record, trying to make money != greed. Not relinquishing a dominated holding (what they're doing is legal) is not greedy, it's intelligent business.

        If one's sole concern is profit, to the exclusion of all other concerns (public health, advancement of humanity, humor value, whim, sex appeal, religious imperatives, etc.), then that's greed. It really doesn't matter *at all* if it has the sanction of law or not; law says next to nothing about ethics, and greed is primarily an ethical judgment.

        Intelligent business *is* greedy. Leveraging dominant market share *is* greedy. Trying to make money (as a corporate mandate, not in general; individual moneymaking is a more complicated issue) *is* greedy.

        Now, what really needs to be talked about is whether greed is at all times *good*, **bad* or something in between. That would be the moral discussion, divorced as it is nearly entirely from both law *and* ethics.

        • by umghhh ( 965931 )
          I think what needs to be discussed why slashdoters either do not read TFA or when they already spent incredible amount of energy on reading do not have any for understanding. Besides that I agree with you fully.

          They do not block anything. They just do not respond to proposals by other companies to canibalize their own networks. These other companies that want to do something with ussd so urgently have following choices:
          1. give up
          2. give more money and agree not to canibalize the incubents' networks (this do
          • by Moofie ( 22272 )
            Which is great and all, except when you talk about their "networks" you're really talking about frequency space that was given to them at no cost, which they're exploiting for oligarchy profits.

            Had they borne all of the costs for creating their "networks", they'd be entitled to pricing as they saw fit. Since they didn't, they aren't.
            • by umghhh ( 965931 )
              I am not sure how this is done in US but in Europe in majority if not all countries you pay for assigned frequencies. On top of it seems that there is more and more of them (surprisingly) as analogue and military users give them up. You also cannot forget about the billions spent on the infrastructure - had these be only the frequencies that they have there would be no problem with access as there would be no access at all.

              What I hate is when everybody is bitching about things that they hate as if we all w
        • by infra j ( 905848 )
          Bullshit. The only way businesses make sustainable income is by competitively *creating value*. Trying to protect a space that you deem "your domain" is not competitive, nor does it create more value in the market.
        • by asamad ( 658115 )
          Sorry $1 per sms not greed, even at $0.15 a sms that greed, on infrastructure that has been paid for ......
        • Here, here. I can't stand this idea that by saying "it's just business" you get to absolve yourself of any discussion of ethics. People are essentially asserting that, by saying 'it's just intelligent business' that you ought to be able to operate in an atmosphere of applied amorality.

          As much as many of his stuff annoys the hell out of me, Michael Moore had a line one time about "why doesn't Chrysler sell crack?"

          When a company does something unethical, they say they have not just a right but a responsibilit
      • That seems to be the heart of your 'argument'. Greed is not good, Gordon.
        • Comment removed based on user account deletion
          • then why do catholics think of greed as one of the seven deadly sins?

            yes i do see the irony of the worlds only city state claiming greed is bad.
          • by Zanix ( 684798 )
            To some degree, yes. But without competition, there is no incentive to truly innovate, merely to change slightly and resell. Look at Windows. What was the difference between Win95 and Win98? Win95 took less space and crashed less? Things like Linux and Firefox have forced Microsoft to take action to try and truly make their product better because if it continue to be a buggy blue screen of death memory and hard drive eating POS, people finally will stop buying it. They made WinXP well enough tha
    • Re: (Score:1, Insightful)

      by Anonymous Coward
      Better answer: because they can.

      Banning corporate lobbying will give us a nice jolting shakeup of our government.
    • Re:Summary (Score:5, Insightful)

      by CajunArson ( 465943 ) on Thursday December 13, 2007 @01:43PM (#21686711) Journal
      Remember kids this is Slashdot where greed is ALWAYS EVIL.*

      * Exceptions:
              1. Apple getting premium prices
              2. Any Slashdot fanboy downloading any movie/music/game for free since this it's only greedy when the creators want $$ for it, not when Slashbots want it for free
              3. The other companies mentioned in this article that are not really being banned, but may not be able to get "short" numbers. They are not greedy, since they want to make money, and get a scarce resource (short number codes). If these non-Verizon companies want to hog the short codes this is NOT greedy because they are Slashdot approved. Only the cellphone companies are greedy. Everything is purely black & white.
              4. Whenever a Slashdot approved company makes money: AMD, IBM (called an 'underdog' for unknown reasons), Google, Apple (again)
              5. Any company with a '90's style business plan that goes under due to ineptitude. They are seen as being martyrs for the religious cause of the week, and that they should have succeeded except for George Bush being evil and destroying them.
      • Generalizations are accurate and meaningful. I found your post very enlightening.

        Please remember that if you browse at +1 or more you'll only see the multitude of vocal minorities. Granted in most cases its the largest minority, but still a minority out of the whole.

        Course less than +1 is a study into Beckett's Endgame writ large, but it does reveal the broader mix of perspectives.
      • Oh, gimme a break.

        Sure, there's a lot of slashbots who might see profits as evil, but surely you don't honestly suggest that there's nothing wrong with anti-trust/restraint of trade behaviors?

        I'm sick and tired of this attitude that "we're in business to make money, so that's all that matters, and we have to make as much as possible" being used as excuse to somehow exempt people in business from any discussion of ethics or morality.

        If all that matters is maximizing investor return, then why don't AT & T
    • No, providers are greedy in other countries too.

      The real reason is that the FCC/government decided not to require some type of open access at a reasonable price they they require with the telephone company. A third party should be able to "rent" a data/voice line on their network for a nominal fee.....that is if our government wasn't cuddled up with the providers.
      • by bkr1_2k ( 237627 )
        A third party should be able to "rent" a data/voice line on their network for a nominal fee.....that is if our government wasn't cuddled up with the providers.

        You do understand that's what the short codes are right? They are a way for the third party to "rent" special services from the providers such that they can offer alternative, competitive, or complimentary services. As the article states, these companies are still able to use standard text messaging to accomplish the same purpose.

        While I think it is
    • Why isn't *YOUR* house open for me to use?
  • Hmm (Score:3, Insightful)

    by christus_ae ( 985401 ) on Thursday December 13, 2007 @01:17PM (#21686359)
    I don't think it's out of the norm for a business in a competitive market to create artificial barriers to entry to protect their profit margins. In a capitalist system, a business must take certain steps to "get ahead" of current and would be competition to survive. These are typical tactics.

    I feel like the summary is a tad sensationalist... I don't find a business not voluntarily allowing more competition to be suprising.
    • by Ajehals ( 947354 )
      I am fairly certain that if *artificial* barriers to entry are erected then the market isn't competitive, companies are limiting interested parties from entering the market artificially to prevent competition. The only barriers to entry in a competitive market should be natural or in some cases regulatory (product safety etc...). After all in a competitive market one would expect services to improve (to get that 'step ahead' you were talking about) and profit margins to remain low (lowest possible pricing
      • There is no doubt that markets without artificial barriers to entry are inherently good for the consumer (as always the more competition, the better for the consumer). While the barriers being erected in the wireless industry are discouraging more competition, there is existing fierce competition between carriers.

        To say that the incumbents in the wireless market are in some sort of trust or effective monopoly is incorrect. Over the course of the relatively short lived wireless market, consumers have seen
        • To say that the incumbents in the wireless market are in some sort of trust or effective monopoly is incorrect. Over the course of the relatively short lived wireless market, consumers have seen cost to service ratios drop steadily as the competition between Sprint, AT&T, T-Mobile, and Verizon remains constant.

          Are you so certain of that first statement? One doesn't necessarily imply the other. Collusion and competition can coexist. As long as everyone in the industry agrees to impose certain barriers to entry while still competing -- that's still collusion.

    • Of course, in a purely capitalist system, every business would be able to erect any kind of radio network they like. We'd at first end up with a bunch different protocols that are all conflicting with each other and fantastically expensive and clever devices that can use whatever is available to actually get the calls through.

      Then slowly those 12 standards would merge as the devices relied more heavily on a specific set of features over another. We'd end up with something fairly flexible, but more limited
    • The theoretical benefit of capitalism is that competing companies are falling over each other trying to out do eachother by providing better service etc, thus capitalism is good for the customer.

      The truth though is that in many companies are not customer focused, but competitor focused, expending more effort in body-slamming the competition than improving their goods/services. In these cases the customers are very definitely not advantaged.

      As with most ideologies, captialism is not good or bad of itself. Th

    • Re: (Score:3, Insightful)

      by ciscoguy01 ( 635963 )
      I don't think it's out of the norm for a business in a competitive market to create artificial barriers to entry to protect their profit margins. In a capitalist system, a business must take certain steps to "get ahead" of current and would be competition to survive. These are typical tactics.

      But in the US wireless market that's hardly what's going on. The carriers keep a stranglehold on the equipment supply by being essentially the only buyer of handsets from each manufacturer. Which explains why the
  • by Nom du Keyboard ( 633989 ) on Thursday December 13, 2007 @01:19PM (#21686399)

    In some cases, cellular carriers have backed down, but only after inflicting costly delays on the new services.

    And you're surprised at this news...why?

  • by Lemmy Caution ( 8378 ) on Thursday December 13, 2007 @01:26PM (#21686489) Homepage
    The article is about foot-dragging and rejections for some short-code services that compete with the wireless carriers.
  • by pavon ( 30274 ) on Thursday December 13, 2007 @01:28PM (#21686517)
    Even if they were completely open about what phones and services you could use on their network, it wouldn't amount to much thanks to subsidized phones. How many people will really pay full retail price for a phone when they can get one that is just as good, but locked down, for "free"? Yay, I can save $2 on custom ringtones if I pay $150 more for my phone.
    • by h4rr4r ( 612664 )
      If it lowers the monthly cost I would do it. If it gets me a phone that has not had its features removed that is another good reason.

    • by nolife ( 233813 )
      You do not get something for nothing, the cheap subsidized phones are paid for by higher monthly fees. Considering only that aspect of the mobile industry, the consumers would come out even from a money standpoint if the phones and monthly service we prised fairly. What the contracts and subsidized phones allow the carriers to do is tie you into their service for the contract length and make you pay way more for a replacement phone if you would ever need one. The perpetual cycle starts over every year or
    • Well, my big question about this whole "open network" thing is this:

      Will this force the carrier to just give me a pipe, or can I still be nicked-and-dimed? It seems like it would be really easy, even if the carrier didn't want it, to stuff a data stream into a voice connection or something of the sort to give me a real internet connection.

      And if carrier certified x-phone, couldn't someone just make a linux device that accepts the chip and pretends to be x-phone but lets me do what I want?

      I may be way off ba
      • Re: (Score:3, Informative)

        by Vegeta99 ( 219501 )
        Right now, AT&T is "Open" in the fact that you can bring a device to them that operates on the US 1900MHz and 850MHz GSM bands, and purchase a SIM card for service without a contract.

        Verizon says that you can bring a CDMA handset to their network, I'm not sure with contract or not.
    • Re: (Score:3, Interesting)

      by _xeno_ ( 155264 )

      If it would let me use my phone's built-in GPS with Google Maps, sure I'd pay $150 extra for the phone. If I were allowed to transfer applications between phones, sure it'd be worth it.

      The reason my phone doesn't allow Google Maps access to the GPS is because Sprint sells a similar service for $10/month. So if the phone lasts more than 15 months, it would have been worth it.

      Add in other locked down features (can't email photos from the phone, can't easily copy files off the phone, etc.) and it would be

  • In my case, I would like to know whether US cell phone numbers are portable. That is to say; can one have a number say 123-456-7890 in Detroit pegged to carrier ABC switch to another carrier and still retain the same number 123-456-7890?
    • Yes and has been for some time
    • Re: (Score:1, Informative)

      by ShawnCplus ( 1083617 )
      Yes, it's been offered for a few years now. Though not every carrier offers it.
      • Re: (Score:3, Informative)

        by techpawn ( 969834 )
        Under the Federal Communications Commission's (FCC's) "local number portability" (LNP) rules, so long as you remain in the same geographic area, you can switch telephone service providers and keep your existing phone number. If you are moving from one geographic area to another, however, you may not be able to take your number with you. These rules have applied for some time to wireless and most traditional, wireline telephone companies. In addition, the FCC recently extended the LNP rules to interconnected
      • by e4g4 ( 533831 ) on Thursday December 13, 2007 @01:45PM (#21686755)
        Umm - as of ~3 years ago, all cell phone carriers operating in the US are required [fcc.gov] by the FCC to allow numbers to be ported to and from other providers. The same is true of local (landline) phone numbers as of ~10 years ago. It is not yet true of VoIP. Mind you the cell carriers don't actually have to implement it until someone asks for a port - but when they do, they must comply.
  • carriers take about half of premium sms cost (imagine visa charging 50% on each transaction) and at the same time they are protecting themselves against competition by reducing amount of premium sms they process?? reminds me of a dinosaur munching on his left foot who doesn't feel the pain yet as it takes time to travel in his long and stupid body.
  • by Anonymous Coward
    I can to some extent understand the carriers blocking alternative phone plans, that is kind of logical competitive behavior. But what on earth is AT&T doign in banking? It would seem more logical to have an open system where all banks can talk to all phones -- that is a great way to drive traffic, and traffic is what a cellular carrier should thrive on.

    For someone from Europe, the idea that cell carriers do these kinds of shenanigans is just amazing. Here, you can buy a phone with no contract, pop in
    • AT&T is in banking because there is a metric fuckton of profits in banking transactions. Only suckers rely on intrest when you can charge per-transaction fees, monthly acess fees, data plan fees, fees to institutions... oh and lock customers in to a propritery network.
  • by Frank Battaglia ( 787673 ) on Thursday December 13, 2007 @04:26PM (#21688588)
    The article is about "short codes" for text messaging (e.g., "Text 105312 to vote for the next American Idol!"). The telcos are slow to approve new short codes. This has little, if anything, to do with open network access.

    Illustrative example: The wired phone network is an open-access network (i.e., you can call whomever you want using whatever phone you want and transmit whatever data you want), but that doesn't mean the phone company has to give me a 3-digit access number (ala 911, 411, etc) if I ask for one. This article is stupid.
  • Better Summary (Score:2, Interesting)

    by Requiem18th ( 742389 )

    Why US Wireless Isn't Wide Open


    Because the field is completely dominated by huge corporations with great influence in Washington, free markets are incapable of demolishing, and in fact work in favor of monopolies, people are too apathetic to learn, let alone do anything about it, too scared of offending the corpogoverment and worst of all, too resentful of each other to believe they can work together for their mutual benefit.

"The vast majority of successful major crimes against property are perpetrated by individuals abusing positions of trust." -- Lawrence Dalzell

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