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Antitrust Pressure Mounts For Wireless Providers 300

Posted by Soulskill
from the can-you-hear-us-now dept.
Over the past few weeks, the cellphone industry has been criticized on a variety of subjects, from distracted driving to handset exclusivity deals to everything else that's shady within the industry. Verizon's CEO has now responded, addressing what he claims are "myths" about standard practices. Reader DJRumpy points out that the chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights has been calling for an investigation into whether competition is being stifled through many of these practices, "including possible text messaging price fixing and questionable roaming arrangements." Apparently the new antitrust chief is hitting resistance from within the government over the aggressive inquiries into this and other major industries. However, a small victory was achieved the other day when the National Telecommunications and Information Administration "told incumbent carriers that they'll have to prove their cases just like everyone else if they want to challenge broadband grant proposals from smaller players." There is also legislation in the works that would require states to impose a ban on text messaging while driving or lose a significant portion of their federal highway funding.
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Antitrust Pressure Mounts For Wireless Providers

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  • That'll teach you to charge me $40 for roaming last month when I never left the city, motherfuckers!
    • by Shakrai (717556)

      That'll teach you to charge me $40 for roaming last month when I never left the city, motherfuckers!

      Unless you are on an ancient plan or left the country, Verizon doesn't charge roaming fees for using partner networks.....

      • by AndrewNeo (979708) on Wednesday July 29, 2009 @10:11AM (#28865863) Homepage

        There are cities on the US/Canadian border that you can pick up Canadian towers, and they will indeed charge you for roaming.

        • Re: (Score:2, Informative)

          by Shakrai (717556)

          There are cities on the US/Canadian border that you can pick up Canadian towers, and they will indeed charge you for roaming.

          And if you live in one of those cities it would seem to me to be your responsibility to pay attention to the roaming indicator on your phone. If you don't want to do that then you can lock your phone in "home only" mode (CDMA) or manually specify the carrier's network (GSM) to keep it from roaming.

          • Re: (Score:2, Interesting)

            Yeah, I know this well. I live 20km away from downtown Victoria, BC's CAPITAL city.. can practically SEE it. Yet, my old phone (Telus) would roam constantly. I had roaming turned off for 4 years, but eventually got sick of paying $70/month for service I could only use while I was at work, or in town.. about 9 hours/day during the week. Rediculous. When they called me to try and upgrade my plan, I explained this to them, and the fact that I know several people who have a similar situation, that their ro

          • Step 1) Use "vendor lock-in" to prevent the use of competitor's phones
            Step 2) Don't allow any "allowed" phone to have features such as requiring confirmation to switch to high-priced "roaming" towers
            Step 3) Claim that it's the responsibility of consumers to do something which should be a basic feature of any phone
            Step 4) Profit!

            • by Shakrai (717556)

              Step 2) Don't allow any "allowed" phone to have features such as requiring confirmation to switch to high-priced "roaming" towers

              Except that every single phone I've ever seen offered by Verizon does offer the ability to disable roaming. So try again.....

        • by weave (48069) *

          There are cities on the US/Canadian border that you can pick up Canadian towers, and they will indeed charge you for roaming.

          That can work the other way as well. There's been times I've been just inside Mexico in a border town and able to place calls using a U.S. tower on the other side of the border and not have to worry about roaming.

        • And yet, most phones (I know that mine does) have a setting where you can disable from connecting to roaming networks. I turned mine off ages ago. Real pity; we're entitled to free digital roaming, but Sprint doesn't handle it properly and charges us anyways, and well, in case you haven't heard, dealing with their customer service is less desirable than banging your head into a metal-spiked wall.

          • Re: (Score:3, Informative)

            by AndrewNeo (979708)

            I'm well aware of that, but most end users don't know about that (unless they're told by someone who does.) Also, you usually get free roaming.. inside the country. 'Leaving' the country is an entirely different roaming situation they neglect to inform you about.

  • by Logical Zebra (1423045) on Wednesday July 29, 2009 @09:40AM (#28865447)

    ...is pro-rated fees for breaking a contract early. If I decide Sprint sucks and break my 2-year contract after 18 months, I should have to pay the full $200 fee. I should pay $50.

    • I should have to pay

      No, you should have to pay whatever the contract, which you signed voluntarily, in good health and sound mind, stipulates.

      • by shentino (1139071) on Wednesday July 29, 2009 @09:49AM (#28865553)

        Not if monopoly power robs the consumer of bargaining power.

        It's akin to letting a majority of wolves outvote sheep on what's for dinner.

        • by El Jynx (548908) on Wednesday July 29, 2009 @09:58AM (#28865689)

          We've got the same discussions going on here across the pond, but we're a bit further along. Several laws have already been passed ordering carriers to stop blocking VoIP and such; in Belgium, iPhones must be sold independently of carriers. I think we're starting to get the mix between government intervention and free market right. On another level, we told the telco's to standardise the power plugs they use; they were given an ultimatum after mass public annoyance at all the different chargers we have, and told to "choose or have it chosen for them". Now micro-USB will be becoming the standard. We're getting there!

          It makes me wonder, though. I don't believe in free market anymore. There's just too many loopholes, lobbying being the biggest. And I think the U.S. government has a lot of corruption to stamp out before it can be as flexible as the EU has been hitherto.

      • by cgenman (325138) on Wednesday July 29, 2009 @10:16AM (#28865953) Homepage

        No, you should have to pay whatever the contract, which you signed voluntarily, in good health and sound mind, stipulates.

        This is America! If you have a greivence against a company, you have rights, you know. Your rights are protected by federal, state, and local laws.

        1. You have the right to binding arbitration by some bought-off company in Northern Virginia.
        2. You have the right to... well, that last one's it, really.

        I don't mean to be too flippant, but laws are definitely there to protect the consumer, and that trumps contracts. This is similar to how California finds most non-compete agreements invalid: a hungry person will definitely agree to one during an economic downturn, but it would unfairly prevent them from getting another job later. In this case, all cellphone companies have similar stupid rules, like binding arbitration.

        The law is your tool to protect you from that. Don't give up your rights too easily.

        WRT to free markets and contracts: I'll believe that *these* contracts fall under free market provisions of binding legal exchange of promises between two equal parties when *they* acknowledge the changes that I had written into the contract before sending it in, or even what the base contract was. Oh look, they've update the terms again. How quaint.

      • Re: (Score:3, Informative)

        by Thaelon (250687)

        AT&T's early termination fee is prorated [att.com].

      • by HangingChad (677530) on Wednesday July 29, 2009 @10:28AM (#28866101) Homepage

        No, you should have to pay whatever the contract, which you signed voluntarily...

        That argument is a codependent enabler for corporate abuses. If all the cell providers are using basically the same language in their contracts, consumers have no effective choice. Try to find a brokerage account that doesn't make you waive your rights to seek redress in the courts. They don't exist, because they're all using the binding arbitration clauses in their contracts. Consumers have no effective choice.

        And, always in the background, some pompous, know-it-all dick saying, "If you don't like it, don't sign the contract." If that was the case, you wouldn't have a cell phone, telephone, car, bank account, investment account, 401(K) or internet connection. When companies collude on contract language, they are functioning as a cartel not free market players. When you don't have a choice, it's not a free market.

        Stop sticking up for abusive behavior, makes you look like a tool.

        • by Shakrai (717556)

          And, always in the background, some pompous, know-it-all dick saying, "If you don't like it, don't sign the contract." If that was the case, you wouldn't have a cell phone, telephone, car, bank account, investment account, 401(K) or internet connection. When companies collude on contract language, they are functioning as a cartel not free market players. When you don't have a choice, it's not a free market.

          Actually I bought my car with financing from a local credit union that has it's own contracts that don't contain any of the usual (binding arbitration being the big one) anti-consumer clauses. There are choices out there for most of the services that you mentioned -- you just have to look for them.

      • by plague3106 (71849)

        You mean the same contract which every other mobile carrier has, thus leaving you with a choice of "have a mobile phone or not?" Thats coersive, and only works because mobile carries dicate which phones you can use. If we had to buy phones seperately from service, we'd have better phones at lower prices, and there'd be no need for a contract. But that's not what the phone companies want, because thye want to force you to sign up for at least a year, in some cases two, and use the early termination fee as

      • by ceoyoyo (59147)

        Careful. I bet you've signed at least one contract that has a section that lets the company change the terms at any time.

    • by nedlohs (1335013)

      In which case the fee will be increased so that most people still pay $200.

      Did they hold a gun to your head when you signed the thing with the obvious non-pro-rated fee? If not why "should" you have to pay less than what you agreed to?

      • by shentino (1139071) on Wednesday July 29, 2009 @09:50AM (#28865571)

        Did you have a snowball's chance in hell of negotiating? Did competitors give them any incentive to be reasonable?

        No and no.

        • by nedlohs (1335013)

          My cell phone plan has no termination charge, so signing up for one that does is clearly a choice made by the signer.

    • Sprint DOES prorate the ETF for all contracts signed after November 2008. However, there is still a minimum of $50, so your ETF after 18 months would be $87.50

      See http://nextelonline.nextel.com/en/services/termination_fee/early_termination_fee.shtml [nextel.com]

    • by Hadlock (143607)

      Carriers change fees all the time. For example T-Mobile just increased their minute overage fee (July 27th), freeing all T-Mobile customers from early termination fees because they changed the term of the contract. After 30 days the "loophole" closes and you're back to paying those fees. But about 4 times a year something like that happens and you can terminate with 0 fees. But I really like T-Mobile and my awesome cheap plan so I'm stickign with them (for now).

  • by Hal_Porter (817932) on Wednesday July 29, 2009 @09:40AM (#28865453)

    WTF? I regularly post to slashdot while I'm driving to

  • by popo (107611) on Wednesday July 29, 2009 @09:45AM (#28865513) Homepage

    The Consumerist reported that Verizon text messaging is marked up by 7314% when compared to the relative cost of other data transfer services. Prices for text messages have also risen from .10 to .15 to .20 in recent years, even as the costs of data throughput have decreased.

    ( http://blogs.consumerreports.org/electronics/2009/06/text-messaging-rates-overpriced-att-aprint-verizon-t-mobile.html [consumerreports.org] )

    The reason for this is simple: Greed and collusion.

    Consumer Reports has this to say on the subject:

    "As CU has noted, less than four years ago rates to send a text message were 10 cents per text at the nation's four big wireless carriers: AT&T, Sprint, T-Mobile, and Verizon Wireless. Each company then raised rates to 15 cents, then to 20 cents.

    To CU, these text-message rates, along with exclusivity deals for certain cell phones, exemplify the need for âoemore oversightâ into the wireless marketplace, to âoedetermine if government intervention is necessary.â

    • by alen (225700)

      VZ is like a supermarket and other businesses that sell lossleaders and make it up on other products. in this case a lot of phones are lossleaders because they sell you a phone for less than retail price and make up the difference on the monthly charges. texting is just there for people that want it to help pay for all the phones. once 4G networks come along texting will be free and they will charge for something else.

      the cash price of a monthly cell phone contract hasn't changed much in the last 10 years w

      • in this case a lot of phones are lossleaders because they sell you a phone for less than retail price and make up the difference on the monthly charges.

        You just cited what I believe is the worst aspect of the American cell phone industry as a benefit. I understand a lot of consumers don't want to drop $150-400 on a cell phone at the beginning of their service so it's wise for the cell phone companies to offer plans which dramatically subsidize the price of the phone by spreading it across a 2 year contract. However, if I bring my own phone I can't get a better rate. I still have to pay the "subsidize the phone" rate price even if I already have paid for

        • by alen (225700)

          that's because you are a small niche and not worth the effort to create a new marketing and rate plan that may have to go through a lengthy approval process by multiple agencies at federal and state levels. The vast majority of people buy new phones every 2 years from the carrier.

          • what a weird argument you're making here. are you suggesting that federal and state agencies prevent the phone companies from changing their plans and pricing? if they do, it can't be that much of a hassle, because Verizon does it all the time!

          • The vast majority of people buy new phones every 2 years from the carrier.
            Hardly surprising when they are paying for them (or a substantial portion of them) whether they want them or not.

            I remember it used to be like this in the uk, then one of the providers (I think it was 02) started offering a sim only tarrif that gave you more service for your money than the regular tarrifs and soon enough loads of others followed suit.

          • by EllisDees (268037)

            Maybe that's because the pricing schemes thought up by the phone companies all include the price of paying back the subsidy on a cell phone in their 'normal' rates. If they cut out the 2 year contracts, the true price of the service itself could be used. Instead, we are all subsidizing new phones whether we have one or not.

        • seriously. and add to your example that at some point over the term of your contract, you wind up paying off the subsidy (probably long before your contract ends). but your rate never goes down. even at the end of the contract, when surely the phone company has recouped the subsidy, you never get a discount.

          the phone companies are playing a shell game, and we're all suckers.

          if the price of a iPhone is too daunting for your customers, do what other retail stores do, pay by installments!

          there's no reason yo

    • by mcgrew (92797)

      My text messaging is free, as is my voicemail and internet. And I don't have to pay minutes, it's a flat $50 per month. It's going to cost over a hundred bucks to replace my stolen phone, though.

    • by ndavis (1499237) on Wednesday July 29, 2009 @10:00AM (#28865717)

      I think this is a ploy to get people into lucrative monthly plans where you will almost never send the amount of text messages you need to cost them any money. As an example I sometimes send 150 text messages a month luckily I have a $5 plan that allows 250. However the next three months I might send 5 text messages and Verizon wins as I used no where near that amount.

      Saying that I would love to see the companies not be allowed to run one plan that subsidizes the phones even after you ran through the two year contract. I feel I have to get a new phone every two years or I'm ripping myself off as I'm still paying for a phone that I have not received due to the contracts being overpriced.

    • We have to get the telecommunication providers to be just infrastructure providers connecting us, like for the Internet, being neutral of the content.
      Or someone should create a 3G network (or something similar) that just allows painless twitter, blogging, im, email and maybe skype/voip.
      I mean, obviously we need text-messaging, email and IM more than anything else?

      • by alen (225700)

        Apple and AT&T tried this with the original iPhone and it failed. The original iPhone plan was cheaper than the current one but you had to pay $600 for a new phone. When they went to the normal model where AT&T sold it below cost and made up for it over 2 years sales went through the roof.

  • by BadAnalogyGuy (945258) <BadAnalogyGuy@gmail.com> on Wednesday July 29, 2009 @09:46AM (#28865519)

    On the one hand, texting while driving is about as dangerous as drinking and driving. It takes eyes and concentration off the road and puts everyone else at risk. It is an activity that ought to be illegal.

    But first of all, do we want the federal government having that kind of control over the states? The actions taken by the federal government ought to be carefully weighed with the impact it will have on all states. National defense, public educational standards, immigration and border controls, healthcare. These are the things that Washington ought to be concerned about. Not some 16 year old field hockey player driving her mom's Durango with her boyfriend's hands between her knees and her eyes on her iPhone.

    Secondly, what are we actually defining as texting? Technology changes so rapidly that a measure like this can only be relevant for a short time.

    Leave the texting laws to the states. Don't let the federal government bully the states into making the laws.

    • Re: (Score:2, Troll)

      by Shakrai (717556)

      National defense, and immigration and border controls. These are the things that Washington ought to be concerned about.

      Fixed that for you.

    • But first of all, do we want the federal government having that kind of control over the states?

      This is nothing new. The Fed collects the money from the states and then uses it as a stick in order to push their will back onto the states. Sure, it was the states money to begin with, but the only way to get it back is to comply with whatever the Fed wants the state to do.

      IMHO, the likely upcoming of legalization in CA will be very fun to watch. Federal agents can (and most likely will) keep arresting those

      • by Shakrai (717556)

        Federal agents can (and most likely will) keep arresting those who are using pot, while it's completely legal in the stat

        Actually they'll probably arrest those who are engaged in the business of selling pot, not those who are merely using it. Your point is still valid though.

        Hopefully more and more states will start giving the finger to the Fed and do what's in their best interest and not some random law passed from on high in DC.

        A few of them are trying to. It's not just pot [time.com] either....

    • Secondly, what are we actually defining as texting? Technology changes so rapidly that a measure like this can only be relevant for a short time.

      Exactly, if there is any banning/law making to do, it should be towards the use of the (type of) device entirely while the vehicle is in motion. Do you get a larger fine if you are talking, than texting?

      Officer: Do you know how many characters you sent?

    • by ivan256 (17499) on Wednesday July 29, 2009 @10:22AM (#28866021)

      Texting while driving is already illegal in all 50 states.

      It's called reckless driving [wikipedia.org].

      This new requirement is just posturing. It's a waste of time, effort, and money. It also contributes to the growing problem of federal law being vast and un-knowable by any single individual.

      Go congress!

    • by Logical Zebra (1423045) on Wednesday July 29, 2009 @10:29AM (#28866117)

      On the one hand, texting while driving is about as dangerous as drinking and driving. It takes eyes and concentration off the road and puts everyone else at risk. It is an activity that ought to be illegal.

      Actually, it's worse. Car and Driver did a test comparing the two [caranddriver.com], and they found that text messaging while driving is worse than driving while intoxicated.

      The reason? My guess is that when you're driving buzzed, at least you're (hopefully) giving the road your undivided attention.

    • by Lumpy (12016)

      On the one hand, texting while driving is about as dangerous as drinking and driving. It takes eyes and concentration off the road and puts everyone else at risk. It is an activity that ought to be illegal.

      Really? I guarantee I can point to about 500 text messages that I sent while traveling at 70-100mph and all were very safe.

      They all were sent by my PC that was sending GPS coordinates and telemetry during a rally race. Under the laws proposed, I'll be arrested for texting while driving.

  • by gubers33 (1302099) on Wednesday July 29, 2009 @09:49AM (#28865551)
    What's next I won't be able to brush my teeth or shave while I drive either.
  • It is a terrible abuse of power for the U.S. Congress to try and force states to ban text messaging while driving. I have no problem with states doing so, but it is something that should be done at the state level not at the federal level.
    One of the advantages of the U.S. system is that various states can try different approaches to address problems, each with their own idea of the best way to fix the problem. Then other states can adopt the approach that best solves the problem with the fewest negative u
    • Re: (Score:2, Insightful)

      by Weeksauce (1410753)
      Isn't this similar to the 21 year old drinking age though? State laws dictate the actual drinking age (hence why you can have a beer at 18 with your parents in a resteraunt in Texas); however, don't expect to get federal road funding if it's not 21. Not saying that I agree with it, but the 21 year old drinking age is something that's widley accepted and rarely critized.
      • I disagree with that one as well. The first time Congress stuck its nose into states' business using federal highway funds was the 55 mph speed limit.
        These types of laws are a bad idea and should be opposed. People constantly want to use the power of the federal government to stick their noses into issues that are none of their business. If people in the neighboring state want to allow text messaging while driving, that is their right (I think it is a bad idea, but I don't live there, so I don't get a say
      • Re: (Score:3, Informative)

        Where do you live that it's 'rarely criticized'?

        This even just came out recently: Doctor who was on presidential commission that pushed to raise drinking age to 21 regrets change, believes it did more harm than good. [latimes.com]

    • by mcgrew (92797)

      I am sure there should be laws against text messaging while driving, but I agree it shouldn't be at the federal level, and that text messaging isn't the only thing you shouldn't do while driving. But text messaging is something that's done a lot more often than applyijng makeup while driving, and worse it's done more often by young, inexperienced drivers than people who have been behind the wheel for ten years.

      You could get pulled over for careless driving or worse if you're reading a book while driving. An

  • What if people who feel the need to text while driving are provided with a "heads-up" keyboard display on their windshields like fighter pilots have? Entering text could be a simulation of "shooting" the desired virtual key via buttons on the steering wheel.

    Not practical at the moment, I'll admit, but it would be easier than prying the devices out of folks' hands. Think of all the fun that could be had by blasting away at the idiot in front of you. Stress reliever?

    Disclaimer: I do not own a cell phone and b

  • I'm afraid that the only way to prevent people from texting while driving is for the companies to shutdown that feature, permanently.
    But, as it is a large cash-cow for them, they will not do that as a preventative measure. Quite a few people will die in accidents where someone was texting and studies will have to be done to show what we already know - if you want to talk or text someone, pull over to the side of the road FIRST. Don't drive distracted; the life you save may be someone you know.

    • Re: (Score:3, Insightful)

      by dagamer34 (1012833)
      How would the phone know if a person is driving as opposed to sitting in the passenger's seat. It's almost as bad as car navigation systems that refuse to allow you to put in a new address while driving, even if there's a 2nd person in the car.
      • by thewiz (24994) *

        I meant that the cellular phone company would have to shutdown texting as a service for everyone, everywhere, forever not just for the texter when driving. People will find a way around any technological gadget to block texting or phoning while driving. I am advocating that people driving cars should pull over to the side of the road before making/answering a phone call or text message. Not paying attention to the road conditions, other cars, etc. is a sure way to cause an accident.

    • by schwit1 (797399)
      Insurance companies could help. They should have a clause that nullifies the policy if the driver was using a cell phone or texting near the time of the crash.
      • by Lumpy (12016)

        Prove it was the driver.

        I hand my phone to my wife a lot for her to answer. If some numb-nut side swiped me when she was on the phone, Insurance looks at the phone records, sees a call on mine and nullifies the insurance?

        No thanks.

  • "There is also legislation in the works that would require states to impose a ban on text messaging while driving or lose a significant portion of their federal highway funding."

    This is the same crap the Fedgov pulled when their attempts to force a minimum drinking age on states got shot down in court. It's time 34 states got together for a constitutional convention and crammed an Amendment down the Feds' throats to put an end to stuff like this. It can be narrow in scope to just cover the highway funds, bu

  • Well do you? That's the Fat Lady tuning up to sing the funeral dirge for the telecoms death grip on the wireless industry.

    Let the blade of the guillotine fall and fall again! Make them feel the icy bite of the steel on their flesh, realizing the cold hard fact: Don't piss off the paying public, you may wind up in the ditch.

  • by giltnerj0 (210486) on Wednesday July 29, 2009 @10:24AM (#28866047) Homepage

    I use Verizon atm, and I noticed that if you open an account, and get a subsidized phone by signing a 2 year agreement you get whatever the rate is. Why, after two years, when theoretically you have paid for the subsidized phone, doesn't your monthly bill go down. Now if you upgrade the phone after 2 years with a 2year renewal, I can see keeping the price the same. But otherwise, they should be required to tell you how much of what you are paying each month is going to paying for the phone, and drop that cost when the phone is paid for.
    Also, if you bring your own phone, you don't get a reduced rate, you just don't have to sign up for 2 years.

    • Re: (Score:2, Interesting)

      by 4pins (858270)
      "Why, after two years, when theoretically you have paid for the subsidized phone, doesn't your monthly bill go down."

      Because that would be a disincentive for you to coming in and pick up and new phone and another two year slavery term.
    • Count yourself lucky. In Canada if you bring your own phone and don't sign a contract you pay more.

      Oh, and cancelling the contract isn't $200, it's $400. Plus another $100 for your data plan.

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