USA: Cell Phone Industry Regulation

[mkrishnan]

What do you think of cellular industry regulation in the US? Too little? Too much? A need for deregulation or enhanced government planning to create a stronger infrastructure?

My thoughts are the industry could be much more competitive on the large scale if some enhanced regulations were in place. The industry is competitive, but not as much as it could be. What I'd like to see...

- More measures to protect consumer ability to jump carriers. That we finally have number portability working is a great step, but people are still too chained to contracts whose timescales of 2-3 years are too long on the technology cycle -- perhaps some kind of formal legal requirement for device unlocking at the end of a contract and limitations to some extent on ETF's.

- Enhanced guidance in next generation technologies. If we can't get to a single 4G standard that would allow all unlocked phones to carry from any major US provider to any other provider (which would be my preference), I think the government at least should think carefully about not letting situations occur where incompatible technologies are used within the CDMA or the GSM camp. For example, I think it was a bad call to let the situation come to play where two different bandsets for HSPA were auctioned off, leading to the two national GSM carriers having incompatible 3G networks. T-Mobile definitely deserves a significant share -- perhaps the lion's share -- of blame for this, but the government could have averted a situation that robs customers of choice (because most of them will not be able to switch 3G contracts readily back and forth between AT&T and T-Mobile). At the least, the goal should be that every x generation (e.g. 4G) CDMA-roadmap device can be used on all CDMA carriers if it's unlocked and likewise every GSM device can be used on all carriers who implement that generation of device.

Alongside this should be appropriate measures to ensure that no handset OEM gets locked out of the market because of the technology chosen.

With those two things, at least every customer would be able to more freely walk through "half of the kingdom" -- forcing GSM companies to compete more strongly to retain GSM customers and CDMA carriers to compete more strongly for CDMA customers.

And then also...

- Some kind of plan to help blanket rural coverage for data services catch up with metropolitan coverage so that we don't have a system where city dwellers have 4G and the countryside has GPRS.

 

[yg17]

The main problem with having 2 bands for HSPA is spectrum. It's simply a limited resource. T-Mobile had no choice but to use the AWS (1700/2100) bands for their 3G network because there just wasn't anything available in the 850 and 1900 bands. You can't fault them for that. Their choice was to either use AWS for 3G, or have no 3G at all. I'd say it's the government's fault for letting AT&T hoard all of the 850 and 1900. Before the AWS auctions, Verizon only had 850. Sprint only had 1900, and T-Mobile only had 1900. I don't know why the government, as part of the Cingular/AT&T merger, couldn't make them give up their 1900 to make everything more equal among the carriers.

It would be nice if all carriers used the same technology on the same frequencies, and you could use your phone on any of the big 4, but it's just not possible. Verizon, AT&T and T-Mobile are all moving towards LTE for their 4G network (LTE is from the GSM line of technologies) which is great, but they'll have to be on different parts of the spectrum. The only thing we can hope for is that the phones that come out will support all frequencies.

 

[chagla]

Cell phone service providers in the U.S are like ruthless butchers. I'll tell you why.

Take Bangladesh for example. This is a country where only a small number of people had land lines. Cell phones were for the elites. In just a few years, from few land phones scenario, it changed to everyone having a cell phone! It's more like, over 80% people now have a cell phone. You scratch your head, and ask, how? It doesn't take a genious to figure out the answer which is obvious, price.

Cell phones are not subsidized by service providers. So its YOUR phone, you can use it with anybody you want, you don't have to "unlock" the phone you paid for so that it works with another vendor. Even then, the phones are very very cheap. For roughly $30 to $40, you can get a basic cell phone. Try that in the U.S.

Service cost is antoher factor. The entire Bangladesh market is "pay as you go". Fully diseposeable. Talking is dirt cheap. It costs like less than THREE cents per minute, to any network, any time of the day!!! No, the previous sentence reads as you've just read.
- Unlike U.S, you don't lose YOUR minutes/money for incoming calls. 100% free, talk for the whole day!
- Refill from any store. Mobile phone agents are every where.
- Out of balance? YOu can request someone who can remotely add money for you.
- you don't lose your balance / minutes for not using them.

there's no early termination fee, no monthly fees of any sort. just buy the phone and minutes as you go along. but in the US, even the pre paid plans have so many restrictions, fees, and all sorts of craps. its like they're money hungry vultures man. evil. pure evil. how can a poor country like Bangladesh afford to have cell phones for everyone, and not in the uS?

its just ridiculus how much they charge here in the U.S. what you pay in 2 or 3 months in the US for cell phone, that is probably enough for a whole year of service in Bangladesh. It may not be advanced in many fields compared to the US but for cell phone, it is much ahead of the US.

 

[mkrishnan]

It would be nice if all carriers used the same technology on the same frequencies, and you could use your phone on any of the big 4, but it's just not possible.

This is the part where I don't fully follow you. Perhaps for existing technologies in the development of which the US government has not been involved, but considering that service providers in other countries such as Japan serve much denser population areas just fine, what is it about the tiny population of 300M people in the relatively low density United States that means that they couldn't all use cell phones on the same spectrum? Is there a technical reason related to spectrum bandwidth that would prevent all cell phones from using the same technology on the same set of frequencies? Particularly since cell phones are often able to use several bands already, for that matter, is there a technical reason that all providers for the US's 300M people could not in principle use portions of each of those bands that are commonly supported so that in essence, still, the hardware at least could be cross-compatible across providers?

If it's a matter of having too many towers / satellites in a metropolitan area working on the same frequencies, then there are legal workarounds for that like cross-usage agreements that we use for most of our other infrastructural resources like landline telephone cabling and the electrical power grid. That's a logistical barrier and not a technological one. Again, the cell phone systemry of our country is an infrastructural resource, and an increasingly important one at that!

Chagla, I do see the point you're making, although, to be honest, the success of cell phones in Bangladesh or WiLL in India is not necessarily the greatest case study with respect to planning infrastructure for advanced data services. But you're definitely right with regard to the last point I made. Countries like Bangladesh clearly show that, if it is a priority, providing near parity level access to cellular technology in rural villages is feasible and economically viable. We should really look at that technology to assist our own rural villages here in the States....

 

[migulic]

Cell phone service providers in the U.S are like ruthless butchers. I'll tell you why.

Take Bangladesh for example. This is a country where only a small number of people had land lines. Cell phones were for the elites. In just a few years, from few land phones scenario, it changed to everyone having a cell phone! It's more like, over 80% people now have a cell phone. You scratch your head, and ask, how? It doesn't take a genious to figure out the answer which is obvious, price.

Cell phones are not subsidized by service providers. So its YOUR phone, you can use it with anybody you want, you don't have to "unlock" the phone you paid for so that it works with another vendor. Even then, the phones are very very cheap. For roughly $30 to $40, you can get a basic cell phone. Try that in the U.S.

Service cost is antoher factor. The entire Bangladesh market is "pay as you go". Fully diseposeable. Talking is dirt cheap. It costs like less than THREE cents per minute, to any network, any time of the day!!! No, the previous sentence reads as you've just read.
- Unlike U.S, you don't lose YOUR minutes/money for incoming calls. 100% free, talk for the whole day!
- Refill from any store. Mobile phone agents are every where.
- Out of balance? YOu can request someone who can remotely add money for you.
- you don't lose your balance / minutes for not using them.

there's no early termination fee, no monthly fees of any sort. just buy the phone and minutes as you go along. but in the US, even the pre paid plans have so many restrictions, fees, and all sorts of craps. its like they're money hungry vultures man. evil. pure evil. how can a poor country like Bangladesh afford to have cell phones for everyone, and not in the uS?

its just ridiculus how much they charge here in the U.S. what you pay in 2 or 3 months in the US for cell phone, that is probably enough for a whole year of service in Bangladesh. It may not be advanced in many fields compared to the US but for cell phone, it is much ahead of the US.

Wow... I had no idea that the US phone market was so bad. I live in Belgium and the things you mention (pay-as-you-go, no simlock, not paying for incoming calls, actually owning your phone) are normal here. The market is split pretty much even between post-paid (contract) and pre-paid, with post-paid being mostly business users or other people who call a lot.

Also, do you really have to pay for incoming calls in the US? If so, that's just... evil . Someone calls you but you still have to pay for it? That's like paying for receiving mail.

 

[mkrishnan]

I think part of that might be a misunderstanding.

- PAYG is quite common here (USA).

- SIM / firmware (since half or more of our phones are CDMA, it's not all SIMs) locks are almost universal, but companies will generally unlock a phone at no charge for contracted post-paid customers upon request

- Even in the case of locked phones, we always own them. We can buy and sell them as we please. They are locked, but they can always at least be bought and sold between customers of that carrier, and as above, they can usually be unlocked upon request. That being said, I would like to see the norm become that unlocked phones are more common here.

- Paying for incoming calls is pretty universal in the US. But our postpaid plans have so many minutes that it tends to be a negligible issue. I mean, I have 1000 minutes of time, without counting the free weekends and nights. I just don't have the time to talk that much during the day (but the plan is cheap, so there's no point in going to a lower number of minutes). So effectively usage of minutes hasn't been an issue for me in at least the past five years. I was in a long distance relationship even, for most of last year, and we would talk for about 1900-2500 minutes a month, and just because we both work and don't have time to spend three hours talking on the phone in the middle of the day, overage chargers were never an issue.

I had an issue once five years ago, but that was because a very talkative engineer from GM would call me all the time on my personal cell phone and talk my ear off. And even that only caused me overage once.

So I don't know about everyone else, but to me, the incoming calls thing is actually generally a non issue. I guess I'd feel differently if I were on PAYG, so I do see the point to some extent, but honestly for postpaid customers I'd say it's a low priority issue....

 

[yg17]

This is the part where I don't fully follow you. Perhaps for existing technologies in the development of which the US government has not been involved, but considering that service providers in other countries such as Japan serve much denser population areas just fine, what is it about the tiny population of 300M people in the relatively low density United States that means that they couldn't all use cell phones on the same spectrum? Is there a technical reason related to spectrum bandwidth that would prevent all cell phones from using the same technology on the same set of frequencies? Particularly since cell phones are often able to use several bands already, for that matter, is there a technical reason that all providers for the US's 300M people could not in principle use portions of each of those bands that are commonly supported so that in essence, still, the hardware at least could be cross-compatible across providers?

If it's a matter of having too many towers / satellites in a metropolitan area working on the same frequencies, then there are legal workarounds for that like cross-usage agreements that we use for most of our other infrastructural resources like landline telephone cabling and the electrical power grid. That's a logistical barrier and not a technological one. Again, the cell phone systemry of our country is an infrastructural resource, and an increasingly important one at that!

It is a technical issue. 2 towers within a certain distance of each other cannot use the same frequency. The 850 and 1900 blocks of spectrum are divided up into a few large blocks and given out to the carriers, who then divide them up even further and use a different frequency within that band for towers within an area. But when the entire 850 or 1900 block is being used, that's it. If you want to expand, you have to use different frequencies, and that's where 1700MHz comes in, and soon, the 700MHz block once analog TV goes off the air.

I don't like the idea of cross-usage agreements either. A crappy carrier who has poor coverage, dropped calls and bad voice quality should have to either improve their network, or eventually lose all of their customers and go out of business into oblivion. They shouldn't be able to survive at the expense of another carrier.

 

[migulic]

I
- Paying for incoming calls is pretty universal in the US. But our postpaid plans have so many minutes that it tends to be a negligible issue. I mean, I have 1000 minutes of time, without counting the free weekends and nights. I just don't have the time to talk that much during the day (but the plan is cheap, so there's no point in going to a lower number of minutes). So effectively usage of minutes hasn't been an issue for me in at least the past five years. I was in a long distance relationship even, for most of last year, and we would talk for about 1900-2500 minutes a month, and just because we both work and don't have time to spend three hours talking on the phone in the middle of the day, overage chargers were never an issue.

I had an issue once five years ago, but that was because a very talkative engineer from GM would call me all the time on my personal cell phone and talk my ear off. And even that only caused me overage once.

Still, why should you pay for something someone else does? You can't control when someone calls you... Like in your example with the engineer.

Also, this might sound like a stupid question, but do you have to pay for received text messages too?

 

[Unspeaked]

Also, this might sound like a stupid question, but do you have to pay for received text messages too?

Yes, and this bothers me way more than incoming calls, which I can simply ignore if I choose to.

In theory, you can find the mobile number of someone you dislike and send them a barrage of texts, costing them 15 or 20 cents each!

 

[BigHungry04]

You could switch to SprintNextel, they have free incoming calls.