Wireless Providers, Set Us Free!
The other day I received an email appeal from Free Press, “a national, nonpartisan, nonprofit organization working to reform the media,” to urge the FCC to end unreasonable penalties for switching cell phone providers or cancelling service.
Free Press’ mobile phone campaigns fly under a “Free My Phone” banner and feature a cell phone angelically equipped with white wings. For this specific campaign, though, the phone has been retouched with an angry facial expression and the indecorous exclamation “ETF, WTF?” The ETF stands for the “early termination fees” charged by cell phone carriers. And you know what the WTF stands for.
Free Press is fuming that “carriers still force us to pay outrageous penalties — up to $350 — if we cancel our phone service or switch carriers. There’s one question on everyone’s mind: WTF?” (Not everyone may phrase it that way, but it’s certainly a good question why termination fees are so high. After all, if you want to cancel your cable service, providers don’t hit you with exorbitant fees.)
Apparently, the FCC is asking the same question (though, perhaps, without the “WTF?”): “After Washington threatened to investigate its activity, Verizon began pro-rating its ETF (so you would owe less for every month of your contract). Google and T-Mobile also lowered the combined ETF on the Google phone from a whopping $550 to $350 — still obscene — after a FCC letter of inquiry about their behavior.”
In their letter appealing to the FCC, Free Press makes it case by saying that “for millions of Americans, mobile devices represent the future of the Internet. Mass adoption of new ‘smart’ phones is sparking online innovation and blurring the lines separating the wired and wireless Web.”
More and more consumers are certainly starting to use mobile phones to access the Web, and early termination fees are unreasonably high. This is all true enough. But do early termination fees really block access to information? Do they have any impact on the quality of the media broadcast through mobile platforms?
I sympathize with the urge to reduce termination fees and applaud Free Press for lobbying the FCC. But what remains unmentioned in this campaign is that these fees are symptoms of a monopolistic power play by carriers and device makers like Apple. What really will “free my phone” is to take players vying for dominance in the smartphone market to task when they create closed platforms with consumers locked into services and subscriptions, whether they want to or not. Even if AT&T would let iPhone users walk away from their service, they still can’t take their iPhone and use it on a different network, or sell it to a friend for use without voice or data services (as an iPod touch).
Perhaps this is beyond the scope of the current Free Press campaign, but the focus on early termination fees seems like a populist cheap shot, narrowly missing the real target: open platforms and full consumer ownership of smartphones.
This post was first published, in slightly longer form, on the blog @peterlux.
Peter Luyckx is the Managing Editor at Flip the Media. Recently, he worked as a Web Producer and Editor at Microsoft’s MSN Health & Fitness and MSN Shopping (now Bing). He co-founded and published the environmental newsletter The Frugal Environmentalist. He is a graduate student in the MCDM program and can be followed on Twitter @ peterlux.
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8 Comments, Comment or Ping
Lara Underhill
I agree with this campaign and with your comments about extending the debate to open up the platforms. I imagine Free Press is taking this initiative one step at a time – starting with the outrageous fees and then hopefully they would consider opening the debate to network neutrality.
One of the many things that this program has opened my eyes to is the many restrictions that come with all of the technology that has evolved over the years. As an “average consumer” I had no idea there was a difference between CDMA and GSM networks, let alone the control that Apple has over its products. With time and more exposure, I hope that the public learns more about the control of the mighty carriers and demand access to an open platform – even if it means Hooters is allowed to provide a “sexually suggestive” app…
Mar 2nd, 2010
jeffhora
Several years ago we were given the sop that we could keep our cell phone numbers when changing providers. Nice start……but there is more to choice than keeping a number.
When I purchase a laptop (even Intel-powered Apples) I have some choice of operating system, software and carrier. My portable PC starts out life “jail-broken”, so to speak. Even if it comes with everything pre-installed, I usually flatten the system and rebuild it the way I want, to connect the way I wish to a number of choices of data providers. Not so with my phone.
I stay with my current provider (for now….) because the coverage where I live and work is quite good. But I’m not impressed with the greater number of their newer handsets, despite wanting to upgrade both my phone and my wife’s phone. So now, the phone I’d like is ONLY sold via another carrier and the phone my wife wants is sold by a third. This is ridiculous! While Google will sell you a Nexus One for $529.00, it is only $179.00 with the T-Mobile plan (so why only T-Mobile? Oh, only GSM and 3G networks, so Sprint and Verizon are out……..But I get ahead of myself…).
I agree with you Peter….open platforms and ownership of one’s own connectivity is where the focus should be.
Mar 2nd, 2010
Seth Foley
One way that ETFs could block access to information is by preventing users from switching to a provider who offers better value for a data plan. Another is that the user may be locked into using a phone that does not offer the capability to access various online sources.
As Jeff mentioned, open connectivity is most likely the future of cell phones: globalization ensures that irritated international customers put pressure on U.S. phone companies to follow standards that the rest of the world uses. However, that is unlikely to happen quickly, and so the additional scrutiny from the FTC is a good step in the right direction for forcing these companies to play honestly and equitably.
Mar 2nd, 2010
mqjeffrey13
Great point Seth. I’ve often wondered about the future “globalization” of technology, especially phones. I wonder how long it will take before people who are tired of having to switch providers when they travel internationally pressure companies into adopting the standards you suggest. Actually, one of the best things about services like Skype is they give me the opportunity to “call” internationally for cheap. For instance, I have a friend who moved to South Korea to become an English teacher. He’s been there now for over a year, and he says he rarely uses his cell phone, because Skype enables him more freedom.
Mar 2nd, 2010
Amy Rainey
Hear hear, Peter! The entire system needs reform. Early termination fees from T-Mobile weren’t what kept me from getting an iPhone for two years. It was the prospect of being locked into two years of poor, yet expensive service on AT&T while the rest of my contacts talked for free to each other on T-Mobile.
Mar 3rd, 2010
Cat chien
Total agree that the ETF protest is a good area to start, and while an effort to push for full consumer ownership is also idea, what I would like to see is some faster adoption and deployment of mobile innovations in the US across all carriers to put us on par with our international counterparts. Why is the US so behind in the advances of mobile technology that are already considered standard applications in the Europe and Asia?
Mar 6th, 2010
David Jones
I agree with Peter that the protest should go beyond ETFs, but here’s my take on ETFs:
Early termination fees are really the poor means by which carriers try to maintain a customer base vs. focusing on improved services and coverage to build a “loyal” customer base. I often wonder to what degree ETFs actually hurt a carriers brand, and if carriers attempt to understand if there is a negative relationship between ETFs can customer retention?
Mar 7th, 2010
Brian Johnson
The simple fact is that people are willing to sign contracts with no hesitation. If people started balking at the mobile providers, we’d see a change in ETF policy. A few years ago, I would have said that we’d never see the kind of mobile services that Europe sees, but I have faith that eventually we will get there. Android is a step in the right direction. Selling unlocked phones is a step in the right direction. Number portability is a step in the right direction. I think we will get there, but it will take a while and the vocal dissension of customers will have to be loud.
If phone manufacturers make the same phones available on all networks, the carriers are going to have to start competing. When they start competing, things like ETFs will start to fall.
Mar 8th, 2010
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