Remember when we could sign up for a one-year contract? Why did carriers eliminate that option? The reason is that locking in customers for two years is twice as good for the carriers as one year. They make more on early-termination fees. They get to create the illusion of lower monthly prices by spreading the cost of a handset discount across 24, rather than 12, months.
Carriers collude with handset makers to artificially link handsets to specific carriers. The iPhone on AT&T is one such example of collusion, as is the Palm Pre on Sprint and the G1 on T-Mobile. Carriers and handset makers create these fake limitations for precisely the same reason movie theaters don't let you bring in your own food -- because it creates mini-monopolies that enable gouging on prices. Why do you think 10 cents worth of popcorn costs $4.50 at the megaplex?
In some European countries, this practice is considered anticompetitive and is against the law.
The degree to which carriers want to reject net neutrality, which is little more than fair and equal Internet access, was revealed this month when AT&T and Verizon (and Comcast) rejected $4.7 billions in grants -- not loans, grants! -- in government stimulus money because they stipulated fairness in the provision of services.
Why would corporations reject free money? Because they've reasoned that they'll make more than $4.7 billion from you and me by rejecting the fair, equitable provision of mobile broadband services.
I don't know if it was AT&T, Apple or both that decided that the Google Voice app should be banned from the iTunes store, but locking out services that threaten total control is standard operating procedure in the U.S.. wireless carrier industry. Competition and innovation is the last thing carriers want. So they use their ownership of the wireless pipes to block the applications and services that would need to move through those pipes.
As the public becomes increasingly outraged at the carriers' unethical, shameless and anticompetitive actions, their response is not to improve behavior, but to spend customers' money on hiring lobbyists to influence Congress and the White House. In a recession, when companies are cutting back and laying off workers, both AT&T and Verizon are increasing the millions spent on hiring lobbyists to influence the government.
With nearly every netbook, smartbook, eBook reader, GPS device, digital camera and wristwatch poised to potentially support mobile broadband wireless connectivity, the carriers are positioning themselves to seize control of the consumer electronics industry. They want to become the electronics superstores, extending their abusive business model beyond cell phones to encompass every future device with a wireless connection.
Cell phone carriers have rights, too. They own the towers and the servers that make wireless voice and data connectivity possible. They have the right to use their capital as they please, charge what they like and offer whatever combination of prices and services that the market will bear.
But all that equipment is useless without access to the airwaves, which are by law owned by the people. And that's what makes the wireless carriers business different from other industries. Companies that are granted licenses to use the publicly owned airwaves should be required by our government to meet certain standards of fairness, equal access and competitiveness. That's not happening right now. It's time to let your state and national politicians know that you want this industry reined in.
This story, "10 Things We Hate About Wireless Carriers" was originally published by Computerworld.