Sunday, March 27, 2011

Tethering: The Carriers' New Double Dipping

I have a very hard time feeling any sympathy for corporations. They take in billions of dollars a year from their consumers, they're allowed to break anti-trust laws (see Microsoft), mergers that are anti-competitive (NBC/Comcast, AT&T/T-Mobile, etc), and gain major tax breaks from the government. So I don't shed a tear when corporations are taking it up the ass from the consumers (file sharing). The newest thing in the last coupld of years in the cellular industry is tethering.

Tethering, in relevance to cell phones, is just using the data connection on the phone to connect to a computer like a portable modem of sorts. There's also WiFi Hotspot which allows you to use the WiFi chip in your smartphone to allow multiple people to connect to your data connection. Before the 3G movement hit, tethering was really not anything to be paid attention to. Carriers didn't care if you did because their networks weren't even close to being bogged down. Plus, the barely 56 Kbps modem speed you could get hardly made it worth it.

This was what I would call the golden age of data. Unlimited plans were the norm because the consumers rarely used their internet connections. The connections were slow, had horrible lag, and the phones had terrible browsers to work with. All in all, the carriers were making out like bandits on data plans. They were virtually worthless to the consumer at the time, more of gimmick really, but the carriers could make huge bank on it.

As the golden age of data is now fading, the end of 3G movement and into the newly christened 4G movement have brought us a much greater use for our smartphones now. Android and the iPhone are the biggest contributors of this. With full-fledged browsers, Flash on Android, and higher speed connections, consumers are now getting greater use out of the data plans.

Carriers are now charging varying rates for their tethering plans, but the fact of the matter is that they are bullshit. Tethering, specifically in Android 2.2 and greater, is native to the operating system. It's built-in for free along with WiFi Hotspot. So let's just get the whole costing the carriers' anything argument out of the way.

Secondly, and most importantly, data connections are mostly limited. Carriers are moving away from unlimited data because they can no longer handle the network load. This is largely their fault. They had years of government tax breaks to improve their infrastructure, but chose to take the low road with purchasing other companies to obtain spectrum and towers. So in response, we now have limited plans (AT&T being the worst with a paltry 2 GB).

What this amounts to is the carriers double dipping. They are charging consumers for the same data twice. Only in the case of AT&T are consumers being allotted more data for taking on the plan. Never mind the fact that a user could run out their data streaming HD video on YouTube or instead WiFi Hotspot some friends. Either way, the user only has a limited amount of data to work with. This is the crux of the case. If users still had unlimited data, I could understand such a charge (partially), but since the data is capped, why should the carriers charge twice for it?

This is why the recent declarations by the FCC on net neutrality are complete shit. They provided an outline for what the land line companies could and could not do in order to preserve neutrality, but wireless carriers were exempt. Their reasoning even included the fact that Android was open which has absolutely nothing to do with the argument. By allowing the wireless carriers to define whatever terms they want, they effectively screwed the customers. Just look at recent events such as AT&T promising fines and fees to iPhone users that were tethering, a kernel in the Samsung Fascinate that was coded to report tethering, or a recent text message my girlfriend received about how tethering would be blocked.

Carriers are trying to police their consumers' data use with bullying tactics that are outright deceitful. Why should it matter how I use my allotted data? Would you really buy a DSL or Cable internet plan if they said you couldn't use a router to provide internet for the entire household? Why are we holding wireless carriers to different standards that land line providers? What is the point of net neutrality when we arbitrarily make the rules up as we go?

The charging for tethering has to stop. Carriers and service providers are supposed to be a dumb pipe. They are simply there to open the pipes for use. Allowing them to dictate how we use our data is the beginning of the end of net neutrality. It can only get worse from here folks.

Sunday, March 20, 2011

AT&T acquires T-Mobile...and it will likely never happen

Yep, it's just like it sounds. AT&T in all of their infinite insanity worked out talks with Deutsche Telekom, aka T-Mobile's German owner, to purchase T-Mobile for $39 billion. Of course, it will likely never happen. There's too much riding on the fact that adding in T-Mobile's 35 or so million customers would make AT&T the biggest wireless provider (sounds eerily familiar as to what happened when they got themselves broken up) with over 130 million customers. Next in line is Verizon with about 102 million customers. Finally, followed by Sprint with 40 million.

See the problem here? The term oligopoly comes to mind. When AT&T switched to tiered data plans or raised the prices on text messaging, all other carriers followed suit. More commonly called collusion, it's a disaster for consumers. With no real competition left in America, the wireless companies can charge outrageous prices for their services and no one can oppose them. As of last check, the big four (AT&T, Verizon, T-Mobile, Sprint) controlled 89% of all wireless in the USA. Sounds pretty rough, but hey, at least you had four choices or sometimes more depending on your location. In my town, there are really only three. There are things like Boost Mobile, Virgin, etc, but these are really just derivatives of the big four (possibly three now).

Of course, T-Mobile, in a bid to protect AT&T's investment, released the press junket with a Q & A on what was going to happen. This is just subterfuge for the reality of the situation in that all T-Mobile customers are going to get fucked.

It's funny how you can correlate specific events in your life to other events totally unrelated and make sense of something. My example here is my time working for Ryan's Steakhouse. I came in right around the fall of our Ryan's here in my town of Kokomo. Mismanagement, corporate fuckery, sagging sales, and stronger competition had led to the restaurant on the verge of collapse. Still, the place did have its moments and could show off some pretty nice numbers around the holidays.

A few months before the store closed down, word came to us that Old Country Buffet had acquired with Ryan's Restaurant Group. For months, rumors swirled at our business that they were going to shut down the weaker stores (ours had became one of them). However, we never knew it was coming until the very day it happened. The managers all told us it was a simple merger at the time and to not worry about it. This is the same logic that T-Mobile is doing right now. They're assuring the customers that nothing is going to change, but we all know that it is.

If AT&T does manage to get this through, you can say good-bye to the affordable rate plans, unlimited data, unique offerings that only T-Mobile had (UMA and WiFi calling, EM+ plans, etc), and of course, customer service. This is a bad deal in the making and the worst part is that if they do push it through, my choices and those of other consumers in my town and elsewhere, is extremely limited. Verizon's plans are expensive and their CDMA network is slow and outdated plus they are ridding themselves of unlimited data. Sprint has unlimited data, but suffers from poor signal where I live.

This is why we need solid competition. Monopolies and oligopolies strip the consumers of any choice, freedom, or buying power. Wireless communications is the future with more people abandoning land lines for it, and that future is dark indeed. We need this to be blocked because when we lose a competitor, everyone loses.