The American Wireless Galapagos Syndrome: How the industry set itself up for a rout

AT&T’s intent to acquire T-Mobile USA is subject to regulatory approval. Will regulators look at the deal through the lenses of sustaining the traditional industry’s profit allocation or through the lenses of device-led disruption?

In theory, regulators are to make a determination on whether the deal will reduce customer choice. But the question is really choice of what? The focus is presumably on the choice of service plans. That’s understandable, however coupled to that choice is the choice of devices and even more importantly, the choice of platforms.

The trouble is that US consumers have never had much choice and the US wireless marketplace has been a minefield of incompatibilities and obstacles to market forces.

To begin with, US carriers maintain multiple incompatible network standards. Phones which work on one network do not work on any other. A Sprint phone won’t work on AT&T or on Verizon. In fact, some Sprint phones won’t work on all of Sprint’s network as it still uses the iDen standard legacy from the Nextel acquisition. Even the iPhone which is designed for the AT&T network does not handle T-Mobile’s version of 3G. So a consumer cannot make a decision on devices independent of a decision on carrier. This is a phenomenon unique to the US[1].

Secondly, in the US carriers charge for incoming minutes and have shunned pre-paid customers. There was a time when SMS messages were not compatible between networks, which led to the emergence of RIM as the only wireless messaging solution available, though initially not to the average teenager.

Thirdly, because of the multiple incompatible standards, network coverage in the US is still abysmal. Each carrier has had to build out parallel (incompatible) networks at great expense using non-standard equipment over a vast landmass. The result is not only a very expensive network whose capex demands high service fees, but a very poor quality network which is always both spotty and capacity constrained. Operators are therefore keen to lock customers in to post-paid plans to ensure cash flows that drive capital allocations. This is essentially an upmarket flight which does not encourage low end innovation.

These idiosyncrasies are rooted in historical regulatory rulings that led operators to create a uniquely American wireless market. The key regulation was that the US shall have no single wireless standard. In the spirit of laissez-faire this may make sense. But the result has been failure of the common good. This is sharply contrasted with other developed countries which (with notable exceptions) deliver superior service with high efficiency.

The US is so unique that it developed its own “Galapagos syndrome”. Few global brands can be bothered to invest in it. Vodafone tried to play in the US with Verizon, but its minority position offered no leverage because Verizon spent the better part of a decade avoiding global networking standards. Now T-Mobile is desperate for an exit after trying to leverage the foothold it paid dearly for and failing to offer devices that capture users’ imaginations (because they were railroaded into another incompatibility with 3G). Conversely, no US brands have been able to expand internationally. US operators are non-entities abroad, even in what would be natural expansion territories like Latin America or the Caribbean.  Those markets belong to European investors today.

Given this background, it’s very likely that regulators will look at the deal in terms of balancing what is essentially a deeply flawed, cobbled together industry.  Companies can argue that they are rationalizing through consolidation but regulators can argue that “choice” is decreasing. These arguments are mostly moot. The problem is that the US wireless market is balkanized and byzantine.

It’s therefore perhaps stunning that the platforms that are currently winning in mobile computing are American: iOS and Android[2]. Note further that none of these winners came from the world of wireless or telecom. These new points of profit condensation in the industry entered from a different industry: computing. But are they now pursuing telecom-compliant strategies? Arguably no. I choose to call them mobile computing and not phone platforms specifically because they will tolerate the cellular regimes as long as they need to, and no longer. Once they will reach the perch of power, the industry will conform to them, not vice versa.


  1. Japan has a similar problem but less pronounced.
  2. Microsoft is still in the running as is Palm, both American.
  • Childermass

    This blog should be referenced on every news site. Is the irony in the possibility that regulators will allow AT&T to mop up minnows as it is 'American' and therefore somehow trustworthy, but recreating an old monopoly? There is a similar complete lack of coherence or competition in cable TV provision. Both industries ripe for disruption. Good!

  • I have always felt that iOS and Android have succeded not because, but in spite of the insanity that is US wireless. Activation fees, early termination fees, 2(!) year contracts. Coming from Denmark, where we have over 10 unique country-wide providers, built on no less than 4 independent, but totally compatible networks, it just seems otherworldly.

    It would be interesting with more insight into how it got to this point, and what the long-term perspective is for these monsters.

  • Luis Masanti

    "It’s therefore perhaps stunning that the platforms that are currently winning in mobile computing are American: iOS and Android[2]. "

    I think that, at least iOS, has succeded because it bring back the option to the user.
    Apple took almost all of the decision out of the carrier back to the user.
    As in the begining of computer, before the coming of the "standard" driver for peripherals, in cellphone you bought what and how the carrier want to sell and provide you.
    Apple changed all that. Apple –at the end– made the carrier a pipe. The problem is that, in the US, carriers' pipes are of different sizes and materials, like the cable companies.

    Maybe LTE becomes a good chance to standarize. But way, there are many "options"!

  • 2sk21

    Would GSM have gotten any kind of a foothold in the US without Apple?

    • asymco

      Yes, I believe GSM got a foothold in the US at least by 1996 with Omnipoint Technologies, later acquired by VoiceStream (circa 2000), which was acquired by T-Mobile.

  • Hamranhansenhansen

    I am on AT&T in the US, and the one and only feature I want for my iPhone is for Apple to be my carrier.

  • What's the reasoning behind T-Mobile USA having a different 3G band to AT&T and the rest of the world for that matter? It just seems bonkers crazy.

    It's also ironic for Nokia I guess in that now they've finally persuaded a US carrier to pick up their pentaband 3G models (C7 coming to T-Mobile) which would seem to be ideal cross-carrier compatible handsets, that T-Mobile USA are merging with AT&T.

  • So by deregulating the wireless industry, the carriers became the regulatory body.

    By building strategic walls around their business, the US carriers killed their ability to expand beyond the US.

    • Childermass

      Yes, and this parochialism is not limited to this industry. I suspect it stems from the apparent inability for them to see anything outside America. The domestic market is so big surely that's all they need worry about?

      I remember being puzzled when Apple said they were introducing a CDMA phone that all the (American) commentators were certain they had done it for Verizon and Verizon alone. Not one seemed to consider how many iPhones Apple are going to sell in China and India as a consequence.

  • Xavier Itzmann

    «The key regulation was that the US shall have no single wireless standard»

    Please explain.

    • Synth

      The government didn't force the telcos to agree on a single standard. They let them all use whatever standard they wanted. Sort of like if the government had allowed multiple HDTV protocols, each tied to the various networks. If you wanted to watch NBC you would have to buy a Sony but you couldn't watch CBS.

      I think.

    • Paul

      There is an American political philosophy that states that the best regulation is no regulation at all.

      Thus when the regulations for the cellphone industry were written, they were technologically agnostic. Unlike in Europe and most of the world, no cellphone standard was mandated. Each company could, and did, use it's own incompatible technology.

      That means, among other things, that when AT&T drops my call, it is because there was no tower available to hand the call to. Actually there was a tower available, but it used an incompatible technology. In Europe, the technology would be the same and (I'm guessing here) carriers are required to take each others calls if necessary. This sharing of networks makes coverage much better.

      • barryotoole

        I agree with you. However, except for Europe (I think), most of the world operates on both GSM and CDMA standards, eg the 3 largest asian countries: India, China and Japan.

      • Xavier Itzmann

        Oh, OK, so the single reg decision was not to legislate the standard, like the Europeans and the Japanese did.

        And I do see Horace's point as to how this makes for some pretty expensive networks, particularly on a country with such large landmass. Arguably, a central planning decision would have cut the national tower cost.

        But if we had central planning, Euro-style, would we have invented iPhone and Android?

        And also: could a European in 2005 travel 6,500 kms without incurring roaming charges (Miami FL to Anchorage AK). Probably not; so you see, it is difficult to automatically assume that European dirigiste government planning that apparently works for some items in Europe would also work in the U.S.

      • asymco

        It's not about central planning. The European decision was to have a single standard. The standard itself was left to the industry to devise and agree upon. I don't suggest it's always the right thing to do but in this case, the ruling led to the current situation.

      • David

        There is a vast universe between setting a standard and creating the Soviet Union, Xavier. You do realize that we use on TV standard, for example?

        And both the iPhone and Android use phones running ARM, which is not an American company.

      • kizedek

        Another example of a standard regulated across Europe and most of the world is the voltage of electricity in our power sockets.

        A range from 210-240 seems to be pretty standard throughout the world, and most devices seem able to tolerate the minor differences and fluctuations. I can buy a device or appliance in any country in Europe and use it just about anywhere in the world with an adaptor that merely changes the shape of the prongs.

        Of course, this benefits the consumer / inhabitants / traveler, and allows greater competition between appliance manufacturers.

        I don't believe I could run the same appliance off the 110 US grid (anyone know?). It's only been relatively recently that companies like Apple have supplied universal adaptors that convert AC from 110 all the way up to 240 to DC. I can remember the days when American visitors routinely blew up their appliances or we had to borrow a transformer the size of a toaster that weighed 20 kilos and hummed louder than a sewing machine.

      • kizedek

        Another one is the metric system. I wish the US would hurry up and start educating its citizens about metric measurements so they can get used to them. Surely, it's inevitable? The UK seems to be halfway there: it does the weather in degrees C, and petrol is sold in liters and most foods have grams and milliliter measurements, even if they also show measurements in the old system. When I'm cooking, I get tired of converting cups and ounces to grams and milliliters — even if there are some great iPhone apps that do it.

      • We've never used 'cups' in the UK as a measurement that I know of and also be careful with USAians non-metric measurements as they aren't the same as UK non-metric measurements. eg. a UK pint is larger than a US pint.

      • Kizedek

        Yes, exactly. I was speaking of US recipes. That's right, you have to remember how many ounces in the relevant pint, 12 or 16 (I think).

      • kizedek

        Are you implying there are no domestic US roaming charges, nor any need to check various points in your mobile contract before you travel widely in the US?

        My parents once did some extensive travel in the US (involving both east and west coasts in the same trip). They borrowed the mobile phone of an aunt of mine in Atlanta, and they used the phone all over from there to CA. When they returned it there were several hundred dollars worth of charges to pay in addition to the normal cost of the calls themselves.

      • hetherjw

        "But if we had central planning, Euro-style, would we have invented iPhone and Android?"

        Yes, if only because, as stated in the article both products came from outside the phone world. The "central planning" of preventing an irrational wireless system is completely unrelated to the mobile OS market.

      • janet94

        Europe does NOT even believe that anymore.

        When Europe were planning to auction off 3G expansion band (2.6 GHz) in 2005, they ALL basically agreed to take a technology neutral stance. The reason? WCDMA wasn't that good, and the whole Europe wasn't going to all their eggs into the single basket (HSPDA) — so they crafted all their 3G expansion auctions to be technology neutral in order to hedge on the possibility of WiMAX being viable.

        In 2005, nobody knew whether WiMAX would be a success or not. If the bureaucrats knew, then they would have quit their low paying jobs as a bureaucrat and become internet start-up billionaires.

        The only irrational thing was "central planning" in a silicon valley start-up world — where you have maybe 1 out of 100 technologies being jackpots. If you central-plan, then you preclude the other 99 opportunities. That's why Europe doesn't even have single telecom standard anymore.

      • J Osborne

        "In Europe, the technology would be the same and (I'm guessing here) carriers are required to take each others calls if necessary."

        No legal requirement exists to handle each other's calls, however once they had built out networks and one carrier decides "we get complaints about calls in the black forest but it costs too much to put towers there" they can pay another company money to take the calls, or trade taking calls in some other area. In the USA for the most part that isn't an option unless they also change all of their cell towers and phones to match some other's technology.

        (AT&T and T-Mo can largely do that, and in NYC they have. Lots of very small US carriers are also GSM and could do that as well, but the larger carriers can't)

        However on the other side of the argument, in the USA we were free to explore real world uses of CDMA which can get more data per fixed chunk of bandwidth then the TDMA that GSM was based on. In fact largely because of the USA "experiments" with CDMA the newer GSM revisions has ditched TDMA and adopted CDMA (with a lot of the old GSM upper layer signaling remaining intact, and keeping things like the SIM card).

        There were also unsuccessful experiments, like AT&T's old IS-96 (I think) network which was largely a TDMA GSM-like network with nothing that really made it any better then GSM so the higher equipment cost killed it.

        So I wouldn't say we got nothing out of not having a single mandated cell phone standard, but we did give some things up.

  • jaquin

    Good overview of how we got to where we are. It does beg the question (for future of networking/NFC/Electric car charging) of wether regulators made a good decision, re no single wireless standard or wether "the market" through balkanization has led to this crossroads where we can reasonably say that the networks have wasted investor monies trying to scale the same mountain.

    • unhinged

      I suspect that there is an urge in US companies to achieve monopoly status – or, at least, that urge is stronger in the US. If you get 90% of the subscribers, does it matter that the various other technologies are incompatible?

      With such a big reward seemingly available, the risk of spending huge amounts of money that might be wasted does not get the level of attention that might otherwise be applied.

      What surprises me is that the inefficiencies of a small number of competing standards don't usually restrict the adoption of technology: PAL vs NTSC broadcast formats did not slow down colour television, VHS or Betamax didn't constrain the growth of recording onto video cassettes, DVD "region" formats did not impact the adoption of video disks, MP3 vs QuickTime vs Real vs various MS formats had negligible impact on the rapid spread of digital audio files. Mobile telephony, and now mobile computing, is not slowing down just because there are different standards available.

      Still, as Horace has pointed out before, while there is rampaging growth available there is no point debating the merits or ultimate market share of a particular technology – only once the market reaches saturation does that set of arguments become valid. So it's not until everyone in the US has at least one mobile phone that the telcos will start to look at promoting a single standard. I would be willing to bet that the ultimate standard will be a compromise of technological ideals to ensure that none of the parties involved is financially disadvantaged more than any other.

      This is what the US regulators fail to see, I think: that the greatest efficiencies are not achieved by letting every party do their own thing _on a large scale_ but by letting a lot of small-scale stuff happen, review the issues that are arising, work with the parties to find the best solution and then mandate that as the standard.

  • davel

    I am against the merger. For the simple reason that with four major carriers you have some semblance of competition. With 3 you will quickly go to 2. A duopoly is not good for consumers.

  • davel


    As always this is a great post. To elaborate on your point the balkanization of the spectrum is the cause for many issues here. I did not know that law mandated the incompatible spectrum allocation. I was under the impression that this was a simple logistical side effect of available spectrum and the bidding process.

    It would be nice if we had the forethought to create a homogeneous spectrum for compatibility but that is water under the bridge and probably cannot easily be corrected.

    My impression was that ATT had the most in common with Europe as far as spectrum. Is that not so?

  • Mike

    The lack of a single wireless standard in North America has been a burden for industry & consumers alike with one exception: Qualcomm. The "key regulation" referred to above has helped to deliver an ocean of "profit condensation" to Qualcomm shareholders over the last decade or so. Qualcomm fought and won an epic, life or death political battle to push the "key regulation" through Washington, DC.

    It is interesting to compare Qualcomm with the success of Apple and Android today. Neither Apple or Android seems to have needed much help from Washington to get to where they are now.

    • handleym

      While I am sympathetic to Horace's point, Qualcomm is an interesting point to consider.

      The Qualcomm claim is that they (and they alone, in the form of Irwin Jacobs) had the vision to understand how wideband CDMA was a match better match to a cell system than TDMA or FDMA. Pluckly little Qualcomm struggled to get this technology accepted, in the face of the obdurate stupidity of the rest of the industry — and reaped the rewards as it became clear that they were correct. Every 3G (and successor) cell system is now based on some form of CDMA. So, see, the system worked, and the chaos was necessary to prevent us being frozen into low-quality 2G systems forever.

      Is this story true? It strikes me as unlikely. There have been many many advances in wireless technology over the past 20 years, for example OFDM or the many different forms of diversity, that didn't require Qualcomm. Standards do freeze things for a while — but then new standards are developed that incorporate the new ideas and possibilities that have arisen since the old standard. Vide 802.11 b, then g, then n; or the evolution of 3G. The real issue is not that standardization is bad, but that SOME standardization schemes are a lot worse than others.
      (For example, the US has now locked itself into an MPEG2 720p/1080i world, and god knows how it will move beyond that. A MANDATE in the standard, that every TV have its core electronics on a small daughterboard that could easily be replaced, along with a DEFINITE COMMITMENT that the spec would be reviewed and updated every five years, depending on whether technology had advanced enough to justify an update, might have provided a way out.)

      The problem is, while the Qualcomm story is probably NOT true, it is easy to understand, and fits exactly with the prejudices of those who run US politics. So I don't see any rationalization in the future.

  • Ottawaman

    Great post, as always. Thanks Horace.

  • Fantastic insight and analysis, as always.

    It appears as though the US carriers decided long ago to compete and differentiate on the basis of infrastructure, a largely behind-the-scenes approach that customers generally don't care for. This became very expensive and in my experience, has led to an overall decline in service quality over the past decade. But let's give credit where credit is due — the carriers have developed a strong competency innovating in the billing arena. They've come up with all kinds of ways of locking in customers with multi-year contracts, a la carte options and early termination fees. If only they could apply that mentality to adding value to the customer experience instead of merely extracting it.

  • vinner57

    'Must read' – as usual.

  • Patrick

    In the year 1400 Europe was a backwater craphole. By 1800 it had essentially conquered the world (not necessarily militarily, but culturally and politically).

    This dramatic rise was due to, not in spite of, the fractured, disunified, wasteful split into separate countries, languages, and religions. It seems counter-intuitive, but the lack of a central authority forced each group to strive to succeed. Horribly inefficient, but ultimately successful.

    Similarly, but on a much smaller scale, the fractured, disunified, wasteful split of the US cellular market forces each company to conquer or die.

    • TheOtherGeoff

      and/or conform to a unified [business] economic stds and protocols [e.g: GMT, English, US Dollar, metric measures].

      The question will be can Apple disintermediate the 'pipes' and become the 'service provider' for communications connectivity (ie: When I am able to download the 'carrier app' and do an 'in-app' purchase of 6 months of voice and data for $60/month, and also buy a month of Verizon voice for $29.99 a month [I'm travelling to San Fran, and want better voice service] and my phone app manages who has the better connection or my needs (data from ATT, voice from VZN in San Fran)… then I think we will be where we all want to be).

    • handleym

      This dramatic rise was due to, not in spite of, the fractured, disunified, wasteful split into separate countries, languages, and religions. It seems counter-intuitive, but the lack of a central authority forced each group to strive to succeed. Horribly inefficient, but ultimately successful.

      This is far from clear, Patrick, and you're doing yourself no favors by assuming that the question is settled.
      The list of explanations for why the West triumphed over everyone else is as long as a phonebook, and many of the explanations have superficial plausibility.
      To give just one simple example of the issues: Europe was not the only part of the world that was disunited. India went through cycles of unity and disunity, while South East Asia (and, while they are always forgotten, they had literacy, trade and commerce, imperial architecture) was never united and always looked much like Europe.

    • kizedek

      So, what happened between 300AD and 1400? And then again between 1400 and 1800AD?

      Up until circa 300 the region was not a backwater craphole since it was the Roman Empire.

      From about 1800 onwards, it was pretty much as we know it today.

      What was it like before during the dark ages and beyond? Much more fractured, dis-unified and wastefully split… do you know how many individual city states, fiefdoms, dukedoms, kingdoms, seats of power, absentee monarchs governing from afar there were during those times? Thousands. Do you know how many feuds and wars and campaigns there were between them all? It staggers belief.

      I'd say some consolidation has done a lot of good.

  • OpenMind

    "Once they will reach the perch of power, the industry will conform to them, not vice versa."

    I like to see how this process play out. As long as $599 phone and $199 phone must have same service plan, why consumer chooses $599 phone instead of $199 phone? Operators still have power, not vice versa.

  • Omar

    Very good read Horace, U.S. wireless. carriers have a long way to catch up with the rest of the world.

  • Nikolay Andreev

    This is such a great reading insight.

  • Tem

    So the problem is multifaceted.
    It is inefficient use of spectrum, archaic regulations and business strategy that is incompatible with the common good.
    Time for change. Seperate the towers from the services. Agree on 1 international standard, use the different spectrums to improve services and innovate, all from any device that utilizes an international computer communications standard, just a thought.

  • r.d

    ATT only exist because of US Government.
    without their help ATT is worthless.
    FISA should be called "Protect ATT Ass from lawsuits"
    ATT gave their entire customer db to the government to spy on
    including all their data.

    If US market had to compete on price then it would be competition.
    With T-mobile going away, the likelihood of Apple offering cheaper iphone
    goes away too. I guess Apple can sell it in India.

  • barryotoole

    Also because that was the only band left for them to buy!

  • r00tabega

    "Once they will reach the perch of power, the industry will conform to them, not vice versa."

    So what, pray tell will indicate reaching that perch?
    * Clearly Apple and Google, giant as they are, can't force disruptive new standardization on wireless protocols.
    * Would it take the purchase of a carrier (doubtful that either would do this)
    * A leapfrog technology which is quickly adopted by the new giants that makes carriers irrelevant?

    I fail to see Verizon or AT&Tmobile going away anytime soon, entrenched as they are in the industry. As long as the mobile devices need a data pipe, the pipe owners just get richer (esp. if there are fewer of them).

    • newtonrj

      What if the carrier pipes were not contractually & systemically locked to a handset? What if handsets could switch, at will, to other carrier pipes yet retain their phone number? Local Number Portability on steroids.

      If handsets could rate shop, frequency hop, and bandwidth maximize connection decisions in real-time, what would that do to the carrier hegemony then? -RJ

      • chano

        How about Apple's to introduce a multi-carrier compatible embedded SIM?
        Surely that is indicative of disruptive, consumer-centric thoughts at Apple?
        Take a look at:

      • That's not consumer-centric, that's Apple-centric. It would mean that Apple would control which carriers are available to a consumer instead of a consumer being able to select ANY carrier just by sticking a SIM in. I've got 3 or 4 SIMs from different carriers in the UK and Spain. What would happen if Apple got it's way would be that when I turn up in a new country, the iPhone with the programmable SIM would need to find a network connection, then I'd get to select from one of Apple's approved carriers and presumably iPhone/iPad specific tariffs.

        Today I just swap in a dirt cheap PAYG SIM bought from a kiosk in the airport.

        It would be a good idea if it supported BOTH normal SIMs and the new programmable sort but you just know that isn't going to be the way it works with Apple.

      • OpenMind

        Easy. Sell the exact same handset but $200 less or free, with caveat that you promise to stay with us for two years. Will you do it? Probably no for you geeks. But big yes to average Joe. Unless you outlaw all forms of contract.

  • 3G UMTS works on both according to and the C7 supports 3G UMTS on both too.

    The problem in the past is that most 3G phones were quad-band. Nokia added T-Mobile's 3G AWS band.

    • OpenMind

      Theoretically, yes. Practically, very few 3G baseband chipsets support both AWS and PCS band. To have worldwide phone, you may need pent-band.

  • Doktor Strangelove

    No competition you say? In the US, I can choose from 108 different mobile devices, but I only need one.

    I can choose from 6 different carriers in my area and that does not include Clear (wi-max) and cable wi-fi. (so call it 8), but I only need two – mobile and w-fi.

    On ARPU per capita income basis, the US has some of the least expensive voice and data services in the world. Look at ARPU per capita income ratios in Europe and Asia for some eye openers.

    Thank goodness US regulators are not telling its citizens and carriers what technologies to use, unlike the EU. In the US, CDMA, GSM, and iDen network technologies flourished and served their targeted segments very well. And as it turns out, CDMA was the better performing technology for feature phone and smartphone delivery. AT&T (GSM) has about the same number of cell sites as VZW (CDMA), yet scores poorly on call quality and drop calls (basic network measures). The entire world is adopting WCDMA for it next generation networks.

    The US military-industrial complex makes the technologies possible. It pays for the R&D labs (universities, business, military), to bring core technologies to life – first military applications, then public use. CDMA was developed by the military in 1940s and applied in combat in 60s and released for public use a couple of decades later. The US DARPA funded the development of the Internet to provide decentralized communication in case of nuclear attack. Computers and software were designed to handle complex nuclear and missile systems. US technology makes it to possible to export democracy via tomahawk missiles, which keeps the oil and Coca-Cola flowing. Heads-up display in your car you say, thank the USAF. The military-industrial complex is at the heart of technological innovation. No surprise; it’s been that way for seven decades.

    As for monopolies, duopolies, and tri-opolies, they are good for business; less competition means more profits for the oligarchy – so the super-class maintains control and power over its subclasses (children), like in OOP. It's the norm: one electricity provider per area; one or two cable providers area ; two cola drinks; three mega media conglomerates which control the majority of what the public reads and watches; one or two health insurers per state and the freedom to choose not having health insurance if you can’t pay for it; one football league; one baseball league, and soon… two mobile telephone providers (Sprint will not survive on its own). The reason why US football and baseball teams consistently win the National Football League and the World Series is because monopoly limits foreign teams from competing; it keeps profits at home, where it belongs. It’s what Nokia did not seem to understand or want to understand so it went to India: American football and Verizon are different, even though Vodafone owns 45% of Verizon Wireless and Deutsche Telecom own the majority of T-Mobile US. The US is different and full of surprise. So what.

    And you have not answered the question posed in your title header. What rout are you rambling about?

    • This isn't about competition. It's about standards. Having five separate incompatible networks is bad for the consumer because it pushes the power to the carriers and slows innovation. Just look at how Android gets neutered by the time it reaches Verizon or AT&T. IPhone tethering was available for over a year internationally before the US.

      • unhinged

        Have you never heard of satire?

      • I don't know why I totally missed it. You don't have to be an ass about it though.

  • janet94

    If the US is an island, then the US is Pangaea.

    Let me debunk the article in detail:

    (1) European regulators have been migrating all their major wireless auctions in the last 5 years to technology-neutral terms. That's right — Europeans are finally accepting that the FCC was right all along.

    (2) EC Commissioners have been talking about American style "bill and keep" mobile termination rate. They finally figured it out that it is GOOD for consumers to be charged for incoming calls. If $10 gets you 250 minutes in the US system and $10 gets you 100 minutes in the European system — when you average out for the entire population and you are getting 50-50 incoming/outgoing calls, Americans get cheaper per minute rate. They all know this is the long term solution for Europe, but idiots on the internet would have uproars over the end of free incoming calls.

    (3) Nobody told AT&T not to do a massive network build-out. It is their choice to put their money on subsidizing the iphone. It is the end user's choice to accept less than perfect network coverage. And guess what? The rest of the world ain't better with coverage either. You got massive consumer uprising in Vodafone Australia last month. And AT&T had the 3rd fastest 3G iphone speed in the world (according to survey). AT&T only looked bad because they are being compared to the super-network (Verizon). When compared with the rest of the world, AT&T's network ain't bad at all — better than a lot of countries with a single GSM standard.

    (4) Other countries don't have ETF's, let alone American style pro-rated ETF. It's easy for Europeans to switch carriers — only by "technology geek" point of view of switching SIM cards. But these geeks ignored the fact that they have to pay off the remaining part of the contract just to migrate to another carrier.

    (5) Other countries have even worst market share concentration. Japan's DoCoMo owns 50% of the Japanese mobile market. Korea's SK Telecom owns 50% of the Korean market. France has only 3 national carriers (the 4th license was only given out last year). German government has been protecting their partially government owned Deutsche Telekom. UK used to have the most competitive market in the G7 — but the Orange/T-Mobile UK merger gives them a bigger market share concentration than AT&T/T-Mobile USA merger.

    (6) Other countries regulators are penny-wise and dollar stupid. They know that the American system is better for the consumers (see number 2), but idiots on the internet kept talking about free incoming calls. So what do the regulators do? They give the end-users useless regulations — like in France where they banned iphone exclusivity. French consumers are screwed — not because there was an iphone exclusivity — they are screwed because there are only 3 national carriers in France and all three are French-controlled/owned. Open up the French market to a foreign carrier and give them a wireless license — that will be much better for the consumer.

    (7) Failure for Vodafone in the US? VZW is their best investment. If Vodafone had control of VZW, they would have screwed it up. T-Mobile USA's failure is that the German parent won't give them the money to bid for spectrum. Nothing to do with technology differences.

    The rest of the world is all migrating to American regulations. All the mobile phones are using American OS'es like iOS and Android. If US is an island, then it is Pangaea.

    • You haven't really debunked the article. The article's point is that having separate incompatible networks holds back the progress of innovation and concentrates the power to the carriers.

      Using low prices as the metric for what is good for the customer is fundamentally flawed. I would suggest looking at value. I can buy milk from China for half the price, but I'm not ready to go on a lead diet.

      • janet94

        All the progress of mobile innovation is in North America — the iphone, Android, the blackberry… Verizon is years ahead of Europe in LTE deployment.

        The single GSM standard in Europe held back innovation in Europe — you wind up with a couple of hundred million of 3G phones with video calling that nobody ever uses. Qualcomm was the only mobile technology that foresaw location based services a decade ago — hence every zero dollar feature phone in the US has A-GPS.

        How did it concentrate the powers to the carriers? The fact is that when Verizon Wireless lowered the price for their unlimited voice plan, AT&T Wireless had to lower their price within HOURS. That is the power of having a very competitive market.

        The geek attitude is fundamentally flawed. Europeans can't get out of contract without paying the remaining portion of their contract — rendering the technology ease of SIM card totally useless. What do you want? France — outlawing iphone exclusivity so that you can use the iphone on any carrier in France. The problem is that there are only 3 national carriers in France — you are screwed because plans from all 3 carriers are super expensive.

        The whole article is flawed. Nokia is dead. European regulators are all supporting American policies as their long term solution (but are too public shy to actually implement them in the near future because of potential uproars from "losing the free incoming calls"). Europeans can have their GSM purity while Americans enjoy super fast LTE.

        Where are these so-called "innovations" that you are talking about that Americans are supposedly missing?

      • JayJay

        Have you considered that the American carriers have the cash to build out LTE now because they've been fleecing customers all these years?

        I don't understand about incompatible technologies, but tell me something janet94. When you buy a TV, are you forced to sign a 2-year cable contract with Comcast? And if you decide that you don't like their cable packages, do Comcast make you pay a hefty sum to leave? And is it only possible to buy a television from Comcast, or DirectTV or one of the other cable providers? Is the latest Samsung HD/3D TV only available on DirectTV? Why do cellphones have contracts and exclusivity then? The two businesses are similar: operators have to provide you data over networks that are built at great expense. (I can play back the same arguments for computers and internet providers)

        The fact is that the suits at all the wireless companies have gotten used to their fat profits through unnatural means of doing businesses. You say charging for incoming calls is a good thing? 1. No other country in the world does it; they can't all be stupid. And if it was such a great idea, why don't landline companies do it too? 2. Text messaging costs $0 for carriers to provide; it comes through spare control channels. Why do carriers charge 20 cents for RECEIVING texts?! Is that not a pure money-grab?

        "Europeans can't get out of contract without paying the remaining portion of their contract" have you considered how ill-formed that argument is? When Europeans know that they can switch carriers, they don't buy locked phones. Therefore, no termination fees. Subsidies are evil. Contracts are evil.

        I'll tell you what innovations open standards promote: instead of building bigger and faster networks that they can charge more money for, carriers focus on quality of service, delivering value for money, more plans, more options, more devices, more applications for the consumer. LTE is about the only "innovation" that you have been able to point out, that has originated from the industry (when the research was done in some university or military lab, these guys are just building the networks). Have you ever seen, on a new phone, any carrier-produced apps that weren't crap? Have you ever seen a talk plan that costs less than $30 a month (yes it's possible)? Have you ever seen people free to use any phone they want, on any network they choose, and to be able to switch carriers if they aren't happy?(because of too many dropped calls, absurd billing etc.) Aren't these innovations as well? Aren't you insulting the paying customer when you say all this stuff isn't important?

        I have to wonder if you work as a PR person for one of the wireless companies. (Sorry, couldn't resist that)

      • onyxwave

        I just wanted to say JayJay that people ARE NOT FORCED to sign a 2-year contract. People only decide to sign a 2-year contract (except in the case of the iPhone, where you can ONLY PURCHASE it with a 2-year contract) so that they'll get the phone at the cheaper price. You can still to this very day buy a phone that's compatible on AT&T's network directly from the manufacturer or some other third party seller that's unlocked and use it on AT&T's network without signing a long term contract.

      • JayJay

        What you're saying is theoretically true, but practically not possible. Carriers don't offer you a cheaper plan when you buy your own phone. You pay the same price as everyone else, regardless of who provides the handset. For example, AT&T's basic voice plan (about 450 minutes a month) comes with a free cheapo phone and costs about $40 a month (the exact numbers are fuzzy). But if I were to buy my own phone, I would still be paying the same price (around $40) for service as someone who got their phone free from the company, even though ostensibly, the person under contract is under contract because he or she is paying off the price of the free cheapo phone. If I bought my own phone, I should have to pay less for service, but I can't. AT&T simply won't provide that option.

        So although a principled consumer would buy his or her own handset and accept paying higher prices than are fair, the practical consumer (basically everyone) would choose to take the subsidized or free phone, because it's cheaper. Why don't we force the carriers to give consumers who bring their own handsets, a price break on service, and then see what happens?

        And isn't this the kind of thing Microsoft got slapped down for back in the 90s? Forcing computer manufacturers to pay for a Windows license on every computer sold, regardless of whether the computer actually had Windows on it? The rational computer manufacturer would therefore only make Windows PCs, figuring, "if I'm paying for it, I might as well use it". And the courts found this to be anti-competitive. Only here, think mobile phone consumer instead of computer manufacturer. I don't have much sympathy for the likes of Dell Computer and Microsoft's other victims, but I have lots for ordinary guys like me who have to work with this abusive system

      • JayJay

        I'll tell you one more thing that would never have happened in Europe or Asia, because consumers have CHOICE.

        I bought a new smartphone about a month ago. I bought it online, direct from the manufacturer, unlocked. Since it needed a data plan to be activated, I called AT&T, figuring I would activate the $15 data plan for a month, activate the phone and then cancel it after the month was up. Since I'm always in a Wi-fi zone. I don't need a data plan.

        When I called AT&T customer service and told them I needed data for a month, and why I needed it, they told me I would be "automatically signed up for the data plan every month, because the system would detect that I have a smartphone".

        Why is it OK for AT&T to charge me money for something I don't need or use? So what if I have a smartphone? I'm not using their data network, it doesn't cost them more money to provide me voice service because I have a smartphone, I didn't buy the smartphone from them at a subsidized cost due to which I have to pay them back by taking an obligatory data plan. They only reason they could make that sort of ultimatum to me was because they knew I had no choice. I was locked into a 2-year contract for one of their crappy Nokia phones (which I replaced with my new unlocked smartphone) and would have to pay an arm and a leg to take my business somewhere else. HOW IS THIS GOOD FOR ANYONE EXCEPT AT&T?

        Fortunately the story has a happy ending. After 45 minutes of back and forth with the customer service manager, he conceded I didn't have to take it because of some rule that said that if the line was already active, I didn't have to sign up for the plan. But I should still keep an eye on my future bills in case I am "accidentally billed for data". Here's an innovation for you janet94: I buy my phone (at full price), then I select my carrier, and I get service immediately. And if I am dissatisfied, I take my money somewhere else. I could not give two hoots about LTE, and neither could 90% of other consumers. They would prefer 3G that works all the time with no call drops, than the next great marketing gimmick.

        I completely agree that American mobile companies that aren't wireless carriers are still the most innovative in the world. Apple, Google and Palm (now HP) have to be applauded for making gorgeous phones and software.

      • janet94

        The grass isn't greener on the other side.

        You don't have choice when you only have 3 carriers in France, or that DoCoMo owns 50% of the Japanese market, or SK Telecom owning 50% of the Korean market, or German government still owns a major stake in T-Mobile and they are protecting them…

        Ask a normal European — and they are on some sort of contract. They love it so much that the EU just banned 3 year contracts. And these people don't have ETF's, let alone pro-rated ETF's.

      • No, we don't have ETFs let alone pro-rated ETFs…

      • janet94

        Your so-called ETF is equal to the remaining portion of your contract — which is really neither early nor pro-rated.

        American pro-rated ETF is vastly a smaller amount of money than merely paying off the remaining portion of the contract.

      • I didn't say they were good value and they aren't the remaining term of the contract, they're usually the remaining term minus 3 months which IS early and IS pro-rated since it diminishes each month of your remaining contract.

        You said we didn't have them though, which is patently false.

      • janet94

        What you are showing is a website for a carrier that no longer really exist in the UK. How many people are lucky enough to have this so-called ETF that are really not that good in value anyway — 10 million people out of 300+ million in Europe.

        UK anti-trust and telecom regulators are completely useless — they just rubber-stamped the T-Mobile UK/Orange merger — which is larger in market share in the UK than AT&T/T-Mobile USA market share in the US. No force selling of excess subscribers, no taking back spectrum. Nothing.

      • Hey Janet.

        The three innovations that you mentioned – iPhone, Android & blackberry – are handset innovations, not carrier innovations. LTE is a carrier innovation, but that's a sustaining innovation. It's been in the works for a long time. Also, just because a country screws up their regulation of carriers doesn't mean that a single standard isn't more beneficial. When you are trying to innovate, it is important to concentrate your resources in improving the technology. Having separate networks standards means that your resources are diluted.

        So how do carriers wield their power? They can refuse to support certain phones or functions. Steve Jobs first approached Verizon about the iPhone but they turned it down. If AT&T hadn't taken the deal, we might not have an iPhone or Android today. You can use an iPhone on any GSM network, but you won't be able to use features like itemized voicemail if the carrier doesn't want to support it. AT&T refused to support iPhone tethering even though it was available internationally. You can only use Skype in the US over 3G if you have Verizon and only through certain phones.

        I'm sure both Google and Apple have other features in their pipeline that would blow you and I away. But they won't see the light of day until Verizon and AT&T decide to let them.

      • janet94

        The rise of the blackberry came about — because of limitations of SMS being only 140 characters and Americans don't want any of it. Location based services — which is the only 3G killer app — came about because Qualcomm had the foresight 10 years ago to put an A-GPS in every CDMA phone. You concentrate on GSM technology improvements — you end up with a couple of hundred million 3G phones with video calling that nobody ever uses. You end up with Nokia being obsolete.

        Europe NO LONGER believes in single technology standards — ALL of their major spectrum auctions are TECHNOLOGY NEUTRAL in the past 5 years. European regulators know that LONG TERM SOLUTION is to have American style "bill and keep" mobile termination rate — which charges for incoming calls.

        Horace's article is essentially naming a bunch of issues — that European regulators don't even believe in anymore. Then Horace made the conclusion that all the American innovations are a fluke.

        My conclusion actually makes sense. American policies worked for the last 10 years — leading to American innovations that are leading the world in mobile technology. American policies worked so well that European regulators had to abandon all their policies like single technology and free incoming calls.

      • Qualcomm stuck A-GPS in phones because of FCC regulations that required US phones to provide location information in 911 calls. We didn't have that requirement in Europe. That's why. Nothing to do with foresight.

      • janet94

        Qualcomm has been in the fleet management business a decade before E911 regulations.

      • Fleet management?

      • janet94

        Qualcomm has been in the fleet management business since 1988 — using satellites to help companies track where their trucks are.

      • And Racal have been doing military radio since the 1950s. Is that foresight too?

        Really, other than continued technological evolution, Racal's military radio systems and Qualcomms fleet management have very little to do with Google Maps running on an iPhone.

      • janet94

        But Racal never made the cross-over to the consumer mobile world.

        It has EVERYTHING to do with consumer mobile world — because in the US, it is the enterprise world that moves the market. Mobile broadband and blackberries were originally targeted to enterprise business road worriers.

        In the US, location-based services were targeted at enterprise business users tracking their trucks, then they trickled down to the consumer world.

      • "But Racal never made the cross-over to the consumer mobile world."

        You are kidding me right?

        Please look up the history of Racal, Racal Telecom, Racal Vodac and Vodafone and where they've come from.

      • janet94

        They sold Vodafone a long long time ago in 1991. Qualcomm already has a fleet management business since 1988.

      • Look, I used to live in Newbury UK where most of Racal and Vodafone were and still are based. I personally knew engineers working at both Racal and Vodafone. My sister still works for Vodafone.

        I'm sure both Racal, Vodafone and Qualcomm have had their share of innovations. Let's leave it at that.

      • janet94

        The point is that this ISN'T an sudden overnight success because Apple created the iPhone and then suddenly Europe crashed. From big transportation firms like Fedex having fleet management — then it trickled down to people driving cars from General Motors having "OnStar" head units, then it trickled down to handsets.

        The iPhone, however, is so high-profile that we can easily obtain verifications in English because there is always some website talking about the iphone in Sweden, or in Norway, or in Holland.

      • JayJay

        I would also object to location services being described as the "only 3G killer app". Apart from maps, I really can't think of a location based service on 3G which I would class as killer. It's hard to argue that without Yelp or Foursquare check ins my smartphone experience would be woefully incomplete or lacking; barely 10% of smartphone users (and I'm being generous there) even use them.

        On the other hand, full web browsers on mobile, apps that turn your phone into a Swiss Army knife of information (did you hear about the guy in Haiti who downloaded the first aid iPhone app and saved himself during the earthquake?) social networking, video and audio on the go are things that I would class as killer apps on 3G. And though location services are a nice touch on all of them, I would not class them as an essential component or "killer".

        Nokia is a handset manufacturer (primarily, though they make network equipment too). Their obsolescence in the phone market has absolutely nothing to do with wireless standards. The reasons for their decline are rather more complicated and have to do with design, understanding their market and a probably, complacency. Saying wireless standards led to Nokia's demise is like saying traffic rules led to the American car industry going to hell. There's simply no relation. The truth is that in both cases, they were outflanked by nimbler, faster, smarter, hungrier competitors who offered better products. Put Apple in Europe-style wireless regulations and they would still have made the iPhone.

      • janet94

        "Full" web browser is in the 4G world — basically next year — for phones with flash-enabled browsers. That is a decade later than 3G.

        No, you have it in reverse. It wasn't that the bureaucrats in Europe that were leading 3G standardization — it was Nokia and Ericsson that led the 3G standardization efforts. Nokia and Ericsson took the WHOLE European wireless industry down. They are too big to listen to the carriers — it's my way or the highway.

        Qualcomm — being a much smaller company, selling a non-world standard technology — actually has to listen to their customers. Carriers want more capacity — Qualcomm made newer voice codecs. Carriers want to sell apps under their control — Qualcomm created BREW, which 10 years later, even GSM carriers like AT&T finally decided it was a good idea. Carriers didn't care for video-calling, so Qualcomm didn't put it into the specs. Carriers didn't really care for having data and voice at the same time because 3G was basically used by enterprise road warriers — Qualcomm killed ev-dv.

        Qualcomm listened to their customers and made all the right decisions. Only now with 3G being end-of-life that people questions the no simultaneous voice and data.

      • I already have a full web browser on my 3G phone. I've had it since 2009. Firefox (then called Fennec) for the N900 with Flash enabled already. The 1.0 release was a few days ago for Android and updated for the N900.

        Arguably, Mobile Safari or Opera 11 are pretty 'full' also.

        Do you work for Qualcomm by any chance Janet?

      • janet94

        Don't work in the telecom INDUSTRY at all.

        Do you know why I kept on commenting on this thread? It is because there are plenty of verifiable information on the internet since the iphone was launched — which MOST of you people have ALREADY READ (because there are plenty of iphone geeks around), but ALL of you chose to ignore (or not connecting the dots).

        Wake up and take the red pill.

      • JayJay

        1. Who gives a damn about Flash? It should die, in my opinion (and no, I'm the furthest thing from an Apple fanboy)
        2. So in Europe the handset manufacturers called the shots and (according to you) the industry "went down". In the US the carriers are calling the shots and (according to me) are fleecing the consumers with their anti-competitive practices. So maybe no one in the industry should be making standardization decisions, eh?
        3. While we're on 4G, no US carrier is actually offering real 4G (classed as 100 Mb/s download speeds for fast-moving devices, like in cars, and 1 Gb/s for stationary devices). It's more a marketing term for saying "faster than 3G". And I still don't care about voice and data at the same time. Which CDMA can't provide anyway (and it can't provide 4G either). And actually, because this argument has been split over many many days, I'm struggling to see Qualcomm's connection to this whole affair now. They were prescient because they didn't put video calling into the CDMA spec but put in A-GPS? So…what? All new smartphones have real GPS. And suddenly everyone's jumping back onto the video calling bandwagon.

      • janet94

        The American market is the MOST competitive market in the G7.

        Go live in France where all 3 national carriers are French-controlled and all 3 were fined hundred of millions of dollars for price fixing in 2008. Go live in Canada where I live and face 3 year contracts and $720 ETF (and one of the most idiotic original iphone plans in the world). Go live in Japan where there are only 3 national carriers, with the Japanese government is the biggest shareholder of NTT DoCoMo (and with DoCoMo having a 50% market share in Japan). Go live in Germany where the German government is the largest shareholder of DT/T-Mobile and the German government is constantly babying their carrrier (against the consumers' interest). Go live in UK where their anti-trust regulator didn't impose a single thing on the Orange/T-Mobile UK merger — which created a top carrier with a market share that is even bigger than AT&T/T-Mobile together.

        I just named 6 out of the G7 countries. I don't know Italy enough to make a comment.

        You, as an American, don't know how lucky you are.

      • The iPhone exists BECAUSE of Europe-style wireless regulations. Can you imagine them doing it if they couldn't just produce one GSM compatible model?

      • janet94

        Except that Apple went to Verizon FIRST.

      • janet94

        With respect to Skype, European mobile carriers have been blocking VoIP traffics forever.

        The grass is not greener on the other side.

      • That was 2007.

        On the other hand, you're free to move to use Skype on another carrier such as Three in the UK who don't even charge for Skype. You don't even have to be in credit with them.

      • janet94

        Sure that was 2007.

        While the American carriers have been talking about merely prioritizing certain data on the network, European carriers have been outright blocking these voip data for 4-5 years now — with the full blessing of the European regulators.

      • You've extrapolated Vodafone being shitty to N95 users in 2007 to the entire European mobile industry and blamed the regulators?

        I've got an N900 on Vodafone. It works perfectly with VoIP and Skype on Vodafone. It even does Skype video calls. My C7 on Three does Skype fine too, and SIPgate pure SIP VoIP. My E71 did 2 years ago. So did the cheesy Pirelli DP-L10 I had 4 years ago on Orange and Vodafone. Great little VoIP phone for about £40 unlocked btw although about 1 hour talktime was nuts.

        Really, I don't know where you're getting your information from but it's just plain wrong.

        The telecom companies EVERYWHERE get shitty in numerous ways. That's the nature of the beast it seems. AT&T taking ages to enable tethering for instance or even all of the US carriers requiring extra cash for tethering at all. Here we have so-called 'Unlimited' plans being anything but.

        You also have Apple capitulating to AT&T's demands like not enabling VoIP or Video over 3G at all.

        Occasionally I've come across carriers here in the UK that uninstall Nokia's VoIP software but at least Nokia stick it on their website to download for free. 🙂

      • janet94

        The ENTIRE European mobile carrier industry has been either blocking VoIP traffic or openly talking about blocking it —- since 2005.

        AT&T ain't even the first carrier to charge for iphone tethering (mind you they disallowed tethering for a long time). But plenty of other overseas carriers have been charging iphone tethering — years before AT&T did. I don't see it as anything to do with regulatory issues.

        You will NEVER see any American carrier to openly discuss OUTRIGHT BLOCKING data traffic.

        The emperor has no clothes in Europe. All you have is France outlawing iphone exclusivity — which does NOTHING for consumers when there are ONLY 3 national carriers. ALL 3 French carriers were fine hundreds of millions of euros for price fixing in 2008. And French mobile operators were openly talking about blocking voip calls in 2005. Well for the geeks, all that matters is that they can buy an unlock iphone in France.

      • I've been using VoIP on mobile phones for over 5 years now. Vodafone isn't the ENTIRE European mobile carrier industry. As I pointed out elsewhere, Three UK even do Skype entirely FREE. You've only got to have a Three SIM. The market has changed a lot since 2005/2007.

        Charging for tethering in Europe is largely non-existent. There's always T&Cs that say you can't but it's rarely enforced. It wasn't until the iPhone in fact that carriers really started worrying about it and Apple gave them a method of restricting it. I've been tethering phones without charge since 1997 when I used an Ericsson (pre Sony merger) mobile phone tethered by cable to my Psion 3a organiser. It had a 9600 baud modem built in the phone.

        "You will NEVER see any American carrier to openly discuss OUTRIGHT BLOCKING data traffic. "

        No, they'll just do it anyway until found out…

        I'm sure they use traffic shaping and didn't Verizon have some daft walled garden restricting sites you could use during the WAP years?

      • janet94

        Europe is basically dominated economcially and numerically by 3 countries: UK, France and Germany — with regulators in France and Germany turning a blind eye to mobile voip blocking for half a decade. These are NOT small countries — France and Germany is 140 million people combined.

        See that's the problem with your line of argument: that they are not "enforced". You believe everything is fine in Europe because they are not enforcing the rules. Big disappointments come from that — when Brits found out that suddenly carriers enforced their no giving of unlocking codes.

        They are not enforcing certain rules because the UK market was very competitive. BUT with the T-Mobile UK/Orange merger — that is NO LONGER true. T-Mobile UK/Orange is even bigger in market share in the UK than AT&T/T-Mobile USA in the US.

        And AT&T never discussed it openly about banning voip traffic. That's the BIG difference. AT&T knew that the FCC would have problems with it, so they did it secretly. And as soon as the FCC found out about it, AT&T immediately stop.

        That's a BIG difference when compared to Europe — where European carriers openly discussing it, AND European regulators did not even attempt to do anything about it. EC Commissioner last month just said it like this — well, if your mobile carrier block mobile voip traffic, then just move to another carrier.

      • I've yet to come across a British carrier that will not unlock a phone so where is this big disappointment?

        You're correct though in the FCC have more clout than Ofcomm in the UK who are spineless. The EC Commissioner is also correct though, just move carriers. Simple to do when every carrier uses the same standard.

      • janet94

        For a brief couple of years in 2007-2009, O2 didn't unlock the iphone and Vodafone didn't unlock the blackberry.

      • That would be because they had exclusive contracts in place with Apple.

        When those contracts were up, they allowed unlocking. Nothing to do with EC regulations, everything to do with Apple.

      • janet94

        Hong Kong had a exclusive iphone carrier and the Hong Kong laws allow simlocking of phones — yet that particular Hong Kong carrier sold their iphone completely unlocked.

        Nothing to do with Apple, it was O2's decision.

      • janet94

        EC Commissioners are idiots — move to where? The market share concentration in Europe is lot higher than in the US. And all you showed me is a so-called not really cost-effective ETF for a small UK carrier that technically doesn't exist anymore (and whose management is effectively controlled by Orange, not by t-mobile side of people). The rest of the other 290 million people aren't even lucky enought for that.

      • I have a choice of 4 carriers and a dozen or so MVNOs. Plenty of choice.

      • janet94

        But you HAD 5 carriers before and Superman Li is forcing a war price so that some competitor would buy him out.

      • It depends on the carrier and country but the contract often means nothing more than a credit agreement in order to subsidise buying your phone. Many countries in Europe do not allow phones to be locked to a carrier. In those that do, there's a booming black market in 'unlocking'. If you've come to the end of your contract then unlocking is usually free or very cheap.

        If you've got an unlocked phone then being able to swap in SIMs is far from totally useless.

        LTE isn't happening in Europe largely because there is no space in the spectrum for it and we're already refarming out 2G frequencies such as 900Mhz for improved HSPA+ which is getting 30% faster speeds on EXISTING hardware like the iPhone, so there's not really the need yet.

      • janet94

        The iPhone's launch in Europe has totally discredited the effectiveness of these so-called simlocking laws in Europe. Brits were so SURE that Apple must give them the unlocking codes to the iphone. Guess what? Didn't happen.

        Booming black market also affects the pricing of genuine goods. VAT tax frauds are in the billions of dollars a year in Europe. You are getting cheaper handsets because these shops got their phones from distributors who got them from somewhere else… blah blah blah. The shops can sell legit phones at a cheaper price because the whole industry benefited somewhat from the VAT tax frauds.

        All the 3G expansion band auctions in Europe 3-4 years ago were all technology neutral auctions. Carriers in Europe can put in anything they want: HSPA+, LTE and even WiMAX.

      • You just phone your carrier up to unlock an iPhone. It's easy. Really. It is.

        No idea what you're going on about VAT fraud and unlocking a phone you've bought legit already. I was talking about just taking a locked phone to the bloke in the non-mainstream network shop and getting it unlocked for 20 quid or so. Some of the mainstream shops even sell unlocked phones as standard. eg. Carphone Warehouse

        LTE in the UK will be limited to 800Mhz and 2.6Ghz, both of which are currently occupied. The auction for those is mid 2011 after analogue TV is switched off. Previous bands were for 2G and 3G only. Ofcomm in the UK has only just allowed O2 to re-use 900Mhz (a 2G band) for 3G. It varies country to country depending on who has free spectrum space in Europe. We're not a homogenous lump.

      • janet94

        UK carriers (where you live) aren't legally required to give you unlocking codes. Nothing to do with regulatory issues.

        VAT carousel fraud.

        The fact is that is maybe $20 billion US a year JUST for UK alone — mostly in mobile phones and computers. It is a "cross-subsidy" — you are getting cheap "legit" phones from mom and pop store — precisely the entire industry is getting money on the side.

        It is ACROSS THE BOARD in Europe that European regulators (including UK) have decided to auction 3G expansion band in a technology neutral manner.

        NOBODY believes in single mobile technology in Europe anymore.

      • "UK carriers (where you live) aren't legally required to give you unlocking codes. Nothing to do with regulatory issues. "

        I didn't say it was but I've yet to come across a UK carrier that will not unlock a phone.

        I'm not sure where you're going with your VAT fraud strawman. I was talking about unlocking a legitimately bought phone which you can either do with your carrier or any non-carrier affiliated high street shop if the carrier doesn't play ball. It's perfectly legal to do so in the UK.

        Your lightreading link backs up what I said, LTE is waiting for spectrum space in much of Europe and the existing 3G bands won't be used for it.

        Really, what's your point? That a common standard has stymied freedom and innovation? I'm not seeing it.

      • janet94

        For a long time, Brits didn't get unlocking codes for the iphone from O2 and for the blackberries from Vodafone.

        They are re-farming the 2G spectrum on technology neutral terms. By the very fact that their original 2G spectrum had a GSM-only term attached slowed down LTE deployment in Europe. American carriers don't need the government to re-farm their analog and 2G spectrum in order for them to deploy 3G and LTE. American carriers just use whatever spectrum they have in whatever technology they want.

      • "For a long time, Brits didn't get unlocking codes for the iphone from O2 and for the blackberries from Vodafone."

        O2 unlock all iPhones at the end of the contract like anyone else. That was a function of the exclusive deal they had with Apple.

        I wouldn't know about blackberries – largely kids toys here in the uk now.

      • janet94

        It has NOTHING to do with exclusivity deal. Hong Kong — FROM DAY ONE — had an iphone exclusivity carrier, yet that particular carrier has been selling unlocked iphone from the beginning.

      • That's because there is a law in Hong Kong that prohibits locking of phones.

      • janet94

        There is NO such law in Hong Kong.

        The regulation in Hong Kong only said that the carriers can't simlock SOLELY to tie the customer to the network — then the law promptly enumerated a bunch of circumstances where the carriers can simlock the handset.

    • OpenMind

      Where is debunk of debunk? I like to hear from you. I think @janet94 has a valid point.

  • moeskido

    What good is better coverage if the only available service plans from the only available carrier in your locality are egregiously priced?

    I understand that Comcast's cable lines serve broadband ISP customers in my area, but I'm damned glad Verizon DSL's available here, too. If one of those ceded the territory, where would the pressure to increase efficiency and lower prices come from?

    Deregulation is great for business in the short term. In the long term, it allows short-term-managed businesses to hang themselves and stagnate entire markets. And it's lousy for customers throughout.

    • Joe_Winfield_IL

      I agree that competition is good and necessary. I'm not generally a fan of over-consolidation. I would argue though that the combined AT&T is not going to be a sole provider in any of its markets. Verizon is completely nationwide, and will view the merger as an opportunity to pluck off dissatisfied AT&T/T-Mobile customers during the merger process. When the dust settles, Verizon may only be 10-15% smaller than AT&T, even without any acquisitions of its own. Also, AT&T is the worst provider today, and their 90 million customers' service will benefit dramatically the day this deal closes.

      In addition to Sprint and all the small regional players, there is also a major new independent 4G network being built for the wholesale market. I'd love to see Horace do a piece on Lightsquared, as its model is truly unique. Essentially, it is a network for hire. Lightsquared is a combination of traditional infrastructure and satellite-based communication. Rather than compete with AT&T and Verizon, they aim to lease spectrum to the big guys. They will also offer MVNO-like service to any interested parties, paving the way for Apple and Google to sell network service directly. This is certainly very good for consumers, and will put downward pressure on carrier pricing if it is effective.

      • kizedek

        Selling Network service directly is something which we already have and appreciate in the Netherlands and UK (two places I can speak of through experience). We can get competitively priced mobile plans or pay-as-you-go cards from any number of "carriers" — including Tescos (a supermarket chain) in the UK, and Hema (a low-end department store) in the Netherlands.

      • Joe_Winfield_IL

        Do Tesco and Hema actually "provide" the connection, or are they selling carriers' own branded prepaid cards? In the US, the latter is common but not the former.

      • Tesco operate as an MVNO on O2's network. They're cheaper than O2 usually.

      • Joe_Winfield_IL

        In that case, Lightsquared is unique. O2 is a competitor to its own MVNOs, and this is also common in the US. Sprint actually owns a few former MVNOs and continues to operate them under their former namesakes.

        Lightsquared will be exclusively wholesale. Their name and their service will be completely invisible to the consuming public. Their whole goal is to act as a "dumb pipe," and they are betting that their lack of legacy costs will allow them to sell a lot of bandwidth at rock-bottom rates.

    • Joe_Winfield_IL

      Also, in your specific scenario, you are talking about exactly two ISP options. With only one credible competitor, Comcast is kept in check. Of course more would be better, but one is often enough.

      Would you rather have Comcast and Verizon both offer subpar internet connections if it meant allowing two more competitors? Personally, I want my internet always on, always fast. Monopolies are bad news, but fiercely competitive duopolies are better than a hodgepodge of mediocrity.

      • moeskido

        You're ascribing monochromatic economic theory to real-world situations that are far more variable. When you examine either provider's ability to influence legislators, their levels of customer service, and willingness to comply with overly intrusive national security queries, saying Comcast is "kept in check" makes me think of abused wives who are happy because they haven't been hurt today.

        Do you allow for the possibility of cartel-like behavior within a duopoly, or are we pretending that trade associations don't exist? And where is the correlation between wider market participation and poorer connections? Is that a textbook truism for this sector?

      • Joe_Winfield_IL

        I'm not trying to ascribe theory at all. I'm replying to your specific, concrete example of Comcast and Verizon…"If one of those ceded the territory, where would the pressure to increase efficiency and lower prices come from?" There are only two providers, yet you are pleased with the competition. Do you honestly fear that either AT&T or Verizon will ever cede the national wireless market to the other? Is this a realistic assumption?

        Also, this thread is already taking a huge hypothetical leap by assuming a duopoly. Today there are four major national providers, not three. Verizon has said in no uncertain terms that they are not interested in buying Sprint. There are many regional providers with their own networks, and Sprint serves as MVNO for many million additional subscribers on asset-light networks.

      • moeskido

        I should have been more clear. I'm less displeased with my region's duopoly than I would be if I had only one provider to choose from. I still find much of the two players' offerings more restrictive and expensive than they need to be.

        Yes, there are four national providers, but I think it's too easy to discuss this sector in national terms without taking into account its very variable situations from region to region.

      • Joe_Winfield_IL

        It's obvious we just take opposite positions on the issue of a merger. I'm happy to discuss this further if you'd like, or we could just agree to disagree. If you want to go on, here's my next volley:

        I think the regional level is actually how AT&T will justify the acquisition. Nationally there are only a few major brands, but regionally there are many. I live in Chicago, where US Cellular is on equal footing with the "Big 4." Metro PCS and Cricket are both growing rapidly in their own markets despite the national carriers. The prepaid carriers like Tracfone are another option.

        Unlike your home service, operators don't need to run a physical wire to every address. This creates significantly lower barriers to entry than home broadband. In the residential broadband market, 4G coverage will quickly put Comcast on their toes. The AT&T merger will create a separate viable option for you once their LTE is up and running, along with Verizon's LTE competing with their own DSL. There is a third high speed data choice in many markets with Clearwire's WiMax 4G. Lightsquared is yet another option that will soon launch.

        Of course none of the regional players will be nearly as robust as AT&T and Verizon, but for many users, low cost trumps the convenience of blanket coverage throughout the country. I have plenty of friends that never travel, and for them there is no advantage to Verizon's 3G coverage, let alone AT&T's international GSM standard.

      • moeskido

        I'm happy to agree to disagree. You're examining this field far more comprehensively/macro than I am. My concerns are based, in part, in the fact that I've been unemployed for over a year and consider my personal options for carrier services more limited than they were in 2009. News of unimpaired mergers often feels like a noose around my neck.

        I hope your conclusions are correct.

      • Joe_Winfield_IL

        Sorry to hear about your employment situation. My wife just got laid off a few weeks ago, and already it is wearing us down. I hope we aren't still in the same situation in a year, but it's hard to be too optimistic.

      • moeskido

        And there we are in complete agreement. Wishing you both better circumstances.

  • moeskido

    Horace, I hope your last paragraph here proves prophetic and not ironic. I see Android complying with carrier practices far more than IOS.

  • ThereisHope


    You hit the issue on the head better than any article I have read in a long time.
    The picture in the US has been so confused by smoke and mirrors that very few people understand.
    The current situation has been 20 years in the making. One needs 100 pages to list the little details that steered the US into the Galapagos in Wireless.

    I will throw questions that point deeper towards the root:
    1. Why CDMA and EVDO in US vs UMTS and HSPA in most of the world? Fight for revenue and global control. Yet, When GSM was a clear success in Europe the US decided to upset. Yet, nobody followed. Result is that 15 years down the road Verizon is squeezed in the corner.
    2. Why are there only a handful, if at all, successful wireless startups? Providers still control the universe of wireless. And OMG, they are conservative. The industry needed a gorilla to come from the outside to rattle their feuds. We should all thank Apple for propelling us from the stone age of clunky "feature phones" (what a ridiculous term) to the real mobile internet that we could have delivered 10 years ago. But it took a real company that had the "right stuff" to do it.
    3. FCC regulations have appeared obsolete for at least 10 years. Without outside pressure, auctioning spectrum to the big players will still create byzantine empires. Rock the boat and question the basics: what is the benefit (to the people who pay the monthly contract) of a spectrum auction? Why give spectrum to a player who will only provide service and capacity where he likes (frenzied metro markets) at the terms he likes (bloatware). Instead, establish minimum performance and co-existence rules. Current FCC rules are tuned for oligopolies and keeping them profitable. FCC works in accord with oligopolies. We have not established yet the notion that spectrum is a public resource. We have only given the right to a few companies to make profit off the resource.

    It will take another gorilla to show up in the party.

    • janet94

      Nokia vs. Qualcomm — Qualcomm won and became Quadroid with Android. UMTS brought the world — video calling that nobody ever uses. Qualcomm brought us — location based services a decade ago, which remains the only 3G killer app.

      Verizon is YEARS ahead of Europe in LTE deployment.

      EVERY single mobile innovation right now is from North America — blackberry, iphone, android, location based services.

      Which side are you on? Single technology standard — means zero wireless startups.

      All European regulators have copied American policies. Go to Ireland and Sweden, nobody talked about their disaster of 3G beauty contest anymore — they migrated to auctions. Long term European position is to migrate to American style "bill and keep" mobile termination rate — which charges for incoming calls.

      You want oligopolies. Japan's Docomo owns 50% of the Japanese market. Korea's SK telecom owns 50% of the Korean market. T-Mobile (which is partially owned by the German government) owns high 38-40% of the German market. Orange/T-Mobile UK owns 42% of the UK market. France has only 3 national carriers.

      • wts

        On December 14, 2009, the world's first publicly available LTE service was opened by TeliaSonera
        On December 5, 2010, Verizon Wireless launched its 4G LTE network

        Verizon YEARS ahead??

        Another strange thing for me is this american obsession on dropped calls. In the last 10 years I have had maybe 5 dropped calls (excpet while going by car in valleys/mountains).

      • janet94

        LTE is available in a few selected cities in the Nordic countries. That's it. When you cover the capital city of one of these Nordic countries, you cover 1/4 to 1/3 of their countries population. And these are smallish capital cities — 1-2 million people. Not that much to brag about.

        American obsession on dropped calls is a good thing. It means that carriers are competing on service. It also mean that AT&T — while they look really weak in the US when compared to Verizon Wireless — are actually pretty solid when compared to the rest of the world. That's how 3g iphone speed survey came up with AT&T being the third fastest in the world.

        Imagine that — AT&T being laughed at in the US being a bad carrier, is actually better than some of these national GSM champions.

      • Huh? I've had GSM cell based location info for over a decade, way before we had GPS in phones.

      • janet94

        In your dreams.

      • No, in my Nokia. The old flippy one that came out at about the same time as The Matrix and had a WAP browser built in. 1999-ish. That used to have locally relevant information based on cell tower triangulation. The SE T610 I had after that did also.

        It was obviously quite a few years before maps and foursquare.

      • janet94
      • Well, there we go. My old T610 came with a 'Vodafone Live' service which gave me local updates like what was on at the cinema nearby.

      • raphael

        It's actually not a phone feature but a network feature, it works with any handset on the GSM/UMTS network but precision vary with tower density in your area. It's only really useful in dense urban areas.

  • davel

    This assumes that the rational company will want to compete for the customer. But with only 2 national carriers what is the motivation to compete? The two companies can implicitly agree not to spend billions a year to try and steal the incremental customer from each other. Instead they can continually increase prices and only invest enough to maintain the current infrastructure. Their profits and margins go up and they keep the 100 odd million customers each. They would not be compelled to compete for handsets. They would not have to subsidize phones. They can just sit back and collect the money for their shareholders.

    TMobile in order to compete with the other 3 had the lowest priced pay as you go plans. I am sure this put a floor on pricing as customers would migrate to a lower cost carrier that gave good enough service. Sprint has huge financial issues and they still have not integrated the nextel infrastructure into their network so they get the synergies they were supposed to get.

  • Jordan Hare

    You can also view the balkanized landscape as a function of the close relationships between regulators and mass-networked technology providers. There's a long history of this, perhaps best described in Tim Wu's terrific book "The Master Switch".

    Somewhat surprised Horace didn't drop in a mention, actually …

    • janet94

      Tim Wu changed his mind — Apple is THE enemy to net neutrality.

      • kizedek

        How? Are you changing the frame of the debate over net neutrality? Usually, it refers to differentiating between content that users can access and download over the internet, maybe restricting or throttling data from certain sources. Typically that is done by the ISP, because you are locked into the terms of provision governing access at your current location.

        Just because Apple may approve or not approve certain apps in its store does not mean they are entertaining any thought about restricting internet access through the browser or web apps. And if the rumor is that Apple can use a brokering SIM that switches between carriers dynamically, that can only be a good thing, right?

        Do you mean, because Comcast et al are running scared and thinking about tiers and throttling as a direct result of all the new innovations that iApp developers come up with to connect iDevices to their innovative webapps and interesting new online services (invoicing and bookkeeping, crm, social, budgeting, note taking, etc. just to name a couple — check out for example)?

        Because VOIP and FaceTime begins to replace regular old metered phone calls?

        Because Comast et al have the money and power and influence to frame the debate and tell us what "net neutrality" actually means?

        Because carriers and ISPs don't like the idea of being "dumb pipes", but they can see the writing on the wall as they witness how consumers actually enjoy using a particularly usable and revolutionary product (after revolutionary product) that they can't control?


      • janet94

        I wasn't really trying to change the debate — only trying to illustrate that American carriers aren't all that powerful.

        The fact is that the AT&T/T-Mobile USA merger would create a carrier with a SMALLER market share than the Orange/T-Mobile UK merger last year in the UK. The anti-trust regulator and the telecom regulator in the UK did NOTHING to stop that merger — citing that all the other countries in Europe have a top carrier with a market share in the low 40's percentage.

        And combined with the fact that the top carrier in Japan owns 50% of the Japanese market and the top carrier in Korea owns 50% of the Korean market — do you see that it is absurd to think that the grass is greener on the other side of the ocean.

  • Simon Hibbs

    To be fair, the US has geographic issues that Europe doesn't. It's a much bigger landmass with a more diffuse population which inevitable increases the cost of complete geographic coverage to prohibitive levels.

    Still, the point about consumer choice is true. In theory you have more choice in the US (ATT GSM, versus Verizon CDMA, versus T-Mobile 'special' GSM, etc) however once you have made that choice and bought your handset you are then completely locked in to that choice. Want to move that ATT GSM phone across to Verizon or T-Mobile when your contract expires? Tough! The only choice you have is which flavour of lock-in you want to be shackled by.

    Simon Hibbs

    • janet94

      In theory, they can move around in Europe because they all use SIM cards. In practice, they can't move in Europe because they don't have pro-rated ETF's. Nobody ever pays a thousand dollars to get out of a mobile contract in real life.

      In the US, you can get out of contract by paying pro-rated ETF, sign another contract with a new carrier and they give you a free phone. Don't need to worry about technology incompatibility of old phones.

      • Kizedek

        That's why we had to be allowed to buy an unlocked iPhone if we wanted one. When people choose the device they want, buy it, and have the ability to shop around for service providers because the technology is standardised, then carriers are going to have to work on serving their customers in order to be competitive.

      • janet94

        Normal people (excluding geeks) would prefer the American system where they look for the service and coverage that they want.

        It is AT&T's choice not to spend their money on network infrastructure. It is Verizon's choice not to bend over and over-subsidize the iphone.

        The FCC should NOT be formulating their policies so that the 1-2% of the population can buy an unlocked iphone.

      • Yeah, right. In Europe we want carriers with networks that are incompatible with other carriers or the rest of the world just like in the USA. That would be peachy.

        It barely makes any difference in Europe which carrier you choose. They've largely got exactly the same coverage (ie. good everywhere) and they all use the same technology. It almost always comes down to who has the phone model you want in stock and what deal they'll cut you on minutes/texts/MB. They're dumb pipes here.

      • janet94

        What good is compatible technology when a Vodafone UK customers getting raped with roaming fees when he uses his mobile phone on Vodafone Germany's network — especially when Vodafone UK has no legal requirement under Ofcom to give you an unlocking code.

        European networks are weak, not strong. Europeans never know how bad it is because they never spend much time talking on the phone. This is like "sunday drivers" who never know how bad their driving is.

      • Do you live in Europe? @aegisdesign does and he knows a shit load about mobile tech. He's the resident Nokia expert.

      • janet94

        How many UK telecom "experts" you have encountered that correctly posted on the internet that UK no longer has a "must give unlocking code" regulation — for close to a decade?

        Nokia is obsolete. EVERYTHING that company stands for is obsolete.

      • The compatible technology means I can take my UK SIM out before landing in Germany and stick my German SIM in in Germany. That's provided you have an unlocked phone, which I of course do.

        However, speaking of Vodafone specifically, they abandoned roaming charges some years ago…

      • janet94

        But of course, we are talking about going from UK with Orange/T-Mobile UK having something like 42% of the UK market to Germany with T-Mobile Germany (with German government being the largest shareholder) owning maybe close to 40% of the German market.

        AT&T/T-Mobile USA won't even approach that level of market concentration.

        Americans enjoy going coast to coast in the US without paying for roaming rates, don't need to take out a SIM just because they are traveling from New York to California.

        The whole article by Horace is backwards — he talks about a bunch of European policies that even European regulators DON'T believe in anymore, then he come to his conclusion that the American recent success in entirely a fluke.

        My argument is pretty straight forward. Imperfect world will have imperfect policies. While American policies aren't going to be perfect in every sense, they ALL worked pretty well.

        (1) Spectrum auction works as intended (as opposed to some European countries like Sweden's and Ireland's disastrous 3G beauty contests). It may not be perfect, but we ain't living in a perfect world either.

        (2) Talks of high auction prices would lead to high mobile tariffs was debunked with the iPhone. UK pretty much has the best iPhone tariffs in Europe, even though they had the highest 3G auction prices. Norway had one of the most idiotic iPhone plans in the whole world, yet their government basically gave the spectrum away.

        (3) European regulators have embraced technology neutral spectrum auctions and technology neutral spectrum refarming.

        (4) European regulators are beginning to embrace spectrum trading.

        (5) European regulators have decided (as a group in the EC) that the long term solution to the mobile termination rate mess is "bill and keep" American style system.

        (6) iPhone definitively killed all illusions about the effectiveness of European simlocking regulations.

        Name one regulation that the US should copy from Europe.

      • "Name one regulation that the US should copy from Europe."

        Common phone standard so the handset hardware is compatible across all carriers? You expect your landline phone to work in the US no matter which carrier you have, why should your mobile be different?

        I don't pay roaming charges flying from one side of the UK to the other either, just when you go to another country although as I've already pointed out, those have largely been abandoned or significantly reduced in Europe for European carriers.

      • janet94

        Not even Europe believes that anymore.

        All the 2G re-farming and 3G expansion band auctions are technology neutral in Europe.

        The single GSM standard was a complete fluke. The single 3G WCDMA standard was a complete disaster in Europe — prompting European regulators to finally accept that technology neutral is the only way to go.

      • You keep spouting this disaster without citation.

        From a consumer point of view, it's been great. One standard across most of the planet, just buy a phone and select a carrier you like.

      • janet94

        You are the one who aren't giving citations.

        I gave citations on European regulators migrating to technology neutral auctions and refarming. I also gave citations on European regulators' position on mobile termination rates.

        You are like the story about the group of blind men with the elephant. If it was just a great thing for consumers, why is the EC changing their positions?

        Before the iphone was launched in Europe, all kinds of myths existed on how good the European system is — because there is no way for normal people like you and me to verify them. There is always some guy from some European country that claimed this and that — and you can't verify the information because you don't speak Swedish or Dutch, so you can't go and check their local websites.

        The iPhone's international launch gives readily available verifications (in English so everyone can understand) on all these European myths — guess what? None of them panned out.

      • There were no citations in that list. You've just stated them as fact.

        ok, I'll take them as fact. But again, where is this disaster?

        We can freely switch SIMs, we've 3.5G almost everywhere and we've tariffs that are three to four times lower than the US. How is that a disaster?

      • janet94

        Read the actual article that I cited, it specifically stated about European regulators migrating to technology neutrality.

        Disasters have been all over the place, like in Sweden — where one carrier gave back the 3G license, another carrier locked into numerous lawsuits with the regulator.

        You don't have to look very far, just look at Ireland (and it's in English so easy for you to verify) — very high profile 3G beauty contest. Then big disasters. Then their regulator changed to auction — without ever mentioning their previous disaster.

        That's how bureaucrats and politicians operate — the failures don't exist, swept under the floor. Nobody ever talked about it. You won't see any white papers talking about the failures of their 3G beauty contest in the regulator's website.

      • tsw

        If you want to move around you buy an unlocked phone and prepaid SIM cards.
        Thousands of dollars ETF in real life? Where? Thats more than the total costs for the contract over its runtime.
        I have seen offers for the iPhone 4 + activation fees + monthly fees for 24 months totalling 700 Eur.
        My monthly costs are about 15$ (1000min/1000SMS/1GB) and I can end the contract with one month notice.

        The difference is: There is a lot of competion and customers can easily change operator.

      • janet94

        700 euro is close to a thousand US dollars.

        In the US, the max ETF is $350 — and prorated by reducing the ETF by $10 per month.

        There is A LOT LESS competition in Europe. UK, France and Germany have their top carriers with a market share larger than the top American carrier. You have Orange/T-Mobile UK combination that is larger than AT&T/T-Mobile USA. You have only 3 national carriers in France — all 3 are French controlled with zero foreign competition and all 3 were fined hundreds of millions of euros for price fixing in 2008. You got German government still owing 1/3 of DT/T-Mobile and is larger in market share than Verizon in the US right now and possibly larger that the AT&T/T-Mobile combo.

      • Kizedek

        And you walk away with an unlocked iPhone, which is why you would pay the remainder of the contract you signed if you want to leave early; as he said, in some cases this is as low as 700 total.

        Your 350 max ETF? Are you trying to say you can sign up for a subsidized iPhone, cancel in one month and therefore walk away with an unlocked iPhone for 350 bucks? Sign me up.

      • janet94

        It will be possible when Apple launches a LTE iPhone — because Verizon has NEVER simlocked their phones.

        It is also possible for Brits to get an iphone on contract, pay hundreds of pounds to terminate said contract — and the carrier DOESN'T give you the unlocking code. There is NO ofcom policy requiring the carriers to give you an unlocking code.

      • Verizon doesn't have SIMs IIRC and doesn't use GSM so it'd be useless to 'SIM lock' it anyway as there's no other carrier to use it on. Galapagos Syndrome in perfect effect.

      • janet94

        Verizon will have SIM cards on their 4G LTE phones. There is an equivalent CDMA form of locking phones to a particular CDMA network — but Verizon has NEVER used that form of CDMA locking.

      • But again, what's the point? Unless that LTE phone supports GSM 2G/3G operation it's as useful as a chocolate fireguard.

      • janet94

        The point is that your simlocking laws in Europe are useless.

        The ONLY way to give consumers the best protection is — a great number of national carriers. Of course with the AT&T/T-Mobile USA merger, that will harm American consumers.

      • Kizedek

        To clarify, since it seems to be a misunderstanding you have:
        You don't pay 700 (or 1000 or whatever) on top of what you have already paid, you pay off the remainder of the contract at most, so in that sense, it is pro-rated. You would probably get credit for unused minutes on the remaining months. You may also find deals for 0 down, rather than 99 or 199 dollars.

        So, I don't know why you keep comparing this 350 of yours to the total value of a European two-year contract — which, again, we choose on the basis of phone and minutes, etc, not which network's technology is dropping the most calls in my city.

        Also, when you talk about us paying this mythical "thousands", be sure to take into account the resale value of the phone and the chance to sell an unlocked phone on to anyone no matter what network they are on, if you did happen to want to try a different phone for 0 down.

        And like Aegis, I don't know anyone who pays roaming fees across Europe, we just pop local SIMs into our phones.

      • janet94

        I misread the original comment, but the writer didn't really specify what kind of deal it was — how many minutes and how much data allowance.

        You pay more money for an unlocked phone initially and you may or may not get them all back. Nothing prevents you from selling a simlocked phone to another person who wants it on that particular carrier. You pay less money for the phone initially and you get less money back.

        Switching SIM cards within Europe is a symptom of what's wrong with Europe. T-Mobile, Vodafone and Telefonica all operates in many many countries in Europe — but people still have to switch SIM cards to get the lowest rates. Americans who travel from New York to California don't need to switch SIM cards.

        I have listed half a dozen issues that Horace got it wrong — he was so "surprised" that Americans ended up being the front runners in the mobile technology race.

      • Yes it is a bit stupid that we have to pop out a Vodafone UK SIM for a Vodafone Spain SIM when they're essentially the same company but each country has their own regulations and so the tariffs are different in each country. Europe isn't that homogenous.

        "Americans who travel from New York to California don't need to switch SIM cards."

        I'd hope not, it is ONE country. I don't have to switch SIMs if I hop the 2 miles over the border from Yorkshire to Lancashire.

      • janet94

        Don't blame Americans on the lack of SIM cards when it is really a regulatory failure in Europe where the only way consumers can afford to talk on the phone is by popping SIM cards in and out constantly.

      • What? There's a LOT MORE competition in the UK. Here we have 4 carriers and at least a dozen MVNOs. Since they all compete in the exact same GSM bands that every phone supports, pricing is much more competitive than the USA.

        France is France and are renowned for their protectionist policies. Despite that, their prices are still cheaper than the US, the phones are sold unlocked and you can swap SIMs out when you want.

        If you think the US model is so much better. why is it more expensive and more restrictive for the consumer?

      • janet94

        T-Mobile UK/Orange has something like a 42% market share in the UK. Not even AT&T+T-Mobile US will have that kind of market share concentration.

        The market in the US is so much more competitive than in the UK that when Verizon lowered their price for the unlimited voice plan, AT&T had to match it WITHIN HOURS.

        There are all kinds of MVNO's in the US as well — with Tracfone being the largest MVNO is the US with 18 million subscribers.

        US is a lot LESS EXPENSIVE than in the UK — that's why Ofcom (being the first European regulator to do so) decided 2-3 years ago that the American style of mobile termination rate.

      • ok, show me a plan as cheap as… which aren't untypical. That's around $35 for more than I'd possibly need whereas I'd be spending $100+ in the USA. Worse than that, paying for incoming calls also if we went for a US style system.

      • janet94

        Do you know why 3 UK (and basically every 3 carrier around the world) launches price war all of the world?

        It is because Superman Li Ka-Shing got into the 3G market BEFORE the 2000 internet bubble. Now he is stuck with it. So what did he do? He tried to IPO 3 Italia, and he had to pull the IPO. He launches price wars so that he could force his competitors to buy him out — that's what he did in UK and Australia. Simple as that.

        It partially worked in Australia — when he managed to monetize his investment when he merged 3 Australia with Vodafone Australia. He wasn't so lucky with 3 UK.

      • chandra2

        janet94, I have been following your argument in this thread and I very much like to be on your side.. I was looking for the knock out punch but I did not see one. Your point in relation to the price issue that aegisdesign brought up is exactly how a capitalistic market is supposed to operate. We can not go digging into the reasons and motivations of price wars, as long as they are within legal parameters.

        After reading all this, it looks to me that most of Europe has pretty good competition resulting in cheaper prices and total cost of ownership for consumers. It is achieved through central regulation is a bit hard to swallow, but that is what it is. Europe may suffer in future technology evolutions like 4G given their penchant for central regulation and the usual delays associated with it due to bureaucracy and politics but what they did with GSM + 3G seemed to have worked. Centrally regulated standards is not lazze faire alright but it is not always a recipe for failure. TCP and HTTP as standards worked wonders for the internet and WWW, agreed those were not strictly government enforced. Sometimes the Adam Smith's guiding hand need not be the invisible kind, though a priori my bet would be on the American style guiding hand..

      • janet94

        Where do you get the idea that most of Europe has pretty good competition?

        The reason for the price war in UK — is precisely to force one of the other carriers to buy Li Ka-Shing's disastrous 3 UK business out. I did not saying that it's illegal. I am saying that there is NO consumer benefit in the long run — when 3 UK gets bought out in the future. You are talking about short term benefit. I am talking about long term problems. This is the UK anti-trust regulator that did NOTHING to stop the Orange/T-Mobile merger — no forced selling of subscribers, no forced selling of spectrum. NOTHING. Do you think that they will do anything if 3 UK gets bought out? Nope.

        UK, Germany and France (200 million population) all have vastly less competitive market than the US.

        What we have here is statistical outliers with 3 UK, 3 Australia, 3 Italia — a Hong Kong billionaire who bought at the height of the bubble, facing massive losses and trying anything to cash out. Failed IPO with 3 Italia. Partial cash-out with 3 Australia. Still can't cash out with 3 UK. WHY would you NOT dig into these very specific reasons and motivations? They are very specific to that particular billionaire owner, which can't be applied anywhere else — NOTHING to do with the discussions that they are having, with respect to regulatory differences. Li Ka Shing would have done exactly the same thing in the US if he had bought a carrier in the US.

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  • janet94

    US is 4 years ahead of Europe in FTTH deployment. Transportation — Warren Buffett bought a railroad, because freight transportation is the future of railroad — not passenger railroad. Banking technologies — you mean digital nfc wallets in Japan where Sony making the chip is losing money, DoCoMo deploying the chip is losing money, end-users have plateaued in numbers where the only benefit is to buy a can of coca-cola in a vending machine.

    Other countries have "good" infrastructure — because they are pork barrel projects. Japan has the most bridges to nowhere. They have the most advanced fibre optics network in the world — didn't help them economically for the last 20 years — the "lost 2 decades".

    • You know Janet. The reason that we can have a conversation on this website is because people got together agreed on a standard for the internet. Even with these standards, I would say quite a lot of innovation is still happening on the web.

      • janet94

        And the reason why we can have this conversation is that Apple and a bunch of other companies decided that the single HTML standardization body no longer works — and they splintered into a separate group to do HTML5.

      • Kizedek

        The "splintering" was about 10 years ago with XHTML. HTML is now back on track. HTML is HTML and version 5 is merely extending the standard with new capabilities.

      • You are a like a hammer that thinks 'deregulation' is the nail.

      • janet94

        I NEVER said that.

        BUT I think that all you geeks have it all wrong in terms of what things to regulate.

        The iPhone's international launch has proven once and for all that simlocking regulations don't work.

        I think that it is idiotic for the French government to outright banned iphone exclusivity at the same time babying their 3 national carriers from foreign competition. The French carriers abused the market so much that they were fined hundreds of millions of euro for price fixing in 2008. Simpler and yet more effective regulation — just auction a 4th (which they did last year) and maybe even a 5th telecom license and allow some foreign telcom company to control a wireless carrier in France.

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  • berult

    The Amazon River basin is to my mind a more relevant analogy than Galapagean evolutionary autarchy.

    The rich, diversified, deeply as well as shallowly integrated sets of interacting ecosystems webbed out of water and heat in primeval symbiosis, while sensitive to obtrusive alien interference, yield the greatest intelligence sustaining apparatus of our planet. It's complex, robust and fragile all at once, and endowed with ready made optimal and transferable modeling of our capacity to thrive, as we adapt to the long inflection-prone arch of History. 

    What water ^ heat have accomplished in the biodiversity realm, a maelstrom of human migratory 'forced-out' ingenuity, lightened up from the removal of ethical constraints that bored deep into the fatherlands' play books, has percolated ever brewing but no longer contained and suppressed creative instincts into the American techno-economic Story Book.

    American bred diversity, or regional and sectorial lack thereof, extracts ingenuity out of a scarcity of regulated resources. Monopoly, duopoly, oligopoly or pure market driven competition, all have their biological equivalents in life sustaining 'fuel efficient' ecosystems. There is no litmus test for survival of the fittest, nor is there one for marketable genius. You simply bring to market your sugar coated in-house survival recipe, …and collect license fees as if your life depended on it, …for it did, as it still ultimately does…

    The golden rule here is seamless market integration of less-than-perfect local solutions to less-than-perfect local conditions. There had to be plenty lonesome servings of the latter two in early American History, …fortunately as fate, happenstance and 'good manners' would have it, emerged with the passage of time a singular wholesome helping of the former. There lie the strength and resiliency of a self-made, no holds barred, marginally regulated economy within the uniqueness of a pan-American reality.

    What the Amazon River Basin contributes to biodiversity, the American patchwork landscape does to economic diversity: a template for nature driven and human-nature driven creative behaviors. Initial conditions, time and permeable contexts hardwired them both to run 'in continuum' and 'in contiguity' albeit locally amok …for their lives and those of their survivalist progeny.

    • chandra2

      berult, it looks like you are saying something profound, but I have great difficulty in understanding half of what you are saying. Can you elaborate, possibly using simpler language? Thanks

      • berult

        Thanks chandra for your interest…

        Survival in a tough competitive environment, within the ever present option of moving away unimpeded, simply brings a potentially creative mind to a climactic problem solving apogee. America got the best from Europe, as if it had laid its hands on the ingredients of a great recipe, and empowered with open spaces and 'bare fisted' rules and regulations its latent geniuses to mingle freely for a creative covenant.

        This is the backdrop to epi-phenomenon such as American carriers' tariff policy framework. What it shows to lack in originality, means that the burden of creativity has been passed onto and 'incorporated' higher up in the sectorial 'food chain'. Hence, a lack of original thoughtful development is fully compensated for within a resilient, if challenged, organic economic system.

        Europe tries to regulate and rule away its fragmented mindset. The US rides the coattails of its wild, hostile or friendly but ever so neighbourly past and glories… What one tries to hide, the other aims to ride.

      • chandra2

        berult, you made me look up 'apogee' 😉 Good stuff, thanks. In fact, when the innovations begin in the U.S. it does look very messy and it takes a while to sort things out. Other countries, when they adopt it, they have the benefit of not having to go through that experimental lab. For example, when telephone network was first setup, there were many islands of networks and it took a while to setup inter-carrier exchanges.
        Even railroad, if one company refuses rights to run the trains of another company, that other company laid down their own rails. Others might have a good chuckle at that now, but that is how the industry developed and evolved. The imprints of that are still visible in the railroad systems of many cities, Chicago being a prime example. Also, when a foreigner comes to U.S. they are usually astounded that several services and utilities that are taken for granted as provided by government are indeed provided by private companies. That may be electricity, water and gas or railway service or telecom network etc. Only recently, rest of the world learnt to privatise a lot of those 'utilities'.

      • janet94

        But it is precisely because the US believes in the "experimental lab" that they have the silicon valley there.

        Many people who commented in the thread — including Horace who wrote the article — dismissed the idea that America is ahead because the iphone and android are from the computer industry, not the telecom industry. These people are wrong.

        Who are the people invented wimax? Intel — the computer industry giant. Who are the people makes use of SMS and make it twitter? Silicon Valley start-ups.

        Europe would NEVER have developed the iphone or android — because they don't have their own silicon valley and they don't have the environment that would nurture start-ups.

  • JayJay

    People, I am almost certain that janet94 is a PR employee for a wireless corporation. Or is preparing for a debating competition. I can't imagine anyone else defending anything so wrong as vociferously as this.

    American carriers also charge for tethering (although it violates every principle of logic, except greed). Speed throttling is probably better than bill shock (you know, that trick where they slap you with a huge bill for exceeding caps knowingly or unknowingly).

    Yeah so Qualcomm did some research and made a new technology. Well isn't that such a huge surprise? I mean a technology company doing research and making something new? You would almost think that they were doing something that was completely not expected from them.

    • janet94

      No, I don't work for the telecom industry.

      I never said that American carriers don't charge for tethering. I specifically stated that AT&T charges for tethering. BUT some European carriers NOT ONLY charges for tethering, they ALSO (1) speed throttling PAYG iphones, (2) gives you 100 MB monthly data allowance which can lead to huge overcharges and (3) they BLOCK voip traffic LEGALLY for the last 5 years.

      I am NOT defending American carriers. I am saying that grass is not greener on the other side. I am saying that the European system is a thousand times worse than the American one. You are defending the indefensible.

      It's been 3.5 years since the international launch of the iphone in Europe. When are you people going to take red pill (a la matrix)? The iphone is the best source of primary source information of how crippled the European system is — the iphone is so high profile that you can always get primary information in English.

      • asymco

        I would add that I did not mean to defend European operators as somehow enlightened. The industry is in crisis on both sides of the Atlantic. Europe had a historic advantage in a unified network layer, but it did not capitalize on it by building the computing platforms of the future on top and that advantage is now squandered. I suppose I could argue that the never really had a chance. It's the nature of disruption.

      • janet94

        That's where I completely disagree with you.

        Where is the crisis in America? Sprint-Nextel was a self-inflicted wound. T-Mobile USA was not given money by the German parent to bid for spectrum in auctions — presumably because DT wants to use that money to buy wireless carriers in other countries. Nothing to do with regulatory frameworks.

        GSM was a fluke. WCDMA was a massive dud. Silicon Valley is based on the fact that maybe 1 out of 100 start-ups would be a huge hit. If European bureaucrats knew which technology would be a hit, they would have become internet billionaires. With that kind of odds, Europe NEVER had a chance to repeat the GSM fluke.

        This is the rabbit vs the turtle. Slow and steady wins the race. You leave the economy to sort out the technology winners and losers and you leave the companies to actually listen to the customer's wants and needs — and you will come out ahead in the end.

        Europe NEVER had the chance because they NEVER listen to their customers — and they end up with a couple of hundred million phones with front facing camera for video-calling that nobody uses. Qualcomm listened to their customers — that 3G was really about enterprise road warriers with their laptops — and you end up with the correct call to not have ev-dv.

  • Wow, you're still going with the USA No.1 rant.

    In the rest of the world, most carriers DO offer you reduced pricing if you provide your own handset. Just look at the pricing of SIM-Only deals in the UK for an example.

    Verizon's unlimited plan is $120. In the UK the equivalent is around $35.

    • janet94

      The problem is that your regular price is many times more expensive than the regular American price and so your special reduced pricing ain't a bargain either.

      Again, Li Ka-Shing has been trying to force other competitors to buy him out. He flips businesses and Americans flip houses. I know that because I am a Hong Kong born Canadian — I can actually read news about him and his business in original Chinese.

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  • Kumar

    guys have a look at the indian market….there are approx 6-8 operators fighting for customers…atleast 2 support CDMA and movement between the 2 is allowed…incoming calls are free,and outgoing is dirt cheap(50p/min=1cent/min approx)…data charges are little high,but still cheaper than US(i use to have 50 MB plan for Rs5(10cents))…I was surprised when i arrived in US and saw that the rates are so high….Competition helps reduce the prices and better service to people….

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