Government

T-Mobile anti-innovation actions mirror transit data debate

by David Alpert   •   September 24, 2010 11:20 am

This blog isn't about consumer technology, but some recent news in the mobile carrier world has created grave worry and reflects the fight we had over opening up transit data to the public.

Photo by Fredo Alvarez on Flickr.

It's time for me to get a new smartphone. I've been a pretty happy T-Mobile customer for years, and was one of the first to buy the G1, the first Android phone. I was getting excited about the G2, which will be faster and better but still have the slide-out QWERTY keyboard that lets me type quickly.

However, two recent T-Mobile actions made me consider dropping them entirely.

First, T-Mobile announced they were for companies that send SMS (text messages) to T-Mobile customers. Many startup companies let you get information like news, sports scores, answers to questions, and more using text messages, and you can even use them to pay for parking.

These messages cost carriers virtually nothing, yet they charge large amounts of money to customers for texting add-on plans or individual messages at huge markups, and then again charge companies to send the messages. Meanwhile, Web sites don't have to pay for customers to reach them using their Web browsers on phones or for emails sent and received through mobile networks (though some carriers would just love to start charging them). That makes it possible for free sites like ours to reach people on mobile devices.

T-Mobile quickly assured customers that this isn't a price increase on Twitter and Facebook, the largest SMS users. Those companies have special deals with T-Mobile for special pricing around their huge volume. No, the price increase would only apply to other companies that work through third parties to handle their text messaging.

But that's even worse. T-Mobile is basically saying they're going to make these text message-based business models more expensive, but don't worry, because the big companies won't pay more. But the next Twitter might not be able to afford to build up its business using texts the way Twitter did. At least one company will stop delivering to T-Mobile customers as a result.

I actually don't text much, and don't use any services of any of these companies who are affected. I might pay for parking by text message in the future, however. But I want to see businesss thriving in the mobile space, because in the future more and more of our online activity will happen through mobile devices.

Many commenters on various sites don't seem fazed. This is just between big companies, some are saying, and shouldn't companies pay to reach T-Mobile users? This resembles the arguments Gordon Linton made against opening up transit data for free. If it's something useful, shouldn't people pay WMATA to get access to it?

This worldview misses the way most of the Internet has grown based on free or extremely cheap services and business models. Web sites can exist with just a pittance of a monthly hosting charge, and many, many sites exist because of that that wouldn't otherwise. Many businesses can provide free services to customers because their distribution costs are so low and they can make enough in advertising to cover the rest.

The mobile carriers don't really care about this. They want to set up tollbooths wherever they can and charge companies to be accessible to their customers. If there were plenty of carriers, competition would prevent this, because whoever sets up more tollbooths would just lose customers to others. But there are only four carriers, and they act as a tight oligopoly. Just look at text messages, whose prices have gone up over time for individual messages even though costs have not. That's not competition.

The second troubling event from T-Mobile also revolved around text messaging. A Web site that offers information about legal marijuana dispensaries was working with a third party aggregator service to let mobile users send it text messages. Despite there being nothing illegal about the site, T-Mobile decided it didn't like the content, and blocked not only that site but the aggregator and all its other customers too.

Greater Greater Washington uses a hosting provider called TekTonic. This is analogous to Comcast deciding to block all TekTonic Web sites across the board because they decide that they don't like our advocacy around transit-oriented development.

Unfortunately, there isn't really a good carrier. All carriers charge exorbitant text rates to their customers, and most have unfairly censored text messages in the past.

There's CREDO Mobile, a progressive-focused carrier that runs on the Sprint network. Sadly, CREDO and other MVNOs are very limited in the phones they can offer. They only have one Android phone, the slightly old HTC Hero that has only a virtual keyboard.

If we lived in Europe, this wouldn't be such a problem. In Europe, all carriers run on GSM, and you buy a phone separately from a plan, just like here you buy a computer separately from your Internet access. If we had that, or if there were GSM MVNOs, I could buy the G2 without a contract but give my monthly business to a different carrier.

But I can't. I could leave for Verizon, but they're creating their own app store to try to force app developers to pay them when Verizon customers install their apps, and have been one of the worst text censors. AT&T doesn't even allow installing unapproved apps on their Android phones. Sprint blocked charities trying to raise money for Haitian relief.

Really, the FCC has to get involved. This isn't a properly functioning market. Carriers may be competing on features for phones but they're not competing on prices for features like text messages and they each have too much market power to try to control access on the back end. This is why we have regulators. The FCC can very easily use the nondiscrimination rules it already has for phone calls. T-Mobile can't prevent me from calling anyone; why should they be able to prevent me from texting someone?

You can sign Public Knowledge's petition to the FCC asking them to act. And if you work for the FCC, tell your infuriatingly timid agency to get off its ass already and do something about the horribly broken and non-competitive mobile industry.

David Alpert is the Founder and Editor-in-Chief of Greater Greater Washington. He has had a lifelong interest in great cities and great communities. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He loves the area which is, in many ways, greater than those others, and wants to see it become even greater.