Tagged: Cellphones

It’s not just your imagination: Cellphone plans are getting more expensive

Just last week, analyst reports from Wall Street investment firms highlighted the fact that revenues for wireless networks are going up rather than down for a change. We pointed out that what’s good for Wall Street isn’t necessarily good for the consumer, and new data from the Labor Department, highlighted by the WSJ, definitively shows that those wireless company revenue increases are coming right out of your pocket.

The consumer-price index for wireless phone service, a government-calculated metric for the price of cell service, is up 0.3% in June 2018 compared to a year earlier. That might seem like an insignificant difference, but technology improvements and competition have traditionally pushed that metric down, not up; the last such increase was in July 2016, nearly two years ago.

What’s more, the price increase makes little sense when you consider the stage we’re at with wireless network infrastructure. 4G LTE is now a mature technology, and wireless companies have stopped scrambling to build out entirely new networks. Capital expenditure has been relatively constant for the last five years, and while 2017 was slightly up on 2016 in terms of spending, it wasn’t enough to warrant a significant increase in prices. Yes, networks are putting in the ground work for 5G networks, but you can be sure that consumers are going to be paying the premium to access those 5G networks when they come online. Without major increases in 4G LTE investment, carrier price increases are just squeezing the last drop of juice from a network that’s about to be overhauled.

The biggest factor in those increased prices has been a cooling-off of the price war between T-Mobile and Sprint. In related news, T-Mobile and Sprint have announced plans to merge, something that critics have said is going to increase wireless prices going forward, which T-Mobile and Sprint have stridently denied. This could be a giant coincidence, but really, it’s a live demonstration of what analysts have been saying all along: Removing the competition between T-Mobile and Sprint reduces price pressure across the entire industry, which will slowly allow prices to creep up across the board.


Cops can locate anyone’s cell phone in real time without a warrant, all thanks to a privacy backdoor

Pervasive government surveillance might be virtually expected by this point, but in theory, there’s a robust legal system to deal with cops surveilling citizens. Law enforcement agencies are supposed to get a warrant and serve that to cellphone companies, who then provide the data.

But according to a New York Times report, a company that primarily deals with prison phone systems has leveraged a data-sharing service offered by phone carriers to allow cops to track any cellphone number, with no legal checks in place to stop it being abused.

According to the report, a former sheriff of Mississippi County, Missouri, used a service called Securus to surveil targets’ cell phones, including a judge and other police officers. Securus used a data system that cell phone companies typically offer to marketers who want to micro-target consumers based on data, including their location. But in this case, Securus tapped into the system and offers its subscribers virtually uncontrolled access to nationwide location tracking.

The NYT claims that Securus, primarily known for its prison phone services, offers location tracking to its law enforcement and prison clients as an additional service. The company cited examples like helping a drug rehab center find a patient who left as a reason for having the system. However, it doesn’t vet requests to ensure that a warrant or other legal instrument has been issued for the tracking; instead, it makes the user tick a box saying that their tracking is all above-board.

“Securus is neither a judge nor a district attorney, and the responsibility of ensuring the legal adequacy of supporting documentation lies with our law enforcement customers and their counsel,” a Securus spokesman said in a statement to the NYT. “Securus offers services only to law enforcement and corrections facilities, and not all officials at a given location have access to the system,” the spokesman told the newspaper.

Senator Ron Wyden has already sent letters to the FCC and telecoms companies requesting details about the program, according to Motherboard.

“I am writing to insist that AT&T take proactive steps to prevent the unrestricted disclosure and potential abuse of private customer data, including real-time location information, by at least one other company to the government,” the letter to AT&T reads.

Actually, Canadian cell companies are bad

This morning, American media got all frenzied about a new rule imposed by the Canadian government. Starting December 1st, all cellphones bought from a cell carrier in Canada have to come unlocked out of the box, and the carriers can’t charge a fee for the service.

This is a great and much-needed thing for Canadian consumers. But Americans don’t really need to worry about losing the “land of the free” competition any time soon: although you might still have to pay a fee to unlock phones in America, at least the networks don’t massively suck.

Just like in the US, Canada is dominated by a couple large wireless providers. There’s Bell, Rogers, and Telus that cover all of Canada, and a handful of smaller companies that only have a network in one region or province.

But unlike the States, where the different cell networks offer a different kind of service for a different amount of money (Verizon good but expensive, Sprint cheap and bad), all the big carriers in Canada offer suspiciously identical service for a suspiciously identical price.

There’s no unlimited plans, no cheap prepaid plans, and certainly no “all taxes and fees included” plans. Instead, Canadian cell carriers provide good (but hilariously expensive!) service on long contracts.

This isn’t just a bitter expat ranting at the clouds: a study by the CRTC, the same Canadian government body that just banned locking phones, found that Canada’s cellphone bills are the highest of any developed Western country. To give you an idea, a two-year 5GB/month plan on Rogers with no device payments runs about US$110/month.

In fact, the Canadian cell plans look a lot like America’s did 10 years ago. The business is still centered around buying phones on two-year contracts that are difficult and expensive to break.

Worst of all, there’s basically no discount for bringing your own phone to a network. Buying an iPhone at the Apple Store and then buying a SIM card only saves you $5-10 a month on your cell plan, compared to just buying a cell plan that includes paying for an iPhone.

What that actually means is that Canada’s shiny new cellphone unlocking service isn’t going to help anything. As long as it’s cheaper to buy a phone on-contract than from a store, people are going to remain tied into stupidly long and expensive contracts. The lack of mobility to change carriers is what really hurts competition, as people just stay on the same carrier rather than hunting around for deals every year.

Americans know all of this, because it’s what the American cell industry looked like a few years ago. It’s only since service contracts and on-contract phones started to die off that competition became fierce, and we started seeing prices fall and unlimited contracts return.

So yes, the Canadian government has done a good thing and made sure that all phones will be unlocked for free. But really, the only people that’s going to help are the snowbirds who flee Montreal for Florida every winter and want to buy a T-Mobile SIM while they’re down. For everyone else, it would be more helpful if the government could address the underlying lack of competition, rather than rearranging the deck chairs while everyone keeps paying $140 a month for cell service.