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Spread 'Em, Wireless Companies — It's Time For An FCC Probe

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Back in July, Consumer Reports revealed that the FCC would be taking a long, close look at cell phone companies, and this week it's finally time for that probe.

USA Today reports the FCC's probe has not one, not two, but three prongs (youch!):

The FCC's probe, expected to be discussed Thursday at its regular meeting, has three parts: One will examine wireless competition; the second will look at barriers to entry and investment; the third will focus on consumer billing, including wireless contracts.

Could this be the beginning of the end of long-term commitments, outrageous prices and iPhone-AT&T-style exclusives? We can only hope.

FCC takes aim this week at protecting wireless consumers [USA Today]
(Photo: UFO Mystic)

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64
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Nothing starts my day off quite like an anal probe joke.

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After reading this article, I'll never look at my cell phone in quite the same way...


But seriously, this is good news. I'm with the majority of people who would rather pay full price for a phone and go with the carrier of my choosing. I hate a lot of the newer phones, and there are some style phones that other carriers offer that I can't use with Verizon.


Sucky. Hope that changes- I've been out of contract for a long time now.

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Hopefully they will solve the mystery of why data transfer and storage costs go down over time, but prices keep going up. I mean really...$70-$120 a month for voice/data?

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What doesn't make any sense is how AT&T charges $30 for the internet on smartphones! Why? I don't see any real justification besides them being greedy-ass bastards.

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@katstermonster: The alien pic is just so apropos, too. It's awesome. I wonder if this was the result of a Friday Flickr find. I mean, who just has this kind of jpeg or gif lying around?

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@katstermonster: I think every Monday should start with an anal probe joke.


The idea of a Verizon CEO being anally probed just brightened my day considerably. Thanks, Consumerist!

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@Verucalise-WelcomeBethany: Exactly. Taking a look at basically every other country with a celluar/mobile infrastructure, ours is almost archaic. We're one of the largest, most technologically advanced countries, yet we're getting the short end of the stick on one of the biggest, emerging/developing technologies. What gives? Glad to see an entity with some power (assuming they follow through with any decision they make) has taken an interest in this.

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@bloggerX:
Why should they have to justify their prices? If you think it's too much, go elsewhere. AT&T, like other for-profit businesses, makes money by charging more for a service than it costs them to provide. If they want to mark it up 1000% so be it; if people will pay it, they have priced it right.

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That is not a great picture to see in the morning.

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" I don't see any real justification besides them being greedy-ass bastards."


Hence the importance of the anal probes.


If they are going to be probing the executives of the different carriers, I have two questions:


1. Will they be televised?
2. Will they accept subscriber input?


"WHY THE HELL DO I PAY AN ETF ON A PHONE THAT'S ALREADY DEPRECIATED?!! Work that Probe Mr. FCC man!"


I'm bringing the popcorn.

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so the FCC wants manufacturers to produce every phone for GSM, CDMA, and i-den (is that still used?) If a company, like verizon, wants to get the iphone on their network they should have implemented GSM like the entire rest of the world 6 years ago when Cingular, AT&T Wireless, and T-mobile did.


Forcing Apple to make a CDMA version will only make it more expensive for the rest of us.

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@starrion:

"WHY THE HELL DO I PAY AN ETF ON A PHONE THAT'S ALREADY DEPRECIATED?!! Work that Probe Mr. FCC man!"

Simply because you financed the phone when you signed the contract. They give you a cheap phone, and then make up for the difference with the price of the contract. That's like asking why your car payment doesn't go down when it depreciates, or perhaps more pointedly for you, why your mortgage payment doesn't go UP as your house appreciates (current economy aside).

A better question is why customers like myself and many others, who bring their own phone to the carrier, or who do not sign a contract right away, keeping their older paid off phone, do not get a break on their payments.

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Hopefully it will at least be the end of Verizon's horrendous billing department.

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@Esquire99: Like where? To the one other carrier? These is no meaningful competition--a duopoly, basically, with a few niche players and extreme barriers to entry. There certainly are not enough choices to drive down prices. And, the traditional regulatory structure has required either competition or heavy regulation. Take your pick.

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FCC staff: "So Mr.Wireless Oligopoly, we seem to have a problem with your business policies as they seem to be, let's say, unconstitutional."

Mr. Wireless Oligopoly: "Oh yeah? What seems to be the problem. [Slides multiple envelopes containing $20,000 in crisp $100 bills across the table]

FCC staff: "Our mistake, have a good day!"

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@Saboth: Because they are running a business? Traditionally you try to make more money not less.

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That picture is... unsettling. Not as bad as the cover of Communion, but still. They don't freak me out nearly as bad as they used to, but that is a creepy picture.

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I have no faith in this proble.

The FCC has probed and called the cell companies on the carpet many times before (seems like every 6-months or so).

Nothing substantive has ever come of these probes. Is your cell phone bill lower today? Is it easier to switch cell phone companies today? Are the contracts any clearer? Third world countries have better, cheaper, wider coverage than the USofA. Japan and most of Europe have systems that makes ours look like cups on a string.

Expect the usual blather from the FCC, a slap on the wrist and a small fine for the cell phone companies, and another set of rates hikes for us consumers.

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I predict the cell phone & carrier lobbyist will simply pay off our elected officials and then blanket the media with how screwing their customers is good for them.

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@captadam:
The different carriers have different pricing. If I recall correctly, Sprint's unlimited data plan is far less expensive than AT&T's.

Further, I'm not sure the barriers to entry are as high as you claim. Many of the carriers lease network space to smaller companies, such as Virgin Mobile, Boost and Cricket.

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@Adhominem:
Monopolies/oligopolies are not unconstitutional.

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@jaydez: Verizon and its customer should miss out on a phone because Apple only wanted to develop for GSM? I doubt that is the only reason. Exclusivity, more control over the platform and guarantees from AT&T likely sealed the deal over anything else.

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After watching gov't act for a few years, I think this will give the wireless industry time to pump some serious cash to the government, which will serve to worsen our wireless service. If the wireless providers don't dump serious cash to the gov't, then yes, we will see some serious price drops and better service. Any bets?

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I hope the wireless companies are as freaked out as I was when I saw that picture.

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@Adhominem: Yeah, agreed with Esquire99 here - I'd be curious to see a quote from the constitution that wireless companies are violating.

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@tmlfan81: Even if there was exclusivity, a manufacturer of hardware should not be required to support every type of hardware option. Why should they make a CDMA version? GSM works world wide and they would be forced to release a CDMA version just for the Verizon and Sprint customers in the US?

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@bloggerX: Companies are beginning to require data plans on "smartphones" because, for a while, they were a relatively untapped revenue stream in the consumer arena. Most business users opted for data plans because of how the devices were utilized. Savvy consumers that just wanted a way to keep their schedules in check and take advantage of the more robust media capabilities of smart phones were getting around the more traditional revenue streams that wireless companies were running.


Over the life of a two-year contract on a data enabled device, a wireless carrier charges $720 whether that consumer actually uses their device in that way. That still pales by comparison to the money saved if you side load your media to your device and watch videos and listen to music you obtain from other services.


This is why I wish I still had my Centro; it was grandfathered to where you could have it on the account w/o a data plan. I just need something to manage my calendar with, maybe listen to music or watch a movie on my lunch break.

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Guess they didn't support the healthcare plan.

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Wait, where does the third probe go? I'm squirming uncomfortably as I type this, BTW.

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@Adhominem: But if all three major carriers that comprise 98% of the mobile market ALL charge outrageous fees for texting, which is absolutely free for them to transmit, anti-trust comes into play.

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I am communicating to you from my quarters aboard the Asgard ship Biliskner.

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@Adhominem: Which is why I love living in China. The same money that gets you a 5GB cap in America gets you a 30GB one here (and they have the courtesy of a sliding scale so you don't pay full price if you don't use everything- for comparison, 5GB costs a third of 30GB- or you could go for the timed option if you torrent a lot- it's legal for those purposes here). That's a 7.2Mb down/5Mb up HSDPA connection. You can have all the EDGE data you could possibly use for the same money (I believe the price is about US$60/month). And that's why some government regulation in business is helpful.

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@squinko: At least the alien's not holding its three-pronged, goo-dripping probe.
I'm actually surprised at Phil's self-restraint, come to think of it.
Uh-Oh. Was he replaced by aliens?!!

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@Adhominem: So, in your above comment, you say monopolist companies can charge whatever they please, and suck it up, consumers.
On this one, you're OK with the FCC being corrupt.
To live the life of a house slave must be a tad depressing.
By the way, if you want the FCC to have aggressive staffers that care about the consumers they're charged with protecting, make sure that the elected representatives that supervise them don't have an ideology that thinks that government is always the problem. Or get used to the feel of shackles on your wrists and ankles.

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@Esquire99AT&T refuses to lease out network space with internet/MMS. Sprint has stopped leasing out network space at all other than to Virgin Mobile (after they absorbed Helio) and KDDI Mobile (niche provider, and Boost is a subsidiary of Sprint, I believe), and Verizon also does not seem to lease out any network space with data enabled (they used to, but now Amp'd is gone, leaving behind problems for purchasers of one particular Motorola they carried). T-Mobile and regional providers seem to not want to do this at all. And Cricket is its own provider. Nope, not enough competition. There needs to be a couple more national players. America needs something like Three (the Hong Kong provider that currently also has a bit of a position in Europe and Australia).

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@WiglyWorm: Exactly! For example, in Hong Kong, subsidized plans will go up in price for the life of the contract (when you're paying off the phone). Japanese contracts will itemize the subsidy. (they also tack on 50% discounts just for signing a 2-year contract, which softens the blow; they also have loyalty, student, handicapped, and senior citizen discounts; but even for a perfectly normal working-age person it's possible to stack loyalty and contract discounts to get at most 75% off your bill after 5 years of being with a certain provider)

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@Veeber: Worldwide? Korea would beg to differ, as would Japan. Incidentally, those two countries produce the best phones (smartphones as well ad sumbphones- Omnia? TG-01?) I've ever seen. Samsung and LG are also fairly big players. "Forced" isn't the right word if they already do it at home without any coercion, but there are plenty of models I'd like to see the FCC give approval only on condition that they market them in the US (notice the vast amounts of Japanese CDMA phones that go in for FCC approval but never see the light of day).

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@jamar0303: Sorry, but you may pay a lot less than people in America when it comes to cell service, but I'd never, ever, ever live in China.

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I'm not trusting anything unless it comes from Lord Kinbote.

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Uhg. I wish something like this were happening up here in Canada. Anybody know if there is?

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I can't wait to see clips of Verizon's CEO after the FCC probe ...

"I like to sing-a ..."

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@starrion:


"Simply because you financed the phone when you signed the contract."


No this is a contract renewal. The handset should have been more than paid-off by the first contract.


I wanted to switch plans but keep the now paid-off phone. They said if I switched it would be a two-year contract with an ETF, even if I didn't take a new handset. That's what aggravated me.

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@RecordStoreToughGuy_Has$240WorthOfPuddin': Communion scared the shit out of me until I found out about sleep paralysis and hypnagogic hallucinations. Then I started having them. Frankly, I'd rather have the aliens.

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@jamar0303: Try downloading a YouTube video documenting Tibetan monks being assaulted for their religious beliefs over there or schools collapsing due to politically-connected contractors cutting corners, and get back to us, okay?

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I predict that nothing will change, because shitty customer service doesn't really violate any laws. And when was the last time corporations actually got punished for this antitrust kind of crap? They don't DO anything to them.

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@Hil-fish: For me it's AT&T. I really wish I could find decent GSM coverage elsewhere. T-Mo sucks.

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@humphrmi: Not the constitution, the Sherman Anti Trust Act of 1890.

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@Adhominem: Then the price should remain static at the very least. Bandwidth is cheaper than ever, and yet data is PAINFULLY expensive now. I remember when CSD existed. It ran off minutes, and that sucked, but even then, it did just what it needed: E-Mail. Basically, 3 minutes every hour for e-mail checking. Now it's $30 a month.

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@Révolution: And requires a contract. I'd happily pay $15 or $20, IF they didn't require a contract to get a data plan.

AT&T has a $15 data plan, dependent upon you having a contract.