Remarkably Bad Consumer Protection at the FCC

 Wireless carrier deception and outright violations of FCC rules and regulation should not come as a surprise.  No wonder consumers hold AT&T, Comcast, Verizon, and TMobile in low esteem. They accrue billions in profits thanks to lax antitrust enforcement, FCC reticence to sanction carrier deceptions, and an apparent inability to require wireless carriers to comply with longstanding rules, including truth in billing, the right of consumers to activate used wireless handsets, and market assessments that ignore inconvenient truths about the lack of effective competition.

 My blood boils at the numerous instances that U.S. wireless carriers do not offer globally competitive rates both wireless service and handsets in the world. See https://www.billshark.com/blogs/u-s-mobile-plans-expensive; https://voicenation.com/resources/general-resources/where-around-the-world-are-people-paying-the-most-for-their-cell-phone-bill/; https://themarkup.org/2020/09/03/cost-speed-of-mobile-data-by-country.

Apparently, senior FCC officials do not travel abroad.  If they had, they would see something ubiquitous outside the U.S.:

See: https://londoncheapo.com/technology/uk-sim-card-options-london/

Contrary to cherry picked data provided by both the FCC and wireless industry trade, associations, wireless rates in the U.S. are not particularly cheap, compared to most other developed countries, and these already high rates are rising, well in excess of general inflation measures. Compare https://www.ctia.org/the-wireless-industry/infographics-library; with https://www.whistleout.com/CellPhones/Guides/average-phone-plan-price.

 Part of the problem lies in the persuasiveness of endless advertising by the carriers touting the bundling of wireless service with so-called “free” handsets.  Few consumers do their homework to detect the bait and switch.  See https://finance.yahoo.com/news/cheaper-mobile-plans-aim-dislodge-141119809.html.

 Not Free, Top of the Line Handsets

 With impunity, Verizon currently has a video ad with a Christmas caroler touting the carrier’s generous offer to give subscribers an incredible deal on Apple iPhone 15 handsets.  In the Christmas spirit of giving, the caroler reports that the handset is available “on us.” 

 Should we infer that “on us” means free?  Bear in mind that the FCC, not the Federal Trade Commission, has consumer protection jurisdiction for so-called Title II regulated common carriers, including ventures offering pre-paid and post-paid wireless service.  Apparently, the FCC has no problem with the use of “on us” marketing. 

 In reality, the fine print in the deal provides wireless carriers and resellers ample opportunity to limit the subsidization of handsets. The phone is not free.  Consumers must subscribe to “unlimited” plans costing $75 or more.  The subscribers locks into a multi-year service agreement.

Ineffectual or Nonexistent Merger Review

 The FCC and Department of Justice failed to convince a reviewing court that TMobile’s acquisition of Sprint would reduce competition and raise prices.  The judge bought hook line and sinker the counter intuitive premise that three gigantic wireless carriers, controlling most of the market, better serve consumers than two gigantic carriers battling two smaller, renegade carriers.  Contrary to the Judge’s conclusion and the sponsored researcher’s studies presented at trial, TMobile has relaxed its maverick, competitive muscles making it possible for all three gigantic carriers to raise rates, well above the general inflation level. https://www.lightreading.com/5g/t-mobile-s-premium-pricing-passes-at-t-verizon; https://ktla.com/news/money-smart/t-mobile-planning-to-move-customers-on-older-phone-plans-to-newer-ones/; https://www.cnn.com/2023/03/06/tech/verizon-plan-price-increase/index.html. 

 Subsequently, the FCC did not seem to have any problem with Verizon’s billion dollar acquisition of prepaid, wireless service heavyweight Tracfone; https://www.verizon.com/about/news/verizon-completes-tracfone-wireless-inc-acquisition and TMobile’s $1.35 billion acquisition appears similarly benign. https://www.t-mobile.com/news/business/t-mobile-to-acquire-mint-and-ultra-mobile.

Why would a facilities-based carrier pay over $ 1 billion to acquire a reseller of the carrier’s network?  To promote competition? You bet!

 Barriers to the Use of Second-Hand Devices

 In 1956, the FCC started to establish the right of consumers to connect devices to telecommunications networks, limited only by confirmation that such attachment will not cause technical harm.  This Carterfone policy should allow consumers to acquire wireless handsets on the secondary market and have carriers and resellers permit such use.  It’s not happening in far too many instances.

On several occasions, I have tried unsuccessfully to activate a used handset that a carrier has “locked.”  Carriers can legitimately lock handsets, but only during a time when a subscriber has not fully paid for the device.  Some carriers, including Verizon, state that they voluntarily unlock handsets after installment payments have paid for the device. 

Most carriers and resellers conveniently fail to unlock handsets, resorting to clearly bogus assertions that they cannot determine whether the handset has been fully paid.  Both Mint, soon to be owned by TMobile, and Xfinity Mobile prohibit unlocking with an often impossible to satisfy precondition.

This weekend I acquired a 3-4 year old Samsung Galaxy Note 9, primarily to see if I can use the 128 Gigabyte capacity to store and play music files.  Glutton for punishment, as I sometimes appear, I also wanted to see if my dear friends at Comcast would unlock the handset.

 Of course, Comcast imposed a ridiculous condition: the company would only provide an unlock code the current subscriber provided it can determine that the handset is fully paid.  In my case, I acquired the handset at an estate sale for the deceased former owner of the phone.  He’s dead and I have a worthless handset, currently operating as a paperweight and eventually contributing to the glut of electronic waste.

The Comcast agent only would recite scripts in broken English.  I got nowhere explaining that surely Xfinity Mobile could use the IMEI serial number for the phone to research whether the handset was stolen or unpaid.  Common sense would suggest that a 3-4 year old phone, worth no more than $75, surely could pass the paid for threshold.

Not in Comcast world.  I either could activate the handset on Xfinity Mobile, or acquire a different handset.  So much for my Carterfone right to interconnect a not network harming device.

No wonder why people take the path of least resistance and bundle handsets with service, particularly in light of the enticements: free Netflix, Hulu, Disney, etc. and better yet, handsets “on the carrier.”

Such a deal.