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Sunday, March 17, 2013

Disruptions: Stuck With a Carrier for the Long Haul

If dating were like the cellphone industry, you would have to sign a contract when you entered a relationship stating that you would remain monogamous for two years, even if you wanted to break up. That’s what cellular carriers have pulled off by successfully lobbying for a recent government ruling that you cannot take the phone you paid for and switch to another provider.

It’s the latest reminder that owning a cellphone on one of the biggest United States providers can sometimes feel like a relationship you can’t get out of. Time and again, in the minds of many customers, these companies take advantage of us and there isn’t much we can do about it.

Srinivasan Keshav, a professor at the University of Waterloo, in Ontario, who studies mobile computing, has found that cell carriers make more than a 4,000 percent profit on text messags. Sending a megabyte of text messages over the cell network costs customers roughly $1,500. What does it cost carriers Close to nothing, as texts piggyback on other data transfers, including voice calls. The carriers combined make billions of dollars a year in fees on texting alone.

Then there was AT&T’s decision in mid-2010 to kill unlimited data plans on smartphones for new customers. As Felix Salmon of Reuters wrote at the time, “AT&T prefers to make life harder for its customers, if that’s going to give it a little bit more money.” For those who kept their unlimited plans and use larger amounts of data, like me, AT&T sometimes slows the data connection on its network.

As my colleague David Pogue wrote in 2009, carriers force people to listen to a 15-second message with instructions on how to leave a voice mail message before they can actually leave one, and charge them for that time.

CTIA, the wireless industry trade group, defended the latest move by wireless companies, saying that prohibiting people from taking their phones with them, a practice known as unlocking, would help protect carriers’ investments in subsidizing new handsets, and ultimately benefit customers.

“What we’re trying to do is good for customers â€" it is just not immediately apparent to them yet,” said Jot Carpenter, CTIA’s vice president for government affairs. He said cell carriers were trying to solve two issues: stopping people from selling stolen unlocked cellphones and helping keep down the cost of handsets by ensuring that phones that have been subsidized by carriers return their investment.

But members of ongress, the Obama administration and the Federal Communications Commission see it differently. Senator Patrick Leahy, Democrat of Vermont and chairman of the Senate Judiciary Committee, and Senator Charles Grassley, Republican of Iowa, introduced a bill this month to overturn the ban on letting customers unlock their phones. The White House has said it is “common sense” for people to be allowed to do so. Julius Genachowski, the F.C.C.’s chairman, said the ban “doesn’t pass the common-sense test.”

Harold Feld, senior vice president at Public Knowledge, a nonprofit company that focuses on information policy, likens the phone companies to airlines, which have reduced the cost of flights but now charge passengers to check bags, board early or eat a meal. “The difference, though, is that with airlines, once you are finished with that flight, you can choose to never fly with them again,” he said.

Mr. Carpenter o! f CTIA sa! id that if customers were unhappy, they could easily switch providers. “There’s a tremendous amount of choice and competition in the industry,” he said.