Posted on October 16th, 2007 in Business & Industry, Gadgets | No Comments »
As a life long free market capitalist, I have to question just how screwed up an industry has become when I cheer the thought of new government legislation to “regulate” business practices. Yet that’s exactly where US consumers find themselves as state and federal representatives consider vesting a “Cell Phone user’s Bill of Rights”upon mobile providers.
Whether its a great awakening of consumer awareness that we have been pushed too far by greedy monolithic wireless carriers, or the feverish crescendo of pain users are expressing over all things iPhone – Politicians are taking an interest in the idea of new wireless regulations. As state houses and capital assembles around the country begin to debate measures to protect constituents you can be certain that cell providers are watching with great interest.
How did we get here?
While it feels like it’s been an over night transition, this nexus of user frustration toward wireless companies and said companies’ desires to bulk up their bottom lines has been coming for some time. Think back – circa 1990s; In the past cell phone adoption in the US was viewed as a business expense or the purvey of high-end “luxury” and “geek” markets. Subscriber penetration was lower, but usage costs were generally higher due to heavily metered plans and punitive roaming polices. Fast forward to the present, how the marketplace has changed. Cell phones in North America are so pervasive that many consumers opt to cancel traditional residential land-lines, preferring instead the convenience of full-time mobile usage. Team home phone replacement with ubiquitous family plans and it’s normal now to see such proliferation of phones that practically every eight year old is talking/texting away.
This drastic increase in the number of mobile devices has done more than just multiply the number of area codes we need, it’s been a financial field day for likes of Verizon, AT&T, Sprint, T-Mobile, etc. Thanks to rapid user growth and the addition of consumer features like ringtones, gaming downloads, music, and texting carriers have snared the masses, now how to keep and fully exploit these subscribers?
Hello, some service would be nice!
Has anyone every truly had a positive customer service experience with their provider? Really I would like to know, seeing as anytime I walk into a local company store to get help with my device or plan, I usually see the heard of bewildered looking, discontented people waiting in a 30 minute plus line to talk with a rep and turn around and walk out. Later, when I still need help and call the tech support group – and wait that same 30 minutes – I get someone ten time zones away struggling to read an English “support script” that does not address my issue, only to be told that I will need to be elevated to second level support and they will call me back in 4 hours. Or perhaps you need account billing help to get clarification on erroneous charges you have on a statement, only to be told those are not false charges but some “fee” that was not clearly disclosed at the time of purchase.
The examples go on and on, but the problem is obvious and remains unchanged – Cell providers really don’t care. Which leads us to our next point: do you think you are going somewhere?
“Help – I’m locked in.. and I can’t get out!”, of my plan that is.
Boat owners are familiar with the axiom – The “best day of your life” is both the day you buy your boat and the day you sell it! The same might very well be true of the relationship many have with their cell providers. Arguably, the single greatest factor contributing to mobile user angst these days is the discovery that you’ve been locked in. Locked in by a multi-year contract with early termination fees or the realization you posses a handset that is locked exclusively to one provider.
But these business practices should come as no surprise, as they serve the wireless companies’ best interest. By locking users into both their network and contract they mitigate subscriber churn. Considering the much heavier saturation of current US subscribers The last thing your carrier wants is for you be able to actually change or terminate service.
An Intervention is Required
So then the dye has been cast and the course certain – A federally mandated cell phone consumers bill of rights is destined to be made law? Not so fast. As with all things in politics a simple issue can quickly become clouded.
While consumers certainly have reason to be all worked up, demanding change is a good start, but what should the remedy be? Here are a few key points any Wireless Telco Act should tackle.
1. Say what you mean, and mean what you say. Whether is is confusing contracts or sales/service reps that change their story depending on who you talk to – it needs to be clear, concise and concrete.
2. End phone subsides and the contracts that result. This is good for carriers, manufactures and consumers: Carriers get the cash upfront for the phone, Handset makers don’t have to sign exclusives with just one provider, and Consumers, having already paid for the phone out of pocket, are not subject to a contract or termination fees.
3. Ensure Phone portability – not just number portability. As much as possible the great divide of phone and network lockins needs to stop. If I buy a CDMA network phone from Sprint and want to switch to Verizon I should be allowed to do this. The same would be true for say AT&T and T-Mobile (Yes, I’m talking about the iPhone!)
4. Simplify Pricing/Service Options. Enough with the endless options already! Some strides are being made in this area by MVNOs like “MetroPCS” with a flat price for all that calls/txt/data you want at one price. It’s not that you can’t have tiers of service, but most consumers are just confused with billing plans and complex up charges.
It’s better to be Feared, then Loved.
I’m not sure how Machiavelli would have come down on the question of a mobile users bill of rights, but to barrow from him, his concept of using fear as a motivator might be just what wireless providers need – and that fear is being provide courtesy of pending legislation. Maybe that fear of action is just what the market needs. Let’s face it, codifying this type of legislation will take time – time that carriers have to enact positive changes.
This is the most likely outcome; Congress will stall long enough for a consortium of carriers to sign onto a self policed “Bill of Rights” – not an all bad outcome, as long as there is meaningful change in the practices as outlined above.
“I can’t hear you – must have a bad connection”
Other option is that the industry will continue to turn a deaf ear to the problem and ignore their customers. Bleak as this may sound it’s not unprecedented; look at the upheaval in the long distance market due to disruptive technologies like VOIP.
This much is certain, customers are frustrated and if action is not taken more and more will resort to “hacking” solutions like we have seen with the iPhone. But that’s a story for another column…