# Wednesday, 28 May 2008

God bless the lawyers. (I never thought I would start a blog post that way.)

The way we buy cell phones in the United States is different than in almost all other major markets. The carriers (AT&T, Verizon, T-Mobile, Sprint, etc) control the market. You can only buy a phone through them and with a service plan attached to it. Not only that but the phone manufactures (Nokia, Motorola, etc) have little control as to what features they can put on the carrier's "version" of their phone. For example let's say that Nokia releases the sexy new Nokia 123456 phone. This phone has integrated bluetooth and a cool wifi feature. AT&T will sell you the 123456 phone without the wifi and Sprint may sell it to you without the bluetooth feature. You can't buy the "normal" Nokia 123456 anywhere in the United States, you have to check eBay or travel to Asia or Europe and buy an "unlocked" version (more on that in a minute.)

Europe, Asia, and the rest of the world does it differently. You can buy the Nokia 123456 at a Nokia outlet, a retail shop like Radio Shack or Circuit City, or online. It is unlocked, meaning that you can put in any GSM chip from any service provider. (By contrast US phones are locked, my AT&T phone will only work with my AT&T chip. But I can buy an unlocked European phone and put in my AT&T chip, but AT&T won't support the phone, and they get mad at me when I do this.)

So the rest of the world is free and unlocked. This leads to major consumer choice. Consumers change phones all the time and also change carriers quite often. This forces the carriers to compete on coverage, price, service, network reliability, and features (exclusive MP3 downloads, cheap wall papers, etc.) In Europe there is major innovation both at the phone level (unlocked phones have to compete with other unlocked phones) and on the carrier level. This leads to innovation and more consumer choice.

In the United States, we have no such competition. We have an oligopoly. We have expensive plans, crippled phones, and we are tied to our carrier forever. (I have been with AT&T since 1995 and I hate them!) This also explains why at 16,000' on Mt. Kilimanjaro I had service but can't get coverage on 3rd Avenue and 86th Street in Manhattan, a "dead zone" for AT&T, which is funny since an AT&T store is one block away.

In November 2007, this was promised to change. You were suppose to  be allowed to unlock your phone (funny it was illegal up until then to unlock your phone since it violated an intellectual property law).

So what did the carriers do? Take it all to court.

Good news. People started to sue. (Thank God for lawyers! Wow, I said it again.) Under threat of the lawyers, Verizon and Sprint, have agreed to unlock hones after customers have completed their original contract. (Not perfect, but a start.) AT&T and T-Mobile decided to fight on. They took their case all the way to the California Supreme Court and lost. So they appealed to the US Supreme Court.

Good news. The US Supreme Court yesterday sided with consumers. (All those Reagan and Bush arch-conservatives are good for something!) The court declined to review an October decision by the California Supreme Court that  basically cleared the way for a class action lawsuit that will allow millions of California customers to sue the carriers. (The suits also prompted all the carriers to reduce the fees charged to costumers who terminate a contract before it expires. Thank God for lawyers a third time!)

This does not unlock the phones automatically and change the US market to behave just like the rest of the world. But it is a start. We are free from the control of the carriers. Let freedom ring. Bring on the innovation!

PS iPhone users, you can finally get an unlocked iPhone!