Verizon wouldn't lie to sell phones -- would they?

In previous posts, I have been unkind to my local-monopoly Internet service provider Time Warner cable and the US ISP industry in general. I've also been unkind to Verizon FiOS in their battles with Netflix and criticized their "gentleman's agreement" to abandon fiber to focus on wireless connectivity, leaving me at the mercy Time Warner Cable.

Those stories all had to do with landlines -- what about Verizon mobile? My wife had an unlimited account with a reseller of Verizon mobile service (a "mobile virtual network operator" or MVNO). She no longer needed the unlimited account, so decided to switch to Verizon.

This was shortly before the new iPhones came out, so she wanted to keep using her old phone for a month or so and, since she had been using it on the Verizon network, she assumed it would work after shifting her account from the MVNO.

To be safe, I went online and had the following chat with a Verizon salesman named Brandon:

Chat transcript -- click image to enlarge

As you see, I gave him the phone's mobile equipment ID (MEID) number and he said it was incompatible with the Verizon network and offered to sell me a new phone. I pointed out that the old phone had worked on the Verizon network for years and he suggested that it may have been blacklisted or have the wrong antenna -- like AM versus FM radio. He elaborated, saying it might be compatible with some, but not all, of their network or perhaps my wife had been roaming for five years.

Maybe the phone would not work somewhere on Earth, but it has worked everywhere my wife has been in the United States and abroad for the past five years. (She is not an early adopter :-). Here are the specs (MEID 990001106522642):

I am not a mobile phone geek -- Is there something that would render the phone incompatible with Verizon mobile service?

We ignored Brandon's warning and opened a Verizon account -- the phone worked fine (in southern California) until it was replaced with a new iPhone.

My guess is that Brandon was just telling me what he saw when he queried Verizon's database, so he was not lying. But is the Verizon compatibility database accurate and, if not, is Verizon lying in order to sell new phones? (This reminds me of the Volkswagen smog check shenanigans).

-----
Update 10/10/2016

Let's talk about customer service.

In spite of Verizon saying it was incompatible with their network, my wife has been using her old iPhone 4 on their network without problems. When she transferred her account to Verizon, they said she had to sign up for a billed (post-pay) account, but could then switch to an automatically-charged, pre-paid account (to get a higher data cap) whenever she wanted to.

She did that two days ago. Doing so required that she speak on the phone with three different Verizon employees -- a support person, a sales person and an account verification person. There were long waits on hold before each of those conversations and she had to explain the situation to each of the people -- there was evidently no transfer of information between them. The entire process took well over an hour.

I am posting this for two reasons:

1. Verizon has sold their FiOS landline service, but it was the lowest ranked company in the lowest-ranked industry (Internet service providers, ISPs) on the American Customer Satisfaction Index before the sale. I've not seen a ranking for mobile ISPs, but based on this experience, I would expect Verizon to look bad.
2. One frequently hears complaints about poor service from bureaucratic government agencies. Government agencies are large organizations with monopoly power. ISPs are also large organizations in monopoly or oligopoly markets. A large, private organization in a monopoly or oligopoly market is nearly as likely to provide poor service as a government agency.

-----
Update 10/15/2016

The customer-service saga continues.

I made two payments on my wife's pre-paid account. Perhaps because she changed her account from post-paid to pre-paid, Verizon failed to credit one of the payments and does not seem to realize that she is now post-paid and should be getting a higher data cap.

I tried to clear it up by going to the "My Plan" page on the Verizon Web site, but the page was temporarily down:

That was 25 hours ago. The page is still temporarily down.

I also tried to clear this up with a phone call or chat, but could only find sales pages on their Web site. (I got the phone number last week from a Best Buy store clerk).

Verizon is making the folks like the IRS or Department of Motor Vehicles look good.

5G mobile update from Ericsson and Samsung at Mobile World Congress (MWC)

5G mobile communication is coming and prototypes are being developed along with demonstrations. (Remember the saying that projects had to "demo or die")?

Here are a couple of 5G prototype demos:

Samsung transmission speed demo -- 7.5 gbps standing still and a 1.2 gbps in a car going 112 kph:



Erricson demonstrates seamless hand-off between LTE and 5G:



and they brought their virtual reality, remote control excavator with them to MWC:



The final products will probably not be as fast as these prototypes, but they will eventually cost about the same as today's mobile radios.

Both Samsung and Ericsson are talking about initial deployment around 2020, but general rollout and ubiquitous adoption will take many years after that. (This is one technology in which developing nations, which are generally more mobile reliant than developed nations, may somewhat narrow the digital divide). Furthermore, there are no 5G standards, and you can bet there will be more than one.

<dream>
Wouldn't it be nice if there were a global 5G standard -- everyone using the same license free spectrum and protocols -- your phone moving seamlessly between nations and carriers -- cars that were compatible with instrumented roads everywhere ... like WiFi ...?
</dream>

Awake again -- Maybe I will get a Verizon 5G phone for use in the US around 2022.

By that time, out mobile devices will be 10-20 times as powerful and there will be a lot of "things" connected to the Internet. What new applications will we find for this high-speed, low-latency wireless connectivity?

European 5G vision spelled out at MWC

A European Union memo predicts that by 2020 there will be more than 30 times as much mobile internet traffic as there was in 2010 and that traffic will reflect the massive growth in machines and sensors using the Internet to communicate -- the "Internet of things."

They predict that 5G won't just be faster, it will bring new functionalities and applications with high social and economic value in the following areas:

• eHealth
• Connected homes:
• Secure transport
• Smart grids
• Entertainment

The memo concludes with links to several 5G research projects in which the EU has invested €50 million, a Mobile World Congress speech on the Connected Continent by Neelie Kroes, Vice-President of the European Commission responsible for the Digital Agenda and the Digital Agenda Web site.

-----
Update 4/8/2014

UK and Germany to cooperate on 5G. The UK government signals a push on ‘5G’ mobile technology -- after falling behind on 4G mobile, they hope to catch up with 5G.

Ting is looking better -- will allow customers to bring Sprint phones

In a previous post, we described Ting.com, an MVNO (mobile virtual network operator), that resells access to the Sprint cellular network at dramatically reduced prices with no contract. My one complaint was that you could not bring your own phone to Ting. You had to buy a new phone from them, and they offered a limited selection.

Well, that restriction is starting to fade away. Ting announced that during the next quarter, they will begin allowing customers to use their own Sprint phones. That means the selection of new phones will increase dramatically and old Sprint phones will be welcome as well. They point out that, "at first", there will be restrictions -- the iPhone, BlackBerry push to talk and a small list of specific handsets won’t be included.

If you check Ting's prices, you will find significant savings over the major cellular companies. Now that you can bring your old Sprint phone or choose from a wide selection of new phones, Ting (and other MVNOs) seems like a terrific deal for those in areas with good Sprint coverage. The deal is even sweeter if you live in an area which is or will soon be covered by Sprint LTE.

I don’t know how Ting does it. Perhaps Sprint’s wholesale price is very low or perhaps Ting is less greedy and more efficient than the major carriers. Somehow, it offers a better retail deal than Sprint or any of the others. Maybe it is just that it charges more rationally than its competitors. Since 2009, U.S. data traffic has exceeded voice traffic and the gap is growing rapidly, but the cell phone companies still gain most of their revenue from voice.

The cellular and cable companies seem to have arrived at a "gentleman's agreement" to reduce what little is left of Internet service competition. The cellular companies are getting out of the land line business and the cable companies are getting out of the mobile business.

Will the MVNO's like Ting succeed in disrupting the mobile market?

Virgin Mobile gets the iPhone -- is the wireless oligopoly starting to fade?

AT&T has articulated its vision of a concentrated wireless market with few carriers that control a lot of spectrum. They foresee a gradual, controlled shift from voice minutes to all-data during the next few years, and hope to charge enough for that data to maintain carrier revenue and profit.

But one of those carriers, Sprint, seems to be doing something radical -- competing.

Sprint is competing by partnering with mobile virtual network operators (MVNOs) that sell access to the Sprint network. Users have to buy their phones up front, without subsidy, but they get flexible, cheap voice and data plans in return. The MVNO gets less revenue per user than AT&T or Verizon charge, but I assmue they and Sprint are profiting or they would not do it.

The net result is that wireless is cheaper and customer bills more accurately reflect the fact that voice calls, text messages and data are all bits.

Since the user pays full price for a phone, the MVNOs do not require two year contracts, but they lock you in by insisting that you buy your phone from them -- you cannot bring your own. Phone portability should improve with market pressure and the widespread adoption of fourth generation cellular technology.

MVNO phone selection is limited, but that may be breaking down. Sprint recently picked up the iPhone and today they announced that Virgin Mobile, one of their MVNOs, would also get the iPhone. I suspect that eventually Sprint MVNOs will offer all Sprint phones.

Virgin is not Sprint's only MVNO. One, Ting, has effectively done away with the concept of tiered service -- you pay for what you use. Virgin and Ting are early, but there will be others. One that is in beta, Republic Wireless, hopes to charge even less by automatically substituting WiFi for cellular connectivity whenever possible.

AT&T has their ideal vision of the future, and I have mine -- the ability to own my own phone, use it on anyone's network and only pay for the bits I send and receive.

Wishful thinking -- might Ting, Virgin America and T-mobile trigger wireless competition?

Ting pricing example, click to read

Speaking on a panel at the Geek Wire Summit in Seattle, T-Mobile Chief Marketing Officer Cole Brodman said that bundling subsidized mobile phones “distorts what devices actually cost and it causes OEMs, carriers — everybody to compete on different playing fields.” He went on to say that if he were "king for a day," he would do away with subsidized phones.

When asked why T-Mobile did not do it, he said that consumers are used to low phone prices and would not switch even if the long run cost, including usage contact rates, were less.

Well, he may be right, but ting.com is betting that if an unbundled plan is cheap and flexible enough, people will be willing to pay big bucks up front for a phone. How does, say, $62 per month for 2 phones, 500 voice minutes, 1,000 text messages and a 2 gigs of data sound to you? That is a tentative plan I priced out using Ting's rate calculator (see the image above).

But wait, it gets better. There is no contract -- service is month to month. How about their rate plans? There are 216 possibilities. Want more? Ting doesn't roll unused minutes and data over, it gives you cash credit on next month's bill if your actual use is below your plan. What if you exceed the limits of your rate plan? The rate plan is tentative, not hard and fast -- you are bumped up to the next level with not penalty charges. In other words, your bill is a function of your actual usage, not your plan.

It's not all rosy. The phones aren't cheap. For example, a Samsung Galaxy SII 4G is $465, but Ting's billing plans and rates can make up for a lost phone subsidy pretty quickly and you won't be tempted to throw away your phone every two years. For the time being, Ting offers only a few phones and you can't bring your own -- you must buy one of theirs. Another possible glitch -- Ting's carrier is Sprint, and they might have poor coverage in your area.

Virgin Mobile has launched an ad campaign for their unlimited data service. For $35 a month you get 300 minutes of voice and unlimited 3G data and messaging with no contract. Like Ting, they are on the Sprint network in the US, but their 3G phone selection is less impressive.

Might Ting and Virgin Mobile disrupt the mobile phone market? Maybe T-Mobile will jump on the bandwagon. Might we eventually see competition in the mobile market? Stay tuned.

Irony: Perhaps the Chinese can bring competition to the US wireless market

The US Congress tried unsuccessfully to introduce competition into our telecommunication industry with the passage of the 1996 Telecommunication Act. Congress and the FCC were no match for the incumbent telephone companies with their lobbyists and legal staffs, and their efforts were defeated.

Might the Chinese have a better chance than the US Congress and FCC?

China Telecom intends to enter the US market as a "virtual" mobile network operator. They will partner with a US carrier and plan to sell handsets and services to Chinese Americans and to students and tourists who travel regularly between the US and China.

Donald Tan, president of China Telecom Americas, said they may even consider building or buying their own wireless network in the US -- "If the service is growing fast, maybe we can set up our own infrastructure. The money is no big problem for us."

Of course bastions of capitalism like AT&T and Verizon will do their best to stop Chinese competition. This was foreshadowed last month, when the US Department of Commerce excluded Huawei from bidding on a national emergency network project.

4G cellular is expected to roll out faster than 3G did

We have discussed three generations of cellular technology, and the fourth is beginning to take shape.



It took nearly six years for 3G cellular to reach 100 million subscribers world wide, but market research firm Pyramid Research estimates that 4G Long Term Evolution (LTE) technology will grow faster. They expect a compound annual growth rate of 404% from 2010 to 2014, with 136 million subscribers by year-end 2014.

Note that Pyramid Research expects LTE to rapidly surpass mobile WiMAX.

At 100 Mbps, LTE will not be limited to cell phone service, but will be used for fixed, portable and mobile Internet access.

If you live in a large city in a developed nation, you might look forward to LTE or Mobile WiMAX by 2011. Others will have to wait. (Some for a very long time).

Is 3G cellular currently available throughout the city you live in? Throughout developing nations? What applications and mobile devices do you foresee for 100 Mbps mobile connectivity? What changes may occur in the cellular companies business and billing models?

Navteq versus Tele Atlas maps

We discuss Google Maps, and the mashups Google has encouraged people to build. Initially, Google used map data from a company called Navteq, but Nokia acquired Navteq, and Google has now switched to Tele Atlas for their maps.

Note that the mapping services are not identical. Microsoft uses Navteq for their Live maps, so we can compare their map of the CSUDH campus dorm area with Google's Tele Atlas map. As you see, Navteq (right hand side) maps and labels Unity Drive and Hillside Court and they show the street addresses on Central Avenue.
This is not to imply that Navteq maps are better everywhere. Both companies have crews constantly driving the routes and updating the maps, and both invite users to submit changes online. Competition between Google and Nokia, which sells 40% of mobile phones, may lead to differentiation in map features and completeness.

Is Navteq or Tele Atlas more accurate in the neighborhood where you live? If you know of a change -- say a street becoming one way -- would you inform either Tele Atlas or Navteq?

(Thanks to Ron Jimenez for suggesting this post).

Truephone -- mobile Skype (almost)

We have seen that cellular network operators control applications and devices in order to preserve their business model, which centers on selling service like SMS messages and phone call minutes rather than unfettered Internet access.

But, newer phones with both Wi-Fi and cellular radios can run VoIP software when using their Wi-Fi connections to the Internet.

Consider, for example, Truephone.com. Truephone software runs over Wi-Fi connections on the Apple iPhone, iPod Touch and other phones. As with Skype, calls to other Truephone users are free, but they charge for calls to landline and mobile phones. Truephone's rates are much higher than Skype's. For example, the per minute rate from the US to a Chilean mobile phone is $.70 on a Truephone while Skype is only $.243. The difference for landlines calls is much greater -- $.68 versus $.024.

Regardless of their rates, Truephone illustrates two points we have discussed: innovation occurs rapidly on "dumb" end-to-end networks and the Internet is a highly leveraged platform on which to develop businesses.

Truephone CEO Geraldine Wilson recognizes these points in the following quotes from a BBC article:

"There are a slew of new features we're rolling out for the iPod Touch that will let users call landlines, Skype users or send instant messages. We're talking weeks, not months, before these go live."

and

"We've decided to focus on devices that are wi-fi enabled and have an apps-store. For the consumer, there has to be an easy way of downloading an application."

They are innovating rapidly and will "outsource" distribution and sales to the Apple and Google Android stores.

Do you currently use your cell phone as an Internet access device? Would the ability to make Truephone calls convince you to do so?

Anyone might be a reporter with Twitter

We have seen that portable Internet access devices capable of streaming live video are becoming available. Video cameras are not yet ubiqutous, but portable devices capable of micro-blogging with Twitter are now quite common.

Here is a sad example of the use of Twitter during the terrorist attack in Mumbai.

What would be the implications for news reporting, police work and security if most people carried location-aware, mobile Internet access devices capable of Twittering, uploading pictures and streaming video?

Encouraging Android and iPhone application developers

We discuss the importance of building communities of users and of developers.

Google and T-Mobile just announced the availability of the first phone running Google's Android operating system. Android is strategic for Google because it is bundled with their applications, and they are entering the mobile Internet access market along with the Apple iPhone.

Both companies are trying to attract application developers for their platforms. Apple has established a $100 million venture capital fund for start up companies with ideas for interesting applications and has an iPhone Developers Program where developers find tools and technical and business information.

Google also understands the importance of developers to the success of Android, and they have allocated $10 million for awards for innovative applications. The first set of winners has been selected, and the second round of competition is under way. The ten top applications in the first round are here.

Apple has created an online store to help developers sell and distribute their applications, and Google has announced their intention to do the same for applications that run on Android phones.

To encourage development, Apple distributes free applications at their store, and charges a reasonable commission on commercial applications -- they hope to profit by selling more Apple hardware. Google will be selling advertising, not hardware, so they hope their store will encourage both software developers and handset manufacturers to adopt the open-source Android platform.

Finally, and this is highly speculative, Android is Google's operating system for mobile Internet access devices -- might they one day release a full-scale version for the desktop, competing directly with Microsoft Windows, Linux and Apple OS X? Microsoft and Apple adapted their desktop operating systems to hand-held devices -- might Google be planning to adapt their hand-held operating system to the desktop one day?

Is Google truly competing with Apple? Does it help or hurt Google if someone buys an iPhone instead of an Android handset?

Clearwire, Sprint, Intel and Google shoot for mobile Internet access

We discuss mobile connectivity. Today, third generation cellular is the most common means of mobile connectivity, but wireless communication using WiMAX technology is becoming available for both fixed and mobile applications.

Sprint and Clearwire have planned WiMAX deployment for some time, but they have now formed a new company and taken in strategic partners Intel and Google. The new venture, also called Clearwire, plans to be available to between 120 and 140 million people by 2010. That is only about 40 percent of the US, but it is significant.

Intel is a leading WiMAX hardware vendor. Today's laptops usually have WiFi radios for local area connectivity, and Intel wants tomorrow's laptops to also have WiMAX chips for wide area connectivity. Google is interested in mobile computing and wants their applications, Youtube videos and ads to be on every cell phone and mobile Internet access device.

If you could get high speed mobile access using a handheld device like an Apple iPhone, what would you use it for? How much would you be willing to pay for the mobile service? Would you want your phone to be separate from your Internet access device?

Clearwire hopes to be available to 40% of the US population by 2010 -- which areas will get service first?

Soon we will have Internet video cameras in our pockets

Video is now a common Internet data type and mobile Internet access devices are becoming available. You can see the convergence of these trends in this video of a test drive of a Tesla electric car:



The audio and video quality is poor, but it was shot using a Nokia N95 cell phone camera and streamed on the Internet as it was being recorded.

(The video is worth watching in its own right -- Tesla's founder discusses their technology and plans for the future while taking a joy ride).

We saw the Apple iPhone this year, and large phone vendors are now demonstrating their own mobile Internet access devices. Soon portable video cameras will be ubiquitous.

Ubiquitous, Internet-connected video cameras will be used for many business and personal applications. Will they also affect politics and government? Would it have mattered if the students at Tienanmen Square or the recent Tibetan demonstrators had been online? How many athletes and spectators will be online in China during the upcoming Olympic Games? How many people will be online in Iraq next year?

Mobile Internet access is looking up

We have discussed mobile device form factors. We still don't know what form factor the public will choose, but we just got an indication. Apple's iPhone is a better Internet access device than any previous cell phone, and, since it was introduced, Google has seen 50 times more searches on the iPhone than any other mobile handset.

Virtually all phone manufacturers are working on touchscreen devices similar to the iPhone, and many of them will use Google's Android operating system and application bundle.

Phone manufacturer Nokia is convinced the public will want mobile Internet access. They recently purchased NAVTEQ, the street mapping company used by Google Maps and others. Olli-Pekka Kallasvuo, Nokia president and CEO, believes GPS chips will be as common in mobile phones as cameras. He says "navigation is one of the foundations of the context-aware mobile phone. We believe it will be as important as voice capability was 20 years ago."

IPhone users like to access the Internet, but that does not prove the billions of simple cell phone users will feel the need to convert. Is mobile Internet access important to you or are you satisfied with your current cell phone? If you had a mobile Internet device, what would stop you from running Skype or another VOIP program instead of using cell call minutes? Check these hypothetical auto navigation videos from NAVTEQ -- would you use these applications?

Real time location tracking

We discuss location-based applications, and the US Federal Communication Commission has mandated that all cell phones be location-aware for emergency 911 service. Carriers are working toward that goal, and eventually, all cell phones will be equipped with a GPS (global positioning system) receiver or use other technology to record their locations, enabling real time monitoring.



Tim Hibbard illustrates real-time monitoring by carrying a GPS-equipped phone in his car. His location is recorded every 15 seconds, and plotted on Google Maps and Google Earth. His travel routes are also stored on a server so one can see where he has been in the past. For example, on August 12, 2006, Tim traveled around his old college town, Lawrence, Kansas:



Real time GPS could be used to monitor fleets of delivery vehicles or taxis, children, pets, criminals under house arrest, etc. Does this capability raise concern over privacy?

Video of a Google Android cell phone prototype

We have seen that a dumb, open network encourages investment and hardware and software innovation. We have contrasted this with the telephone and cellular networks, where application and hardware innovation are controlled by the network operators. We've also followed Google's efforts to open the cellular network by possibly purchasing spectrum and by developing and distributing Android, an open source mobile phone operating system bundled with Google applications like maps and mail.

Google has released some videos demonstrating prototypes of Android phones. For example, the following video shows a touchscreen phone reminiscent of the Apple iPhone.



(You can find other Android-related videos at the Android Web site linked to above or by searching on Youtube).

The most important feature shown in the video is not clever hardware or software -- Apple already did that with the iPhone -- but the open platform. The video begins and ends with Google co-founder Sergey Brin inviting developers to build Android applications. Based on his Internet experience, he feels that openness will be critical to the success of Android, and has kicked things off with a ten million dollar contest for application developers.

If he is right, third party applications will spur Android sales, and each Android phone sale will spread Google applications -- and ads. Not satisfied with being on your desktop, Google also wants to be in your pocket.

After viewing the prototype video, can you think of applications you would like to have on your next cell phone? Would you be willing to watch targeted advertisements in return for free cell phone service?

Will business customers force cell network neutrality?

A recent Information Week article criticizes the US cell phone industry for disabling phone features, restricting phones to one network, restricting Internet access, using incompatible communication technologies, and poor quality of service and coverage. For example, the article says that "by some estimates, nine out of ten cell phones in the US are sold by carriers, nearly reverse the ratio in other countries." Compared to the cell companies, wired Internet service providers are good guys and network neutrality advocates.

That is all bad news, but the article maintains that since mobile access is becoming very important in business, the cell companies might be pressured into reform. Consumers take whatever the operators offer, but business will not.

We spoke of this topic in an earlier post on Tim Wu and efforts to obtain wireless net neutrality.

In some nations, cell phones and cell service must be sold separately -- can you find which ones?

Tim Wu on wireless network neutrality

Skype recently petitioned the FCC to open access to cellular networks in the United States. That petition was based on a study by Tim Wu, a law professor at Columbia University. Our class notes cover the Carterfone case which opened the wired telephone network, making the end-to-end Internet possible. Wu feels that a neutral-access cellular network would enable Internet-like innovation and competition on wireless networks.

You can read Wu's paper and see the Skype petition at the New America Foundation. Wu was also interviewed on wireless network neutrality by National Public Radio's On The Media. You can hear the interview (with a rebuttal by an industry representative) or read a transcript at the On The Media Website.