Friday, September 12, 2008

Senate Questions Wireless Carries on Rising Text Rates

Here's some interesting info for mobile phone subscribers who send a lot of text messages. According to this article, Sen. Herb Kohl, chair of the antitrust subcommittee sent a letter to the four major U.S. wireless network providers.

Sen. Kohl's letter was delivered to the offices of AT&T, Sprint, T-Mobile and Verizon Wireless. The chair of the antitrust subcommittee wanted the letter to convey his concerns about the doubling of the rates for sending text messages even though the cost involved with sending them remained constant.

Here's the statement released by Sen. Herb Kohl the chair of the antitrust subcommittee:

"What is particularly alarming about this industrywide rate increase is that it does not appear to be justified by rising costs in delivering text messages. Also of concern is that it appears that each of companies has changed the price for text messaging at nearly the same time, with identical price increases. This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace."

The current charge for sending text messages is 20 cents which represents double the messaging rates imposed by carriers three years ago. AT&T, Sprint, T-Mobile and Verizon Wireless serve roughly 90 percent of cell phone users in the US and charge them the same text messaging rate.

The letter sent by Senator Kohl contains a formal request to the network operators asking them to explain the reasons behind the text price increases. Sen. Kohl is also asking AT&T, Sprint, T-Mobile and Verizon Wireless to justify the 20 cents rates compared to the rates of sending / receiving emails and other services.

As of the making of this wireless contract post, the recipients of Sen. Kohl's letter has not yet responded. Well, this is certainly an interesting development. I for one, do not comprehend why the rate for text messages has doubled when the cost of sending them remained the same. It would be interesting to see how AT&T, Sprint, T-Mobile and Verizon Wireless respond to this letter. That is, if they will offer any response.

Friday, September 5, 2008

Standardized Billing System Might Solve Third-party Services Struggles

Here's an interesting wireless contract scoop. According to this article, Mobile phone carriers are trying to find ways to gain more control their third-party content partners. Third-party content is a part of most mobile phone contracts. Let's delve into this story.

Apparently, carriers like Sprint have been finding ways of dealing with their partners. Sprint for example have have warned their partners that they will forfeit their profits and lose their short codes if they continue to violate Mobile Marketing Association guidelines. Some Mobile Marketing Association guidelines violations involve failure to report billing errors and high refund rates. This move Sprint has encourage other mobile phone service providers to make similar warning to their third-party partners.

But why are the carriers trying to control third-party providers? Well, the main reasons seems to be the increasing complaints in the form of lawsuits from consumers and advocacy groups. All the major carriers and content-subscription service providers have been targeted by consumer advocacy groups.

Mobile phone carriers are also concerned about the reaction of customers to the incompetence and deception of some third-party providers produce. These unsatisfactory performance may cause the carriers to lose customers. Complaints about poor third-party also increases expensive calls to customer-service centers of mobile phone carriers.

There have been some suggestions that a standardized mobile payment platform will be a solution to the problems associated with third-party providers. A standardized mobile payment platform may also ease some the m-commerce space problems. However, a system in the US would would require an enormous effort from carriers and service providers. It may take some time before such a system can be implemented in the US.

let's take a look at some wireless contract policies that deal with third-party services. Here's a statement from Alltel's wireless contract:

The Services will be provided either by us or by our third party vendors or contractors. We reserve the right to change or modify the source of any Services provided to you without notice.

And here's the statement form AT&T's contract:
Third-party content or service providers may impose additional charges. Policies regarding intellectual property, privacy and other policies or terms of use may differ among AT&T's content or service providers and you are bound by such policies or terms when you visit their respective sites or use their services. It is your responsibility to read the rules or service agreements of each content provider or service provider. Any information you involuntarily or voluntarily provide third parties is governed by their policies or terms. The accuracy, appropriateness, content, completeness, timeliness, usefulness, security, safety, merchantability, fitness for a particular purpose, transmission or correct sequencing of any application, information or downloaded data is not guaranteed or warranted by AT&T or any content providers or other third party. Delays or omissions may occur.

Tune in to this blog to know more about wireless contracts and related topics.