Telcos Are Evil

Two cellphone related stories caught my attention recently which together showed how consumer unfriendly the telcos really are. Both stories involved AT&T, now the largest cellphone network in the U.S.

The first story was actually all the stories covering the upcoming spectrum auction and Google’s announcement that they would bid at least $4.6Billion even if the FCC required the spectrum to be open. They wanted open applications for users, open devices that will work with whatever provider the consumer wants, open services on a wholesale basis, and open networks that would allow third parties to connect at any feasible point. The telcos pushed back but apparently seeing which way the wind was blowing they’ve given lip service to some openness. Their arguments included a statement that the current cellphone market is already competitive. AT&T’s “senior executive vice president of external and legislative affairs” (nice job title) Jim Cicconi was quoted as saying (emphasis mine):

The plan would enable the introduction of an alternative wireless business model without requiring changes in the business models of AT&T and others in what is a highly competitive wireless industry.

I’ll avoid the urge to argue that a business model change is probably a good idea and accept that the model is good.

That then lead me to the story about eMusic and AT&T offering music downloads to customer’s cellphones. As some background, eMusic offers downloads of DRM-free music in MP3 files. Their reputation is that most are indie artists but some commercially popular artists (The White Strips, Paul McCartney) are available. Long-time users may have grandfathered plans but new subscribers pay $30 for 30 downloads/month a month for 3 months. This is $1/song and is the most expensive plan on a per song basis. The most expensive booster pack (on a per song basis) is $6 for 10 songs so the per song price drops for booster packs. Other plans (more songs or longer commitment) cost less per song.

So what does our “highly competitive” industry charge. A monthly subscription is $7.49 for 5 songs. That’s $1.50 per song. Booster packs are available for $7.49 for 5 songs. You got it, no discount for quantity. They promote a “free” download to your PC (in addition to the phone) as a benefit. They actually used the word “free”. Oh yea, if the price bump wasn’t enough the fine print says:

Data transport charges apply to sampling, ordering, browsing and downloading.

So this highly competitive industry charges more for the same service that’s available over the internet. They claim it’s due to higher costs but that can’t be delivery costs since the price doesn’t include connection charges. Perhaps they use their lock-in to pay more for the spectrum, pay for lobbying for rules that protect them requiring in the high expenses and need to charge more to keep the vicious cycle going.

I don’t know how hard it is to move music to AT&T phones (if AT&T had a choice it’s no doubt difficult) but if possible do yourself a favor. If you want eMusic, subscribe to eMusic through their regular subscription, download the DRM-free, play anywhere MP3 files and copy them to your phone.