On Friday, The New York Times published a number of quotes from AT&T’s chief executive, Randall Stephenson, discussing recent changes in the industry. The degree with which he spoke openly is both surprising and welcome, but while it’s nice to see so vividly into AT&T’s workings, the quotes illustrate a company who’s culture is focused on stifling others rather than improving the experience for their consumers.
The choice quote from their article: “You lie awake at night worrying about what is that which will disrupt your business model.” He specifically mentions iMessage and Skype as threats to their revenue stream. He’s right to think so. These products were in many ways a response to the tactics of wireless carriers like AT&T. The larger problem here is that like so many other industries, rather than attempting to foster innovation or improve their product, these carriers are instead trying to extort as much as they can and attempt to block off all those who might disrupt them.
The article notes that, “Stephenson said he didn’t regret the decision to support the smartphone.” On its face, the comment may seem in the carrier’s favor, but it’s really a further example. Certainly with subsidies nowadays, mobile carriers are spending more per phone than they were ten years ago. Countering this, however, are exorbitant eighty dollar monthly bills once you combine voice, data, and texting (or rather, much smaller data at a much higher rate). It could be argued that the quick development and deployment of LTE networks was in the consumers favor, but it was only a matter of beating their competitors by one number in advertisements (that is, 3G to 4G). This is evident by in AT&T’s rollout. AT&T is notorious for its 3G’s spotty service in major cities like New York and San Francisco. Rather than address this, they pushed forward elsewhere.
The carriers are afraid of smartphone manufacturers as well. This seems to be the case with Apple in particular. The iPhone’s sales are so strong, cell carriers are effectively at Apple’s mercy, and that can only mean bending the carriers as they attempt to stifle a better user experience. One report noted that Verizon was pushing Android phones, and likely in part for this reason. The claim is that the iPhone is not yet on 4G (and 4G could eventually mean even higher priced data plans), but more important than this is that carriers still have leverage on Android handset manufactures. They can force manufacturers to and not to include features and software, they can block devices from upgrading to new versions of an OS. It doesn’t even make complete sense.
From the carriers’ perspective, it’s hard to argue against their structure. The major companies have all determined the same value for each service, and as long as that’s the case, there’s no reason to be the one who starts to drive down prices. Sprint offers unlimited data, which is a strong move - most consumers won’t take advantage of that much data, but the package’s value and the feeling of safety from overages makes it worthwhile for the goodwill it will create toward Sprint. AT&T is developing a modern take on the 800 number - a surprising instance of innovation from the company that’s afraid of iMessage. Maybe it won’t take off or even see the light of day, but this exemplifies the type of work the carriers should be doing. There’s no reason to not have wideband audio nowadays, especially with the development of such powerful data networks. On the networks that have capped data, they won’t let you choose how you use it. Tethering has a charge to it, which doesn’t seem right when you’re buying a set amount of monthly bandwidth.
Unfortunately, it’s likely that it will be a slow process as handset manufacturers gain more and more leverage and continue to chip away at the carriers’ imposed restraints. Who will be the first to true VoIP? Apple has already dealt the death blow for text messages with the introduction of iMessage (and if only it were an open protocol…), and backing them up is Facebook with their Messenger app (which is a far more powerful tool as well, providing multiple means of access, group messaging, location data, multimedia, read receipts). Particularly now with the addition of required thirty dollar monthly data plans, something needs to be done. With the way that the carriers thus far have hidden from innovation by clinging to the past, it’s likely that it won’t be from one of the them.