TIME wireless carriers

T-Mobile’s Unlimited Music Streaming Is the Worst for Net Neutrality

Legere
T-Mobile CEO John Legere speaks during an event in Seattle on Wednesday, June 18, 2014 Matthew Williams -- Bloomberg / Getty Images

"Music freedom" looks like a benefit for subscribers, and that's the most dangerous part.

Most things that T-Mobile has done over the last year have made me feel warm and fuzzy inside, but I felt a pit in my stomach on Wednesday when the carrier announced that certain streaming music services won’t count against users’ data limits.

Instead of treating all music services equally, T-Mobile has decided that the most popular streaming music services should get better treatment. If you have a limited data plan on T-Mobile, you won’t come any closer to your monthly cap when using Spotify, Pandora, Rhapsody, iTunes Radio, iHeartRadio, Slacker Radio and Samsung Milk Music.

This is the most insidious type of net neutrality violation, because it’s being pitched as a benefit. Most users stand to gain from the free data, so they may not even care about the slippery slope they’re on.

T-Mobile is well aware that it’s picking winners and losers, so it’s telling users to vote on other services that they’d like to make the cut. This by itself is messed up — why should I have to petition T-Mobile to give preferential treatment to a particular music service? — but it also underscores why net neutrality is so important. New or obscure streaming music services will remain at a disadvantage for as long as T-Mobile doesn’t recognize them. This, in turn, makes it harder for these services to take off, enforcing a vicious cycle.

What’s really scary is that some tech pundits don’t even see this as a problem. Ross Rubin, an analyst whose opinions I usually respect, wrote on Twitter that the free music streaming is “not really a net neutrality issue” because T-Mobile isn’t favoring any one provider or setting up a “fast lane” for chosen services. But with wireless Internet, data caps are just as important as speed limits. The incentive to use unrestricted services is just as strong.

The good news, for now at least, is that T-Mobile isn’t charging music services for uncapped data, according to The Verge. And as the smallest of the major carriers, T-Mobile doesn’t pose a huge threat to the streaming music market on its own.

But by going down this road — and getting a warm response for doing so — T-Mobile is signaling to its competitors that it’s okay to dole out preferential treatment as long as customers see a short-term benefit. Once the hooks are in, T-Mobile could easily start charging these music services for their customers’ data use, and other carriers could start doing the same. AT&T has already set up a system to allow “sponsored data,” and Verizon has expressed interest in this business model as well.

And there’s nothing you can do about it. We currently don’t have any net neutrality protections in the United States, and it’s unclear whether wireless Internet will even be included as the FCC draws up new rules that can withstand legal scrutiny. Besides, if enough people feel good about what T-Mobile is doing, it’s hard to imagine regulators getting in the way. T-Mobile tries hard to look like it’s putting an arm over your shoulder, but “music freedom” is actually more of a stranglehold.

TIME wireless industry

Meet the Man Who Brought T-Mobile Back From the Brink

T-Mobile Holds Announcement Event In New York
Steve Sands—WireImage

If Sprint goes through with its rumored acquisition of wireless carrier T-Mobile, it will acquire about close to 50 million wireless subscribers, a company that generates $24 billion in annual revenue and a loud-mouth CEO that is said to be the leading candidate for steering the new, combined company.

John Legere was once a buttoned-up corporate suit for the international divisions of companies like AT&T and Dell, as well as the CEO of the now-defunct telecommunications company Global Crossing Limited. But he dumped the typical executive attire in favor of a blazer, jeans and a magenta T-shirt when he took over the ailing T-Mobile in the fall of 2012. The unusual attire fits his brash corporate strategy, which is basically to dismantle all the money-making fees the wireless industry has baked into cell phone plans over the years.

Through its “Uncarrier” campaign, T-Mobile has eliminated two-year contracts, gotten rid of international data charges and offered customers huge subsidies to lure them away from competitors. At first, the moves seemed like a desperate ploy from a last-place company. But T-Mobile has steadily added subscribers as it has offered more headline-grabbing deals, racking up 2.8 million additional postpaid subscribers since Legere took charge. The other carriers have tried to stop the company’s rise by lowering prices and offering some bribes of their own, but that hasn’t blunted T-Mobile’s momentum. In the first quarter of the year, T-Mobile added more new subscribers than the other three carriers combined. “T-Mobile’s results since they started this almost two years ago speak for themselves,” says Bill Menezes, principal research analyst at Gartner. “It really has changed the way all the big carriers now offer their service.”

Beyond overseeing strategy, Legere has given T-Mobile’s brand awareness a huge boost. He has almost 250,000 Twitter followers and regularly mocks his competitors by name. At the Consumer Electronics Show in January, he got kicked out of an AT&T party, generating tons of free press for his company. He issued a fake press release earlier this year in which he compared AT&T to Darth Vader. Is the rebel act all for show? Perhaps—Legere has been in the telecommunications industry for more than 30 years and at one point worked for current Sprint CEO Dan Hesse at AT&T. But Legere’s persona, authentic or not, aligns well with T-Mobile’s branding as a disruptor.

“Legere has been very successful in translating his personality style and kind of getting that across to the industry as someone that’s disruptive, someone that’s unorthodox in his presentation and his language,” says Wayne Lam, a wireless communication analyst at IHS technology. “He’s kind of personified that new T-Mobile brand.”

Legere’s marketing skills and business smarts have made him the primary candidate to lead the combined Sprint-T-Mobile, according to Bloomberg. “He’s seen as a dynamic figure who’s been successful at changign things in the cellular industry, and that’s really something that Sprint needs,” Menezes says.

Masayoshi Son, the CEO of Softbank, which owns Sprint, said last week at a tech conference that he admires Legere. Son has also indicated that he is fan of T-Mobile’s deep-discount strategy and believes it could be effective at scale. “I’m not content for Sprint to remain No. 3 because if we could grow bigger, we will offer aggressive discounts and services, just like we did in Japan,” he said earlier this year.

Still, T-Mobile is on a bit of a running clock because its effort to attract new customers is wildly unprofitable. The company posted a $151 million loss in the first quarter and missed analyst estimates for both earnings and revenue. A merger would instantly give the combined Sprint-T-Mobile about double the subscriber base, as well as the financial backing of Softbank, which generated more than $5 billion in profit in the 2013 fiscal year. The combined company would also have a more reliable network that would come closer to approaching the quality of AT&T’s and Verizon’s, Lam says.

Legere wins in a potential Sprint merger no matter the outcome. Either he becomes CEO of a larger telco that could legitimately compete with the top two carriers, or he gets a severance package of up to $42 million if he’s not hired at the merged company. Legere has said that a merger could be good for T-Mobile, but he’d like to stay in control. “I have no desire to turn T-Mobile into the son of something else,” he told Business Insider earlier this year.

Consumers hardly have such clear winning scenarios. There’s no guarantee that a larger, less desperate T-Mobile wouldn’t roll back its disruptive ambitions. The brand itself might eventually be swallowed whole by Sprint, which is what happened to former carriers such as Cingular Wireless and Alltel. And company consolidation is what created the fee-ridden industry that T-Mobile has so effectively disrupted in the first place. This four-horse race has been good for consumers, but there’s no telling how competitive dynamics may shift if the number of competitors dwindles to three.

“You’re eliminating a consumer choice,” Menezes says. “Any time you eliminate choice, I don’t believe that that’s good for consumers.”

TIME wireless carriers

T-Mobile’s Plan to Blow Up the Wireless Industry Is Starting to Work

T-Mobile’s crazy plan to upend the cell phone carrier model is starting to pay off. The fourth-place carrier added 1.3 million monthly customers in the first quarter of 2014, according to its quarterly earnings report. That was more than AT&T and Verizon combined (Sprint lost subscribers during the quarter).

The T-Mobile turnaround is thanks to its “Un-carrier” initiative, which has seen the company eliminate long-held traditions of the wireless industry, such as two-year contracts, high international data fees and automatic overage charges. T-Mobile has even gone so far as to pay customers up to $650 in cash and store credit to jump ship from a competing carrier.

Together, these moves are helping the company grow its customer base. “A year ago I promised that we would bring change to what I called this arrogant U.S. wireless industry,” T-Mobile CEO John Legere said in an earnings statement. “We are delivering on that promise and our results reflect the growing customer revolution that we’ve ignited.”

Though the “Un-carrier” model is boosting users, it’s not helping profits. The company posted a loss of $151 million for the quarter, down from $107 million profit in the first quarter of 2013. That translates to a loss of 19 cents per share, much worse than analysts’ estimates of a 10-cents-per-share loss. Revenues for the quarter were $6.88 billion, slightly off from estimates of $6.92 billion.

Underwhelming financials haven’t hurt T-Mobile’s stock, though, which jumped nearly 9% in early morning trading following the earnings release. The company’s shares have nearly doubled in value in the past year. For now, subscriber growth is all T-Mobile needs to please Wall Street, and the company is bullish on its ability to recruit new customers going forward. T-Mobile boosted the high-end of its guidance on projected monthly customer additions for the year from 3 million to 3.3 million.

Of course, T-Mobile’s radical new model might itself be disrupted if Sprint successfully buys the company out. The nation’s third-largest telco is reportedly talking to banks in preparation for a takeover bid.

TIME Smartphones

Phone Makers and Carriers Agree to Add Anti-Theft Kill Switches to Smartphones

Motorola, Microsoft, Nokia, Samsung, HTC and Huawei will join Apple and Google in allowing smartphone customers to deactivate their handsets from afar if they are lost or stolen. If enough people are actually able to do so, it might make thieves think twice

Apple and Google already allow you to remotely lock a lost or stolen phone, but now more phone makers and carriers are joining in with promises to include “kill switches” by July of next year.

The voluntary commitment, outlined by the wireless trade group CTIA, includes four capabilities that all smartphones must include:

1. Remote wipe the authorized user’s data (i.e., erase personal info that is added after purchase such as contacts, photos, emails, etc.) that is on the smartphone in the event it is lost or stolen.

2. Render the smartphone inoperable to an unauthorized user (e.g., locking the smartphone so it cannot be used without a password or PIN), except in accordance with FCC rules for 911 emergency communications, and if available, emergency numbers programmed by the authorized user (e.g., “phone home”).

3. Prevent reactivation without authorized user’s permission (including unauthorized factory reset attempts) to the extent technologically feasible (e.g., locking the smartphone as in 2 above).

4. Reverse the inoperability if the smartphone is recovered by the authorized user and restore user data on the smartphone to the extent feasible (e.g., restored from the cloud).

AT&T, Sprint, T-Mobile and Verizon have all agreed to allow these features on the phones they sell. Apple, Google, HTC, Huawei, Motorola, Microsoft, Nokia and Samsung have signed onto the agreement as well.

The industry hasn’t always been so keen on kill switches. Samsung reportedly tried to offer this anti-theft feature last year, but said that wireless carriers had rejected the idea. At the time, the CTIA said mandatory kill switches could become vulnerable to hackers, who could then disable users’ phones remotely.

It’s unclear why the CTIA has changed its mind now, but the group may be trying placate lawmakers with a voluntary commitment under its own terms. Worth noting is that the commitment doesn’t require phone makers to enable the kill switch by default.

For that reason, some lawmakers such as California state Senator Mark Leno aren’t satisfied. In a statement to Recode, Leno said the kill switch will only deter thieves if they know most smartphones will be rendered useless. (It’s sort of like herd immunity, where even the non-immune are protected as the epidemic stops spreading.)

But there’s a balance to be struck here. Although opt-in kill switches won’t be effective if most users don’t take advantage, mandatory kill switches won’t help if users don’t know about the feature and don’ t know how to use it. Whether it’s opt-in or opt-out, the effectiveness really comes to down implementation.

Apple provides a good model for how the system should work. When users set up their iPhones for the first time, they’re given a prominent option to enable Find My iPhone, so new users should be well aware of the feature. As of iOS 7, Find My iPhone includes an Activation Lock feature that prevents thieves from erasing or reactivating the device. Google has taken similar steps recently with Android Device Manager, which gained a remote lock feature last fall.

The key is for phone makers and carriers to teach users about these features, so they know what to do when their phones are lost or stolen. But that’s a lot trickier to legislate.

TIME Gadgets

Verizon Offering Discounts for Bringing Your Own Phone

Verizon
Bloomberg / Getty Images

Verizon is finally willing to give you a discount for bringing your own device to its network. The company announced that starting Thursday, April 17, compatible phones brought to Verizon will qualify for its lower, no-contract Verizon Edge discount rate on a new MORE Everything plan.

For individual users, the savings amount to $10 per month discount on your monthly line access fee with your own phone. Under the Edge plan, one line with 250MB will cost you just $45 per month (albeit with nasty data overage fees looming).

Larger families can qualify for even larger discounts as long as you purchase a 10GB or larger data plan. Four lines with 10GB of shared data now cost just $160 per month on Verizon Edge, the same cost as AT&T.

For more on getting the best deal while for shopping for a new cell phone plan, check out Techlicious’ recently updated carrier price comparison chart.

This article was written by Fox Van Allen and originally appeared on Techlicious.

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TIME Wireless

T-Mobile to Nix Overage Charges for All Consumer Plans

T-Mobile CEO John Legere speaks during a news conference at the 2014 International Consumer Electronics Show (CES) in Las Vegas
T-Mobile CEO John Legere speaks during a news conference at the 2014 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 8, 2014. Steve Marcus / Reuters

The fourth-largest carrier in the U.S. announced that it will eliminate overage charges on all of its consumer plans. Company CEO John Legere launched a Change.org petition calling on T-Mobile's rivals to "do the same for their customers"

On the heels of its reintroduction of an entry-level monthly data plan with a budget-friendlier price, T-Mobile said Monday that it’ll kill off overage charges on consumer plans entirely, then called on its rivals to follow suit.

Or spin that another way and you’re looking at T-Mobile CEO John Legere doing his usual maverick shtick, throwing down another gauntlet to garner attention, which he’s certainly getting here:

With any big change that’s ever led to any lasting good, somebody’s got to first stand up and point out a wrong. And it doesn’t hurt if that “somebody” is loud enough and brash enough that they’re hard to ignore. I can do that.

Overage charges are what we pay when we go over on voice, data or text quotas, and the amounts can be significant. T-Mobile already moved to mitigate most of them with its Simple Choice plans, so some of it’s symbolic, but nonetheless significant, because it’s not just T-Mobile drawing a line in the sand and quietly going about its business, it’s John Legere digging a trench (there’s no backing up on this now, unless Legere leaves) and taking activist aim at rivals AT&T, Verizon and Sprint.

Yes, activist: Legere just launched a Change.org petition calling on its rivals to “do the same for their customers – because it’s the right thing to do.” In the petition, Legere claims over 20 million U.S. customers were hit with overage charges last year, and that AT&T, Verizon and Sprint pocket a cool $1 billion in overage penalties annually.

“Charging overage fees is a greedy, predatory practice that needs to go,” said Legere in a statement. “Starting in May for bills arriving in June – regardless of whether you’re on Simple Choice, Simple Starter or an older plan, we’re abolishing overages for good. Period.”

What consumer’s going to disagree with firebrand rhetoric that resonates on economic and philosophical levels? T-Mobile’s still the fourth-largest carrier in the U.S. with annual revenue of over $20 billion, and you could argue this is as transparent a marketing maneuver as any other, but Legere’s tapping a form of finger-pointing populism (he’s borderline muckraking here) typically reserved for silly-season campaign ads — though there’s nothing silly about defining yourself in strict terms as the anti-overage fees, anti-annual service contract option.

TIME wireless carriers

T-Mobile Adds an Even Cheaper Wireless Plan

The new "Simple Starter" costs $40 per month and includes 500 MB of data, with a couple caveats.

About a month ago, T-Mobile doubled the data on its basic $50 per month plan, from 500 MB to 1 GB. Now, the 500 MB plan is back, and it’s $10 cheaper.

There’s just one thing missing: All other T-Mobile plans offer “unlimited” data at reduced speeds when you exceed your monthly allowance. The new $40 per month “Simple Starter” plan has a hard limit of 500 MB. You won’t get hit with overage charges automatically, but if you want to keep using data that month, you’ll have to pay extra.

Also, Simple Starter is for individual users only. For families, T-Mobile still requires a Simple Choice plan, which starts at $80 per month for two lines and $10 per month for each additional line.

As with other T-Mobile plans, Simple Starter includes unlimited talk and text, and you can still use your phone as a mobile hotspot as part of the 500 MB allotment.

The new plan is just the latest volley in what seems like an escalating price war between T-Mobile, AT&T and Verizon Wireless. Last month, AT&T also tweaked its plans, eliminating its 1 GB offering and cutting the price of its 2 GB plan by $15 per month. And last week, Verizon cut the price of its 10 GB and higher plans by $5 per month for users on its Edge early upgrade program. Both carriers had already overhauled their pricing structures in February, likely in response to T-Mobile.

All of these changes are tough to keep track of, but worry not; we’ve updated our pricing charts for AT&T, Verizon, Sprint and T-Mobile, so you can find the cheapest wireless plan for your needs.

TIME mergers and acquisitions

AT&T Leaps Into Prepaid Wireless Market

New York City Exteriors And Landmarks
AT&T store on December 31, 2013 in New York City. Ben Hider—Getty Images

The Federal Communications Commission approved the merger of the nation's number two wireless carrier AT&T and prepaid powerhouse Leap Wireless, which runs the Cricket prepaid wireless service

The Federal Communications Commission approved AT&T’s acquisition of Leap Wireless on Thursday. Leap runs the Cricket prepaid wireless service, which has about 5 million subscribers.

With 110 million U.S. subscribers as of the end of 2013, AT&T is the second largest carrier in the U.S. When first announced last July, the merger raised concerns that the acquisition of the popular wireless service could harm public interest. But AT&T has promised to divest spectrum in some markets and to offer low-cost packages comparable to the ones that made Cricket popular. In a SEC filing, it promised prepaid monthly packages for $40 or less for at least a year and a half after the merger.

AT&T’s network currently covers 308 million people across the country, while Leap’s covers 96 million in 35 states, according to ZDNet. The deal will strengthen AT&T’s network capacity in large markets and improve its presence in the growing prepaid market.

[The Verge]

TIME wireless carriers

AT&T and T-Mobile Tweak Data Plans and Prices Again

U.S Files Antitrust Complaint to Block AT&T, T-Mobile Deal
T-Mobile and AT&T signage is displayed on 17th street and Avenue of the Americas in New York, U.S., on Aug. 31, 2011. Stephen Yang—Bloomberg News/Getty Images

AT&T and T-Mobile are updating their data packages amid steep competition to bring in—and keep—subscribers. Among the changes, AT&T has slashed the price of a 2 GB sharing plan and T-Mobile has doubled its $50 per month plan to 1 GB

The price war between wireless carriers continues, with AT&T and T-Mobile both making adjustments to their respective plans.

AT&T has slashed the price of its 2 GB shared data plan by $15 per month, and eliminated its 1 GB offering. So for a two-year plan with 2 GB of shared data, subscribers will pay $80 per month for one line, plus $40 per month for each additional smartphone. With AT&T Next, which lets you trade up to a new phone once per year, the base cost is $65 per month, plus $25 for each additional line, but you also have to pay monthly installments on the phone instead of paying a subsidized price rate up-front. (For a 16 GB iPhone 5S, you’ll pay $32.50 per month extra, but no money down.)

The price change may help convince AT&T subscribers to switch over from their old plans to shared data plans, which include unlimited talk and text and mobile hotspot use at no extra charge.

T-Mobile’s price changes are a mix of good and bad news. The carrier’s $50 per month plan is getting bumped from 500 MB to 1 GB, and the $60 per month plan is jumping from 2.5 GB to 3 GB. T-Mobile is also adding unlimited texting from the United States to over 120 countries (something that AT&T now offers as well).

On the downside, the $70 per month unlimited data plan is being replaced by a 5 GB offering. If you want unlimited data, you’ll have to pay $80 per month instead. As with before, these plans also require you to pay for your phone in monthly installments, running $27 extra per month for a 16 GB iPhone 5s.

If you need help figuring out which wireless plan is cheapest, we’ve updated our massive comparison chart for AT&T, Sprint, T-Mobile and Verizon.

TIME AT&T

WhatsApp Who? AT&T Adds Free Text Messaging to Other Countries

A view shows the AT&T store sign in Broomfield, Colorado
Rick Wilking—Reuters

AT&T has apparently realized that customers have little need to pay for international text messages when there are plenty of free services such as WhatsApp that perform the same function.

AT&T has apparently realized that customers have little need to pay for international text messages when there are plenty of free services such as WhatsApp that perform the same function.

As such, the carrier is sweetening the deal for shared data plan subscribers, with free international text messaging from the United States. Subscribers can now send unlimited text messages to 190 countries, and unlimited picture and video messages to 120 countries. (The full list of supported countries is here.)

Keep in mind that this offer is only for subscribers on AT&T’s Mobile Share plans, which already include unlimited domestic text messaging. If you’re on an older plan, such as a grandfathered plan with unlimited data, you’re out of luck.

Verizon made the exact same move earlier this month, adding free international text messaging to its “More Everything” plans. T-Mobile and Sprint both chart $10 extra per month for texting to other countries, but T-Mobile also includes mobile-to-landline calling to 70 countries.

While carriers have traditionally charged higher rates for international messages, apps such as WhatsApp, Viber, Line and Skype provide a workaround. As long as both users have these apps, they can exchange messages for free. The idea has clearly caught on, with WhatsApp touting more than 450 million active users as it prepares to be acquired by Facebook, and the company is coming after voice calls next.

If you’re shopping around for wireless service, check out our guide to which of the major carriers are the cheapest.

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