Dial Zero
A look at what's surprising, silly, scary or stupid in telecommunications and data

Saturday, September 15, 2007

On vacation

We'll be away for a bit of relaxation and recharging. New posts will resume in the first week of October (unless I discover something really important before then).

If you miss me, you can read all of the old posts on all of my blogs

Friday, September 14, 2007

Sprint loses another big class-action suit.
Will pay $30 million for overcharging

A federal judge has given preliminary approval for Sprint Nextel to pay nearly $30 million to settle a class-action lawsuit alleging it overcharged in passing along a federally mandated phone service subsidy. Under the settlement, qualified business and residential customers would receive prepaid telephone calling cards worth a total of $25 million, while attorneys would receive $4.99 million for fees and costs.

AT&T (formerly known as SBC and Cingular and AT&T) is Sprint's co-defendant in the case, and is not included in the settlement and will continue to face litigation. The antitrust case consolidated dozens of class-action lawsuits filed across the country in Kansas City, Kan., federal court. The suits claimed Sprint and AT&T conspired with their chief competitor at the time, MCI, to charge customers more than the regulated fee for the Universal Service Fund. The program subsidizes the cost of running phone service to rural areas, low-income customers and public facilities, such as schools, libraries and rural hospitals.

Carriers are required to contribute to the fund a percentage of their gross revenue from interstate and international calls. The FCC sets the contribution rate. Sprint described the fee on its bills as "Federal Universal Service Fee" or "Carrier Universal Service Charge," while AT&T called it a "Universal Connectivity Charge." While the settlement ends litigation for Sprint, the case will continue against AT&T, which faces greater exposure than Sprint because of its larger market share.

The settlement covers long-distance customers who paid into the Universal Service Fund between Aug. 1, 2001, and March 31, 2003. Because of liability rules in antitrust actions, the settlement covers not only Sprint long-distance business and residential customers but also MCI long-distance business customers, AT&T long-distance business customers and AT&T long-distance residential customers in California. Sprint and MCI customers also will be eligible to participate in any settlements affecting AT&T.

The settlement comes days after a $57 million settlement ending another class-action lawsuit against Sprint claiming the company targeted older workers during layoffs a few years ago. Sprint also said in a regulatory filing a month ago that it has agreed to settle a third class-action lawsuit claiming the company shortchanged investors when it combined its landline and wireless stocks in 2004. (info from The Associated Press)

Thursday, September 13, 2007

Go shopping from your cellphone

Yesterday Sprint Nextel unveiled a new service that allows cellphone users to compare and buy a wide range of products by phone. Called Mobile Shopper, the free service essentially replicates the experience of shopping online, on a cellphone. The service also allows shoppers to compare the prices they see in stores with those offered by more than 30 online partners. People who like what they see can order items on the spot with a credit card.

"Mobile shopping on a handset, being able to do real-time price comparisons ... is really the advantage that we see and something we think our users are going to get really excited about," said Sprint's Charnsin Tulyasathien.

The service, provided in partnership with mShopper, offers around 7 million products from retailers including Wal-Mart, Target, Dreamtime Baby and GolfTravelBags.com.

Sprint Nextel, which receives no money from purchases, views the service as another way to attract and retain customers. Cellphone users have been shopping with their phones for some time, adding ringtones and games to their devices. Making the leap to buying electronics or clothes with a phone has taken longer, although other carriers have developed shopping services on their phones tied to specific retailers, such as Amazon.com or eBay.

Analysts think the market may be ready for a wider range of wireless shopping, especially once consumers get used to the idea, just as they did at the beginning of being able to shop over the Internet. (info from The Associated Press)

Wednesday, September 12, 2007

Coupons coming to cellphones

Over the past few years, we've seen the ubiquitous cellphone morph from a portable communicator into a media player, camera, TV, navigator, clock, calendar, phone book, comic book, credit card, friend locator, and more. Next on the list is electronic coupon.

While mobile-marketing firms are trying different approaches, one method lets cellphone users sign up for mobile coupons that offer discounts on products ranging from CDs and DVDs to fast food. Hungry cellphone talkers can, for instance, use coupons for buy-one-get-one-free chili dogs at Wienerschnitzel.

About a million people have signed up for the service, offered by Cellfire. The company says the service makes it easier to use coupons, commonly available in newspaper inserts. "Most people love to save, but they forget to keep the little pieces of paper when they go shopping." Consumers show their cellphone screen -- where the coupons are displayed -- to a cashier.

Cellfire has linked up with about 200 marketers, including Virgin Megastores, Hollywood Video, Domino's and Quiznos. Marketers pay Cellfire an upfront fee and additional subscription rates if the number of cellphone subscribers to their coupons increases. Cellfire has arrangements with cellphone carriers to ensure its coupons are available through their services.

Marketers are conscious that some consumers feel cellphones are personal space. "You look at email, and everybody hates spam," says Dee McLaughlin, marketing VP at Virgin Entertainment Group, which owns Virgin Megastore "You don't want to be spammed on your mobile phone." McLaughlin sees Cellfire's subscription-based service as a safe first step into mobile marketing. Virgin has offered discounts on DVDs through Cellfire. The early results have been good, with redemption rates for mobile coupons at 15%, far higher than the typical 5% for paper coupons.

Consumers sign up for Cellfire online or by sending a text message. The service asks for personal information such as birth year and ZIP code, so retailers can send coupons to specific demographic groups. (info from Stephanie Kang in The Wall Street Journal)

Tuesday, September 11, 2007

one million iPhones sold (a few weeks early)

Apple sold its millionth iPhone over the weekend, days after it slashed the price by a third to spur sales. It took just 74 days for the combination cellphone-iPod to hit the 1 million mark, which Apple had said it would achieve by the end of September. By comparison, it took two years for the company to sell 1 million iPods.

The milestone was reached weeks earlier than expected and sent shares of Apple up $4.94, or 3.8 percent, to $136.71. The stock regained some of the ground it lost after the price cut spooked investors as a sign of weak demand and slimmer margins.

Last week, Apple knocked $200 off the price of the 8-gigabyte iPhone, bringing its price to $399, and discontinued the 4-gigabyte version. The price cut may have helped a bit, but Apple clearly was on track already to exceed its own expectations, analysts say.

The swift price cut — not surprising in the cellphone industry but rare behavior for Apple — angered hundreds of early buyers who bought the touch-screen gadget for top dollar. In response to the negative reaction, Apple issued an apology the next day and offered customers $100 credits.

Apple had said it was lowering the iPhone price to attract more customers, in time for the holiday season. The move, which many analysts had predicted -- but not quite so soon -- adds pressure to Apple's rivals, but it also was possibly part of a broader strategy for its entire product lineup.

On the same day Apple slashed the iPhone price to $399, it unveiled a new iPod, also for $399. The iPod Touch is basically the same as the iPhone but without the phone capability. Apple cut the price of the hybrid iPod-cellphone to prevent an onslaught of consumers from abandoning it in favor of the Touch, Tim Bajarin, analyst with Creative Strategies, speculated. "They solved the cannibalization problem with this," he said. (info from The Associated Press)

Monday, September 10, 2007

Teen drivers may be stopped from phoning

California and at least 11 other states are considering bills banning teenagers from using electronic equipment while driving. At least 15 states and the District of Columbia have passed bans.

Supporters say teen-specific regulations reduce driver distraction and save lives. Opponents say they're another example of government meddling into citizens' private behavior; and teaching students proper driving skills is a parent's duty, not the state's.

The California legislation would ban 16- and 17-year-olds from using cellphones, text messaging devices, laptops, palmtops, PCs, pagers and walkie-talkies while driving, even those with "hands-free" features. (Last year, CA Governator Schwarzenegger signed a bill that prohibits all drivers from holding a cellphone while driving. The measure, which takes effect in July 2008, allows hands-free devices.)

There's little scientific research directly linking texting and car accidents, but anecdotal evidence suggests it's too distracting.

  • Last month, police in suburban Phoenix blamed a teen's text-messaging habit for a head-on crash that killed two people.
  • Ashley D. Miller, 18, wasn't wearing a seat belt and was texting on her cellphone while driving in Peoria, Ariz., when her truck crossed a lane and smashed into a car and killed its driver.
  • In June, a head-on wreck in upstate New York killed five teens only moments after the 17-year-old driver had sent and received text messages. The teen's SUV swerved into oncoming traffic, hit a tractor-trailer and burst into flames.

  • According to a 2001 report by the National Highway Traffic Safety Administration, 16-year-old drivers have a crash rate three times higher than that of 17-year-olds, five times greater than 18-year-olds and almost 10 times greater than drivers ages 30-59. (info from The Associated Press)

    Friday, September 07, 2007

    Comic books coming to cellphones

    Sean Demory realized a long-held dream of becoming a comic book writer when "Thunder Road" a post-apocalyptic adventure he developed with artist Steven Sanders, was released.

    But don't look for the tales on the shelves of a comic book store or even the Internet. "Thunder Road" is the first comic book released in the US exclusively on a cellphone, part of a lineup of mobile comic books offered by uClick. For $4.49 a month on Verizon, or $3.99 a month for AT&T and Sprint, subscribers can view nearly a dozen different comics.

    The comics range from well-known names like "Bone" and "Teenage Mutant Ninja Turtles," to new books, such as crime noirish "Umbra" and Hindu folklore-inspired "Devi." There's also a separate subscription service for Japanese comics called manga.

    Mobile comics have been a cellular mainstay for years in manga-crazy Japan, where some titles already begin life on cellphones before going to print. Stu Levy, CEO of TokyoPop, one of the leading US publishers of manga, said the domestic market is still way behind Japan. He said he could see comics being released in the US on mobile phones before coming out in print in the next few years. Levy, whose company provides most of GoComics' manga titles, said his company already is experimenting with adding animation and other cinematic touches to manga stories and tying in manga-themed games, ringtones, wallpaper and other content.

    The GoComics reader displays each comic book one panel at a time, reformatted from the printed versions with larger typeface in word balloons. The phone's buttons advance each frame, allowing the reader to scroll across larger pictures.

    Sanders, who did the art for "Thunder Road" as well as "Five Fists of Science," said the smaller screen does pose some challenges as space is at a premium. But he said the single panels also allow creators to better control how their audience reads the story, preventing them from ruining surprises by glancing at the next page. (info & photo from The Associated Press)

    Thursday, September 06, 2007

    Apple chops iPhone price,
    pisses-off early adopters

    Apple slashed the price of the top iPhone by $200 Wednesday to bolster sales, but also angered loyal customers who waited in long lines and paid top dollar when the phone debuted.

    The 8-gigabyte iPhone will now cost $399 - one-third less than when it went on sale June 29. The 4-gigabyte iPhone, which sold for $499, will be discontinued. A new 16-gigabyte iPod Touch non-phone will sell for $399, just like the 8-gig iPhone.

    Ryan Roth, who bought an iPhone for $599 on Friday after months of research, chalked up his purchase to "the worst timing ever." He said he planned to call Apple's customer support hotline to see if he could get a $200 rebate or a smaller store credit at iTunes. "If they could do that, I'd be very happy," said Roth, who has been thinking about getting a cellphone for four years but held out until the last week. "Otherwise, I realize this is not their problem: I agreed to the original price - it's my fault. It just kinda sucks."

    Apple stock dropped more than 5 percent after the price cut was announced, closing at $136.76, down $7.40 cents. In extended trading, it lost another $1.01.

    The steep price cut less than three months after the iPhone's launch is a surprise from Apple, which usually keeps prices steady while adding new features and offers discounts only when a product begins to get old. "This is about Apple learning how to become a cell phone retailer," said Jeff Kagan, an independent telecommunications industry analyst based in Atlanta. "All of a sudden it's in the cell phone business, and everyone is trying to figure out how to measure it, and we don't know yet."

    Apple CEO Steve Jobs said the company is on its way to selling 1 million iPhones in the United States by the end of September. (info from The Associated Press)

    Wednesday, September 05, 2007

    FCC ends local vs. long-distance split for telcos

    The Federal Communications Commission told the three remaining "Bell" telephone companies that they no longer need to operate their long-distance businesses as separate entities.

    The new rules would allow the three dominant wired phone companies, AT&T (formerly known as SBC, PacTel, Bell South, Southern New England Telephone, Cingular, etc.), Qwest (formerly known as SuperNet, US West, Mountain Bell, The Mountain States Telephone & Telegraph Company, Pacific Northwest Bell Telephone Company, etc.) Verizon (formerly known as New York Telephone, New Jersey Bell, The Chesapeake and Potomac Telephone Company of West Virginia, New England Telephone & Telegraph Co., Bell Atlantic, NYNEX, GTE, MCI, etc.) to merge their long-distance businesses with their main operations.

    The move lets the companies cut costs for duplication of marketing, customer-service and other operations. The companies' request to merge the long-distance operations wasn't considered controversial because customers are increasingly using wireless phones for long-distance calls.

    The requirement dates from the time when it was much more common for residential customers to buy separate long-distance packages on top of their local service. It was meant to prevent local phone companies from keeping other long-distance providers out of a particular market.

    Companies were required to either operate the long-distance units as separate legal companies, or subject themselves to price regulation. All three telcos chose separation over regulation. (info from The Wall Street Journal)

    Tuesday, September 04, 2007

    iPhone hacking may face legal challenges

    Hackers have figured out how to unleash Apple's iPhone from AT&T's cellular network, network, but people hoping to make money from the procedure could face legal problems. At least one of the companies hoping to make money by unlocking iPhones said it is hesitating after calls from lawyers representing the phone company. Unlocking the phone for one's own use, for instance to place calls with a different carrier, appears to be legal. But if it's done for financial gain, the legality is less certain.

    "Whether people can make profits from software that hacks the iPhone is going to depend very much on exactly what was done to develop that software and what does that software do," said Bart Showalter, head of the Intellectual Property practice group at law firm Baker Botts in Dallas.

    John McLaughlin of Uniquephones.com, an outfit based in Northern Ireland, said that its unlocking software for iPhones is ready, but the company is holding off while it gets legal advice. They were contacted by lawyers representing AT&T, who told him the software contained material copyrighted by Apple.

    Uniquephones.com had planned to release the software via iphoneunlocking.com. The price for people on its mailing list, which contained just fewer than half a million addresses, would be $25 per iPhone, McLaughlin said. "From their e-mail addresses, they're from everywhere in the world," McLaughlin said. "Everybody is just waiting for it."

    The iPhone is sold only in the US, and only for use on the AT&T network, but it is compatible with cellphone technology used around the world, which means an unlocked phone can use an overseas account and number. In the US, T-Mobile is the only other major carrier compatible with the iPhone; Sprint and Verizon Wireless use different network technologies. Most US phones are locked to their carrier when sold, because the carrier subsidizes the cost of the phone. The iPhone, however, is apparently not subsidized by AT&T.

    Some carriers provide the unlock codes on request when a subscriber's contract expires, but that doesn't apply to the iPhone, and in any case, the phone only went on sale two months ago, while the minimum contract length is two years.

    Another Web site, iphonesimfree.com, has said it plans to release iPhone unlocking software in a few days.

    The Copyright Office of the Library of Congress last year issued a statement that unlocking cellphones was not a violation of copyright under the Digital Millennium Copyright Act. That law has been used to go after software that copies DVDs. But Tracfone Wireless LLC, a Florida-based company selling phones that use prepaid plans, won an injunction in February against a couple who bought its phones in large numbers and resold them unlocked.

    The U.S. District Court in Orlando found that the DMCA exception did not apply to those unlocking a phone with the intent to resell it.

    Bruce Sunstein, a patent lawyer with Boston-based Bromberg & Sunstein, said unlocking software could well stand up to a legal challenge. "They're aiding and abetting something that's completely legal ... the exemption the Copyright Office created does not state that it applies only to the user," Sunstein said.
    (info from The Asociated Press)