NEWS: Congress unlocks US cellphones

On Sun, 26 Nov 2006 15:35:02 -0800, "Cavity Search"
<[email protected]> wrote in <[email protected]>:

>"John Navas" <[email protected]> wrote in message
>news:[email protected]...

>> The carriers are actually thinking about fraud.
>
>I was under the impression carriers locked their phones to prevent folks
>from getting free or discounted phones, then simply walking off to another
>carrier or selling it on Ebay.

Fraud can come into play when stolen credit card numbers are used to buy
the phones, which then disappear. Although the IMEI numbers can be
eventually blocked, the value of the stolen phones is much less when
they are carrier locked.

>Since it's so easy to buy unlocked phones, or have one's phone unlocked, I
>don't see how any of this can possibly prevent fraud.

It works well enough to discourage less sophisticated thieves, and it's
actually pretty hard to get some of the latest phones unlocked without
help from the carrier.

Think about. The carrier can't really be worried about legitimate
customers, since they can just ding credit cards. They therefore are
really worried about illegitimate customers.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

---

› See More: NEWS: Congress unlocks US cellphones

On Mon, 27 Nov 2006 22:00:41 -0800, "Paul Hovnanian P.E."
<[email protected]> wrote in <[email protected]>:

>John Navas wrote:

>> The carriers are actually thinking about fraud.
>
>What kind of fraud are you referring to? Leaving a provider with a
>subsidized phone? That's already taken care of with termination
>penalties.

That's not fraud. Think stolen credit card numbers.

>Stolen phone? Phones can be deactivated by their ID (separate
>from the SIM identity).

It takes time to respond and block the IMEI, by which time much harm can
have been done, which is part of why fraud is such a huge problem for
carriers. The point of locking is to discourage fraud in the first
place -- a locked phone is of much less value, particularly to a less
sophisticated thief.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Mon, 27 Nov 2006 01:34:47 +0000 (UTC), [email protected] wrote in
<[email protected]>:

>SMS <[email protected]> wrote:
>> What doesn't make sense is the fact that the carriers are so sensitive
>
>I wouldn't say "sensitive". I would say "clueless". The front line
>service reps don't know anything about unlocking. What reference do you
>have that indicates they are sensitive about it, or refuse to provide the
>code for a phone that is locked to them?
>
>> about the subject. You still have to sign a contract to get a discounted
>> phone, and you can't leave for another carrier for one or two years
>> without paying a termination fee. I guess the carriers are thinking
>> beyond those two years, or in the case of quad-band phones they're
>> thinking about international roaming revenue as opposed to having
>> subscribers opt for prepaid SIM cards.
>
>If you ask Cingular for the subsidy unlock code, specifically because
>you are traveling out of the country and want to use another SIM, they
>will give you the unlock code. ...

*If* your account is established for a reasonable period of time and is
in good standing.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

It is alleged that John Navas claimed:

> It takes time to respond and block the IMEI, by which time much harm can
> have been done, which is part of why fraud is such a huge problem for
> carriers. The point of locking is to discourage fraud in the first
> place -- a locked phone is of much less value, particularly to a less
> sophisticated thief.

Serious question: How much of this fraud is there in Europe and Asia?
This business of locking phones to a specific carrier seems to be
unique to the US, home of the alleged free.

--
Jeffrey Kaplan www.gordol.org
The from userid is killfiled Send personal mail to gordol

"Not having any idea who I was, he looked at me with something akin to
pity in his eyes, as if this was the one big thing I'd ever done and I
had come by to relive that moment of accomplishment...and he asks if I
did anything after that, and I said Babylon 5...he didn't have a clue
what it was and said, 'So, did that work out okay for you?'" - JMS
recounts a conversation he had at the He-Man booth at ComicCon '02
after mentioning that he used to write for the show)

On Tue, 28 Nov 2006 14:13:31 -0500, Jeffrey Kaplan <[email protected]>
wrote in <[email protected]>:

>It is alleged that John Navas claimed:
>
>> It takes time to respond and block the IMEI, by which time much harm can
>> have been done, which is part of why fraud is such a huge problem for
>> carriers. The point of locking is to discourage fraud in the first
>> place -- a locked phone is of much less value, particularly to a less
>> sophisticated thief.
>
>Serious question: How much of this fraud is there in Europe and Asia?
>This business of locking phones to a specific carrier seems to be
>unique to the US, home of the alleged free.

SIM-locking isn't uncommon in Europe.
There's a lot of cell phone fraud in the USA.
<http://www.nd.gov/itd/security/start/phone6.htm>

... a recent promotional message from a major wireless provider
stated that over one million cell phones were stolen in the U.S. in
1999

<http://www.fcc.gov/cgb/consumerfacts/cellphonefraud.html>

The cellular industry estimates that carriers lose more than $150
million per year due to subscriber fraud.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

At 28 Nov 2006 14:13:31 -0500 Jeffrey Kaplan wrote:

> Serious question: How much of this fraud is there in Europe and Asia?
> This business of locking phones to a specific carrier seems to be
> unique to the US, home of the alleged free.

The British mobile operators lock phones as well (as do the Canadians.)
I suspect that many other countries' operators do as well, if they
subsidize handsets.

The real difference is that in many places outside the US, consumers
regularly purchase unlocked handsets sourced directly from manufacturers
(as opposed to the operators.)

That can be done here as well, but it's not common, because we've been
trained to take a subsidy. When I bought my current phone, my T-Mo MDA,
I chose to buy it from T-Mo for $250 w/ a 1-year contract extension,
rather than buying the identical unlocked "I-Mate" version for $600. The
$350 I saved represents seven months of T-Mo service including taxes.
What advantage would an unlocked "unbranded" phone get me, unless I was
after a model US carriers didn't offer? (By contrast, I bought my wife a
cute little pink Panasonic G51 on eBay from a seller in the UK last year
for about $100- she wanted a tiny phone she could lose in her purse, and
at the time, the G51 was about the smallest GPRS-enabled phone available.)

I believe the free market tends to work- if there was a "real" demand for
unlocked/unbranded handsets, we'd see more retailers selling them. Since
it's a "specialty" market, they are harder to find- but today even some
mainstream retailers like Fry's and CompUSA carry them, as well as online
retailers and independent wireless shops. This idea that some vast
wireless conspiracy between carriers and handset makers prevents unlocked
handsets from being sold in the USA is simply nonsense- even Nokia
(supposedly part of the conspiracy!) sells a few models of their phones
directly to consumers via their website. And certainly handset makers
not favored by the carriers (like Panasonic, for example) would certainly
try to get their foot in the door in the USA by selling unsubsidized
handsets if they thought they had a reasonable chance of success, but
they too realize there is a very small demand for unsubsidized phones in
the US.

Cellphones aren't that different than any other consumer electronics-
people tend to want the "hot" model everyone else seems to be using
(think iPod vs. any number of equally or better valued MP3 players out
there!) so no matter how good and thin an unsubsidized
Panasonic/Pantech/DoCoMo/etc. phone might be, nobody is going to spend
$150 for it when they can get a subsidized Razr for "free."

Remember it wasn't always this way- when I started selling cellphones in
the late 80's, you paid full retail for the phone ($700-$1500) and
monthly rates started as low as $0/month plus 75-cents/minute for an
"emergency-only" type plan. Of course, carriers could afford to offer
much lower monthly rates then, since they weren't starting $100-200 in
the hole by "paying us" to take a phone.

Of course, cellular use in this country didn't explode until
subsidized/free phones became available. That's the great thing about
the free market- we get the products and services we ask for...
...whether it is good for us or not! ;-)


--
Posted via a free Usenet account from http://www.teranews.com

"Paul Hovnanian P.E." <[email protected]> wrote in
news:[email protected]:


>
> What kind of fraud are you referring to? Leaving a provider with a
> subsidized phone? That's already taken care of with termination
> penalties. Stolen phone? Phones can be deactivated by their ID
> (separate from the SIM identity).
>
>

Point taken, but how does Cingular efficiently and cheaply check to see if
the unlocked T-mo phone in the customer's hand was stolen or not?

John Navas wrote:
>
> On Mon, 27 Nov 2006 22:00:41 -0800, "Paul Hovnanian P.E."
> <[email protected]> wrote in <[email protected]>:
>
> >John Navas wrote:
>
> >> The carriers are actually thinking about fraud.
> >
> >What kind of fraud are you referring to? Leaving a provider with a
> >subsidized phone? That's already taken care of with termination
> >penalties.
>
> That's not fraud. Think stolen credit card numbers.
>
> >Stolen phone? Phones can be deactivated by their ID (separate
> >from the SIM identity).
>
> It takes time to respond and block the IMEI, by which time much harm can
> have been done, which is part of why fraud is such a huge problem for
> carriers. The point of locking is to discourage fraud in the first
> place -- a locked phone is of much less value, particularly to a less
> sophisticated thief.

But how would that differ from someone stealing a credit card, buying a
(locked) phone with a plan (possibly prepaid) and using it without
shifting carriers until the theft has been discovered?

No part of this scheme requires the perpetrator to switch plans. So
locking the phone provides no remedy.

> --
> Best regards, FAQ FOR CINGULAR WIRELESS:
> John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

--
Paul Hovnanian mailto:[email protected]
------------------------------------------------------------------
"Yee-Ha!" is not an adequate foreign policy.

Todd Allcock wrote:
>
[snip]

> I believe the free market tends to work- if there was a "real" demand for
> unlocked/unbranded handsets, we'd see more retailers selling them. Since
> it's a "specialty" market, they are harder to find- but today even some
> mainstream retailers like Fry's and CompUSA carry them, as well as online
> retailers and independent wireless shops. This idea that some vast
> wireless conspiracy between carriers and handset makers prevents unlocked
> handsets from being sold in the USA is simply nonsense- even Nokia
> (supposedly part of the conspiracy!) sells a few models of their phones
> directly to consumers via their website. And certainly handset makers
> not favored by the carriers (like Panasonic, for example) would certainly
> try to get their foot in the door in the USA by selling unsubsidized
> handsets if they thought they had a reasonable chance of success, but
> they too realize there is a very small demand for unsubsidized phones in
> the US.

I think this is the real reason behind the FUD over unlocked phones. If
the providers can restrict the market channels available to the
manufacturers to themselves, they have the manufacturers over a barrel,
so to speak. Not unlike the way WalMart can dictate terms to many
manufacturers.

Not that Cingular is guilty of this behavior to the same extent as
others. But what do you think would happen if those 'others' couldn't
lock down phone features, Even those that should have nothing to to with
the network, like up/downloading phone data directly to a PC, or WiFi
protocols. These allow users to bypass equivalent services provided by
the carriers, for a fee of course.

I guess some carriers might consider giving the consumer some choices a
kind of fraud......

--
Paul Hovnanian mailto:[email protected]
------------------------------------------------------------------
I have a very firm grasp on reality. I can reach out and strangle it any
time!

On Tue, 28 Nov 2006 20:37:04 -0800, "Paul Hovnanian P.E."
<[email protected]> wrote in <[email protected]>:

>Todd Allcock wrote:
>>
>[snip]
>
>> I believe the free market tends to work- if there was a "real" demand for
>> unlocked/unbranded handsets, we'd see more retailers selling them. Since
>> it's a "specialty" market, they are harder to find- but today even some
>> mainstream retailers like Fry's and CompUSA carry them, as well as online
>> retailers and independent wireless shops. This idea that some vast
>> wireless conspiracy between carriers and handset makers prevents unlocked
>> handsets from being sold in the USA is simply nonsense- even Nokia
>> (supposedly part of the conspiracy!) sells a few models of their phones
>> directly to consumers via their website. And certainly handset makers
>> not favored by the carriers (like Panasonic, for example) would certainly
>> try to get their foot in the door in the USA by selling unsubsidized
>> handsets if they thought they had a reasonable chance of success, but
>> they too realize there is a very small demand for unsubsidized phones in
>> the US.
>
>I think this is the real reason behind the FUD over unlocked phones. If
>the providers can restrict the market channels available to the
>manufacturers to themselves, they have the manufacturers over a barrel,
>so to speak. Not unlike the way WalMart can dictate terms to many
>manufacturers.

Except carriers don't have manufacturers over any barrel. Lots of
channels are available to manufacturers (e.g., WalMart, Amazon.com).
The problem is insufficient demand at non-subsidized prices -- carriers
represent far greater volume.

>Not that Cingular is guilty of this behavior to the same extent as
>others. But what do you think would happen if those 'others' couldn't
>lock down phone features, Even those that should have nothing to to with
>the network, like up/downloading phone data directly to a PC, or WiFi
>protocols. These allow users to bypass equivalent services provided by
>the carriers, for a fee of course.

If that was really a big factor, then it would massively drive business
to GSM carriers, and that isn't happening.

>I guess some carriers might consider giving the consumer some choices a
>kind of fraud......

Consumers clearly don't care about these issues, or the market would
respond differently.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Tue, 28 Nov 2006 20:22:02 -0800, "Paul Hovnanian P.E."
<[email protected]> wrote in <[email protected]>:

>John Navas wrote:

>> It takes time to respond and block the IMEI, by which time much harm can
>> have been done, which is part of why fraud is such a huge problem for
>> carriers. The point of locking is to discourage fraud in the first
>> place -- a locked phone is of much less value, particularly to a less
>> sophisticated thief.
>
>But how would that differ from someone stealing a credit card, buying a
>(locked) phone with a plan (possibly prepaid) and using it without
>shifting carriers until the theft has been discovered?

Organized fraud (resale of phones) concerns carriers much more than the
actions of some individual customers.

>No part of this scheme requires the perpetrator to switch plans. So
>locking the phone provides no remedy.

Read what I wrote more carefully and objectively.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Tue, 28 Nov 2006 20:47:33 -0800, "Paul Hovnanian P.E."
<[email protected]> wrote in <[email protected]>:

>Scott wrote:
>>
>> "Paul Hovnanian P.E." <[email protected]> wrote in
>> news:[email protected]:
>>
>> >
>> > What kind of fraud are you referring to? Leaving a provider with a
>> > subsidized phone? That's already taken care of with termination
>> > penalties. Stolen phone? Phones can be deactivated by their ID
>> > (separate from the SIM identity).
>>
>> Point taken, but how does Cingular efficiently and cheaply check to see if
>> the unlocked T-mo phone in the customer's hand was stolen or not?
>
>The same way they check to see if the locked Cingular phone in the
>customer's hand was stolen. If the infrastructure isn't in place to
>disable the handset by its IMEI, there's nothing stopping the thief from
>(fraudulently or otherwise) just obtaining another Cingular account.
>
>Once IMEI blocking is implemented (efficiently) carriers can share
>(possibly through law enforcement) each other's stolen handset lists.

There is a central database.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

Scott wrote:
>
> "Paul Hovnanian P.E." <[email protected]> wrote in
> news:[email protected]:
>
> >
> > What kind of fraud are you referring to? Leaving a provider with a
> > subsidized phone? That's already taken care of with termination
> > penalties. Stolen phone? Phones can be deactivated by their ID
> > (separate from the SIM identity).
> >
> >
>
> Point taken, but how does Cingular efficiently and cheaply check to see if
> the unlocked T-mo phone in the customer's hand was stolen or not?

The same way they check to see if the locked Cingular phone in the
customer's hand was stolen. If the infrastructure isn't in place to
disable the handset by its IMEI, there's nothing stopping the thief from
(fraudulently or otherwise) just obtaining another Cingular account.

Once IMEI blocking is implemented (efficiently) carriers can share
(possibly through law enforcement) each other's stolen handset lists.

--
Paul Hovnanian mailto:[email protected]
------------------------------------------------------------------
Diplomacy is the art of saying "nice doggy" while looking for a rock.

At 28 Nov 2006 18:58:59 -0600 Scott wrote:

> Point taken, but how does Cingular efficiently and cheaply check to see
if
> the unlocked T-mo phone in the customer's hand was stolen or not?

They could, at regular intervals, trade stolen phone lists with other
carriers.

Obviously they have a way to restrict use of stolen Cingular phones. How
expensive would it be to trade/update that info with other carriers?

(As an aside, other than for good public relations, does a carrier really
care if a stolen phone is being activated as long as the bill is being
paid? Carriers are in a service business- the hardware is simply a means
to that end. Does a gas station owner really care if the guy who just
paid cash for $50 worth of gas pumped it into a stolen car?)

At 28 Nov 2006 20:35:19 +0000 John Navas wrote:

> There's a lot of cell phone fraud in the USA.
> <http://www.nd.gov/itd/security/start/phone6.htm>
>
> ... a recent promotional message from a major wireless provider
> stated that over one million cell phones were stolen in the U.S. in
> 1999

Maybe I'm missing something, but how is that a big problem for carriers
in this day and age? Sure, it's a hassle for the consumers whose phones
were stolen, but the carriers sell service. The cloning days are long
behind us. How does it hurt Verizon, for example, if I activate a stolen
Alltel phone on their service? To be completely pragmatic, it doesn't
realistically even hurt Alltel- they probably just roped the victim into
another contract to replace his stolen phone!



> The cellular industry estimates that carriers lose more than $150
> million per year due to subscriber fraud.

According to your source, that loss is primarily from identity theft-
starting new contract service in someone else's name and running off
without paying a bill. How does subsidy-locking the phone combat this?