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Wall Street’s Latest Great Idea: Providers Should Charge More for 5G, But Only After You Are Hooked

“You’re giving it away… you are giving it all away!” — An unknown Wall Street analyst tossing and turning in the night.

America is simply not paying enough for wireless service. Thanks to dastardly competition introduced by T-Mobile and Sprint (potentially to be snuffed out in due course if their merger gets approved), wireless pricing is no longer a license to print money. Forced to offer one-size-fits-all affordable $40-50 unlimited plans, the prospects to grow Average Revenue Per User (ARPU) have never been worse because you can’t charge people for more service on an “unlimited plan” without admitting that plan is not exactly “unlimited.”

Wall Street analysts, already upset at the thought of carriers spending more than $100 billion on 5G network upgrades, are in a real tizzy about how companies are going to quickly recoup that investment. No matter that some wireless companies have profit margins in the 50% range and customers have paid providers for a service they were assured would keep up with the times and network demand. If there is to be a 5G revolution in the United States, some insist it must not come at the cost of reliable profits — so the industry must find a way to stick consumers with the bill.

It is not common for industry analysts to go public brainstorming higher prices and more customer gouging. After all, North Americans already pay some of the highest cell phone bills in the world, only mitigated (for now) by scrappy T-Mobile and Sprint. Mark Lowenstein, a leading industry analyst, consultant, and commentator, was willing to go public in the pages of Fierce Wireless, arguing “operators should be considering charging a premium price for what will hopefully be a premium service.” That is likely music to the ears of AT&T and Verizon, both frustrated their pricing power in the market has been reduced by credible competition from a significantly improved T-Mobile.

Lowenstein fears the prospects of a “race-to-the-bottom 5G price war” which could arrive if America’s wireless companies offer a credible home internet replacement that lets consumers tell the local phone or cable company to ‘take a hike.’ Since wireless operators will bundle significant discounts for those who subscribe to both home and mobile plans, telecommunications services may actually cost less than what Wall Street was banking on.

Something must be done. Lowenstein:

In mobile, there’s been premium pricing for premium phones. And Verizon Wireless, for a few years when it had a clear network lead, was sort of able to charge a higher price for its service (but not a premium price). But today, there isn’t really premium pricing for premium services. That should change when 5G really kicks into gear.

So how do you extract more cash from consumers’ wallets? Create artificial tiers that have no relationship to the actual cost of the network, but could potentially get people to willingly pay a lot more for something they will initially get for a simple, flat price:

One simple way would be a flat premium price, similar to the “tiers” of Netflix for a higher number of devices or 4K/Ultra HD.  So, perhaps $10 per line for 5G, or $25 for a family plan. Another approach would be more akin to broadband, where there are pricing tiers for different levels of service performance. So if the base 4G LTE plan is $50 per month today, for an average 100 Mbps service, 5G packages could be sold in gradations of $10 for higher speeds (i.e. $60 for 300 Mbps, $70 for 500, $80 for 1 Gbps, and so on). An interesting angle on this is that some of the higher-end 4G LTE services such as Gigabit LTE (and beyond) could get incorporated into this, so it becomes less of a 4G vs. 5G discussion and more of a tier of service discussion.

I would also like to see some flexibility with regard to how one can purchase 5G capabilities. For example, a user might only need those premium 5G features occasionally, and might only be prepared to pay that higher price when the service is being used. Here, we can borrow from the Wi-Fi model, where operators offer a “day pack” for 5G, or for a certain city, location, or 5G-centic app or experience. 5G is going to be hot-spotty for awhile anyway, so why not use a Wi-Fi type model for pricing?

Even better, now with net neutrality in the ash heap of history, courtesy of the Republican-dominated FCC, providers can extract even more of your money by artificially messing with wireless traffic!

Lowenstein sees a brand new world of “app-centric pricing” where wireless carriers can charge even more to assure a fast lane for those entertainment, gaming, and virtual reality apps of the future, designed to take full advantage of 5G. Early tests have shown millimeter wave 5G networks can deliver extremely low latency traffic to customers from day one. That kills the market for selling premium, low-latency add-ons for demanding apps before companies can even start counting the money. So assuming providers are willing to purposely impede network performance, there just could be a market selling sub-100ms assured latency for an extra fee.

The potential of a Money Party only 5G can deliver is coming, but time is short to get the foundation laid for surprise toll lanes and “premium traffic” enhancements made possible without net neutrality. But first, the wireless industry has to get consumers hooked on 5G at a tantalizingly reasonable price. Charge too much, too soon and consumers may decide 4G LTE is good enough for them. That is why Lowenstein recommends operators not get carried away when 5G first launches.

“We don’t want to be setting ourselves up for a WiMAX-like disappointment,” Lowenstein writes. “The next 12-18 months are largely going to be ‘5G Experimentation’ mode, with limited markets, coverage, and devices. Heck, it’s likely to be two years before there’s a 5G iPhone in the United States, where iOS still commands nearly half the market.”

The disappointment will eventually be all yours, dear readers, if Lowenstein’s recommendations are adopted — when “certain milestones” trigger “rate adjustment” letters some day in the future.

Lowenstein sees four signs to start the pillaging, and we’ve paraphrased them:

  • Coverage: Wait until 30-40% of a city is covered with 5G, then jack up the price. As long as customers get something akin to 5G one-third of the time, they’ll moan about why their 5G footprint is so limited, but they will keep paying more for the scraps of coverage they get.
  • Markets: Price the service differently in each market depending on how stingy customers are likely to be at different price points. Then hike those prices to a new “nationwide” standard plan when 5G is available in the top 20-30 cities in the country. Since there may not be much competition, customers can take it or leave it.
  • Performance: AT&T and Verizon’s gotta gouge, but it’s hard to do it with a straight face if your 5G service is barely faster than 4G LTE. Lowenstein recommends waiting until speeds are reliably north of 100 Mbps, then you can let rip with those diamond-priced plans.
  • Devices: It’s hard to extract another $50-100 a month from family plan accounts if there are an inadequate number of devices that support 5G. While your kids “languish” with 4G LTE smartphones and dad enjoys his 5G experience, mom may shut it all down when the bill comes. Wait until everyone in the family can get a 5G phone before delivering some good old-fashioned bill shock, just like companies did in the golden days of uncompetitive wireless.

These ideas can only be adopted if a lack of competition assures all players nobody is going to call them out for pickpocketing customers. Ajit Pai’s FCC won’t interfere, and is even subsidizing some of the operators’ costs with taxpayer dollars and slanted deregulation to let companies construct next generation 5G networks as cheaply as possible (claiming it is important to beat China, where 5G service will cost much less). Should actual competition remain in the wireless market, all the dreams of rate-hikes-because-we-can will never come true, as long as one carrier decides they can grow their business by charging reasonable prices at their competitors’ expense.

Consumer, Industry Groups Slam T-Mobile/Sprint Merger Now Before FCC

“Devastating.”

“Too big to fix.”

“A bad, recurring dream.”

“An oligopoly.”

“A meritless merger.”

These were some of the comments from objectors to T-Mobile and Sprint’s desire to merge the two wireless carriers into one.

Consumer and industry groups filed comments largely opposed to the merger on the grounds it would be anti-competitive and lead to dramatic price increases for U.S. consumers facing a consolidated market of just three national wireless carriers.

Free Press submitted more than 6,000 signatures from a consumer petition opposed to the merger.

“This is like a bad recurring dream,” one of the comments said, reflecting on AT&T’s attempt to acquire T-Mobile in 2011.

The comments reflected consumer views that mergers in the telecom industry reduce choice and raise prices.

The American Antitrust Institute rang alarm bells over the merger proposal it said was definitively against the public interest and probably illegal under antitrust laws. It declared two competitive harms: it creates a “tight oligopoly of the Big 3 and [raises] the risk of anticompetitive coordination” and it “eliminates head-to-head competition between Sprint and T-Mobile.”

The group found the alleged merger benefits offered by the two companies unconvincing.

“The claim that two wireless companies need a merger to expand or upgrade their networks to the next generation of technology is well worn and meritless. The argument did not hold any water when AT&T-T-Mobile advanced it in 2011 and the same is true here,” the group wrote. “The FCC should reject it, particularly in light of the merger’s presumptive illegality and almost certain anticompetitive and anti-consumer effects. Both AT&T and T-Mobile expanded their networks in the wake of their abandoned merger. And T-Mobile became a vigorous challenger to its larger rivals. Sprint-T-Mobile’s investor presentation notes, for example ‘T-Mobile deployed nationwide LTE twice as fast as Verizon and three times as fast as AT&T.’”

“The Sprint-T-Mobile merger is one of those mergers that is ‘too big to fix,’” the group added. “Like the abandoned AT&T-T-Mobile proposal, it is a 4-3 merger. It combines the third and fourth significant competitors in the market, creating a national market share for Sprint-T-Mobile of about 32%. Next in the lineup is AT&T, with a share of about 32%. Verizon follows with a share of about 35%. These three carriers would make up the vast majority (almost 99%) of the national U.S. wireless market with smaller MVNOs accounting for the remaining one percent. These carriers include TracPhone, Republic Wireless, and Jolt Mobile, Boost Mobile, and Cricket Wireless, which purchase access to wireless infrastructure such as cell towers and spectrum at wholesale from the large players and resell at retail to wireless subscribers.”

A filing from the groups Common Cause, Consumers Union, New America’s Open Technology Institute, Public Knowledge and Writers Guild of America West essentially agreed with the American Antitrust Institute’s findings, noting removing two market disruptive competitors by combining them into one would hurt novel wireless plans that are unlikely to be introduced by companies going forward.

Rivals, especially AT&T and Verizon, have remained silent about the merger. That is not surprising, considering T-Mobile and Sprint have forced the two larger providers to match innovative service plans, bring back unlimited data, and reduce prices. A combined T-Mobile and Sprint would likely reduce competitive pressure and allow T-Mobile to comfortably charge nearly identical prices that AT&T and Verizon charge their customers.

Smaller competitors are concerned. Rural areas have been largely ignored by T-Mobile, and Sprint’s modestly better rural coverage has resulted in affordable roaming arrangements with independent wireless companies. Sprint has favored reciprocal roaming agreements, allowing customers of independent carriers to roam on Sprint’s network and Sprint customers to roam on rural wireless networks. T-Mobile only permits rural customers to roam on its networks, while T-Mobile customers are locked out, to keep roaming costs low. Groups like NTCA and the Rural Wireless Association shared concerns that the merger could leave rural customers at a major disadvantage.

Many Wall Street analysts that witnessed the AT&T/T-Mobile merger flop are skeptical that regulators will allow the Sprint and T-Mobile merger to proceed. The risk of further consolidating the wireless industry, particularly after seeing T-Mobile’s newly aggressive competitive stance after the AT&T merger was declared dead, seems to prove opponents’ contentions that only competition will keep prices reasonable. Removing one of the two fiercest competitors in the wireless market could be a tragic mistake that would impact prices for a decade or more.

The American Antitrust Institute reminded regulators:

In 2002, there were seven national wireless carriers in the U.S.: AT&T, Verizon, Sprint, T-Mobile, Nextel, AllTel, and Cingular. In a consolidation spree that began in 2004, Cingular acquired AT&T. This was followed by Sprint’s acquisition of Nextel in 2005—a merger that has been called one of the “worst acquisitions ever.” At the time of the merger, Sprint and Nextel operated parallel networks using different technologies and maintained separate branding after the deal was consummated. The company lost millions of subscribers and revenue in subsequent years in the wake of this costly and confused strategy.

In 2009, Verizon bought All-Tel. This was followed by AT&T’s unsuccessful attempt to buy T-Mobile in 2011 and T-Mobile’s successful acquisition of mobile virtual network operator (MVNO) Metro PCS. The DOJ and the FCC forced the abandonment of the AT&T-T-Mobile deal. Like Sprint-T-Mobile, it was also a 4-3 merger that would have eliminated T-Mobile, a smaller, efficient, and innovative player that set the industry bar high for the remaining rivals.

AT&T’s rationale that the merger with T-Mobile was essential for expanding to the then-impending 4G LTE network technology also did not pass muster. In August of 2014, two years after the abandoned attempt, Forbes magazine concluded that there would have been “no wireless wars without the blocked AT&T-T-Mobile merger.”

T-Mobile, Verizon Wireless Achieve Top Scores in Mobile Performance Report

Mobile broadband performance in the United States remains nothing to write home about, achieving 43rd place worldwide for download speeds (between Hong Kong and Portugal) and a dismal 73rd for upload speed (between Laos and Panama). With this in mind, choosing the best performing carrier can make the difference between a tolerable experience and a frustrating one. In the first six months of 2018, Ookla’s Speedtest ranked T-Mobile and Verizon Wireless the two top carriers in the U.S.

From January through the end of June, 2,841,471 unique mobile devices were used to perform over 12 million consumer-initiated cellular network tests on Speedtest apps, giving Ookla insight into which carriers consistently performed the best in different cities around the country. The results showed average download speed of 27.33 Mbps, an increase of 20.4% on average since the same period in 2017. Upload speed achieved an average of 8.63 Mbps, up just 1.4%.

Achieving average speeds of 36.80 Mbps, first-place Minnesota performed 4 Mbps better than second place Michigan. New Jersey, Ohio, Massachusetts and Rhode Island were the next best-performing states. In dead last place: sparsely populated Wyoming, followed by Alaska, Mississippi, Maine, and West Virginia.

T-Mobile’s heavy investment in 4G LTE network upgrades have clearly delivered for the company, which once again achieved the fastest average download speed results among the top-four carriers: 27.86 Mbps. Verizon Wireless was a close second at 26.02 Mbps. Verizon’s speed increases have come primarily from network densification efforts and equipment upgrades. Further behind was AT&T, achieving 22.17 Mbps, and Sprint which managed 20.38 Mbps, which actually represents a major improvement. Sprint has been gradually catching up to AT&T, according to Ookla’s report, because it is activating some of its unused spectrum in some markets.

Your Device Matters

Which device you use can also make a difference in speed and performance. In a match between the Apple iPhone X and the Samsung Galaxy S9, the results were not even close, with the Samsung easily outperforming the popular iPhone. The reason for the performance gap is the fact Samsung’s latest Galaxy phone has four receive antennas and the iPhone X does not. The iPhone X is also compromised by the total amount of LTE spectrum deployed by each carrier and the fact it cannot combine more than two spatial streams at a time. Until Apple catches up, iPhone X users will achieve their best speeds on T-Mobile and Verizon Wireless, in part because Verizon uses more wideband, contiguous Frequency Division Duplex (FDD) LTE spectrum than any other carrier, which will allow iPhone users to benefit from the enhanced bandwidth while connected to just two frequency blocks. The worst performing network for iPhone X users belongs to Sprint, followed by AT&T.

 

Rural vs. Urban

For customers in the top-100 cities in the United States, T-Mobile and Verizon Wireless were generally the best choices, with some interesting exceptions. AT&T and Verizon Wireless generally performed best in areas where the companies also offer landline service, presumably because they are able to take advantage of existing company owned infrastructure and fiber networks. Verizon Wireless performed especially well in 13 states in the northeast, the upper midwest (where it acquired other cellular providers several years ago), Alaska, and Hawaii. AT&T was fastest in four states, especially the Carolinas where it has offered landline service for decades, as well as Nebraska and Nevada. Sprint outperformed all the rest in Colorado, while T-Mobile’s investments helped make it the fastest carrier in 31 states, notably in the southeast, southwest, and west coast cities.

The story rapidly changes in rural areas, however. Almost uniformly, speeds are considerably slower in rural areas where coverage and backhaul connectivity problems can drag down speeds dramatically. In these areas, how much your wireless provider is willing to spend makes all the difference. As a result, T-Mobile’s speed advantage in urban areas is dramatically reduced to near-equivalence with Verizon Wireless in rural communities, closely followed by AT&T. Sprint continues to lag behind in fourth place. No speed test result means a thing if you have no coverage at all, so rural customers need to carefully consider the impact of changing carriers. Always consider a 10-14 day trial run of a new provider and take the phone to places you will use it the most to make sure coverage is robust and reliable. Sprint and T-Mobile’s roaming agreements can help, but in areas with marginal reception, the two smaller carriers still favor their own networks, even if service is spotty.

MSA-Metropolitan Service Area; RSA-Rural Service Area

Network Upgrades and the Future

In the short term, most wireless upgrades will continue to enhance existing 4G LTE service and capacity. True 5G service, capable of speeds of a gigabit or more, is several years away for most Americans.

T-Mobile

T-Mobile has invested in thousands of new cell sites in over 900 cities and towns to quash its reputation of being good in cities but poor in the countryside. Many, but not all of these cell sites are in exurban areas never reached by T-Mobile before. The company is also deploying its 600 MHz spectrum, which performs well indoors and has a longer reach than its higher frequency spectrum, which will go a long way to end annoying service drops in marginal reception areas. These upgrades should make T-Mobile’s service stronger and more reliable in suburbs and towns adjacent to major roadways. But service may remain spotty to non-existent in rural states like West Virginia. Most of T-Mobile’s spectrum is now dedicated to 4G LTE service, with just 10 MHz reserved for 3G legacy users. T-Mobile has set aside only the tiny guard bands for LTE and UMTS service for legacy GSM channels handling some voice calls and 2G services.

T-Mobile is also introducing customers to Carrier Aggregation through Licensed Assisted Access (LAA). This new technology combines T-Mobile’s current wireless spectrum with large swaths of unlicensed spectrum in the 5 GHz band. Because the more bandwidth a carrier has, the faster the speeds a carrier can achieve, this upgrade can offer real world speeds approaching 600 Mbps in some areas, especially in urban locations.

Verizon Wireless

Verizon Wireless is suffering a capacity shortage in some areas, causing speeds to drop during peak usage times at congested towers. Verizon’s solution has been to add new cell sites in these mostly urban areas to divide up the traffic load. In many markets, Verizon has also converted most or all of its mid-band spectrum to LTE service, compacting its legacy CDMA network into a small section of the 850 MHz band. With 90% of its traffic now on LTE networks, this week Verizon confirmed it will stop activating new 3G-only devices and phones on its network, as it prepares to end legacy CDMA and 3G service at the end of 2019. Once decommissioned, the frequencies will be repurposed for additional LTE service.

In the immediate future, expect Verizon to continue activating advanced LTE features like 256 QAM, which enables customers’ devices and the network to exchange data in larger amounts and at faster speeds, and 4×4 MIMO, which uses an increased number of antennas at the cell tower and on customers’ devices to minimize interference when transmitting data. How fast this technology arrives at each cell site depends on the type of equipment already in place. At towers powered by Ericsson technology, a minor hardware upgrade will quickly enable these features. But where older legacy Alcatel-Lucent equipment is still in use, Verizon must first install newer Nokia Networks equipment to introduce these features. That upgrade program has moved slower than anticipated.

Older phones usually cannot take advantage of advanced LTE upgrades so Verizon, like other carriers, may have to convince customers it is time to buy a new phone to make the most efficient use of its upgraded network.

AT&T

AT&T customers are also dealing with capacity issues in some busy markets. AT&T has a lot of spectrum, but not all of it is ideal for indoor coverage or rural areas. The company, like Verizon, is trying to deal with its congestion issues by deploying new technologies in traffic-heavy metropolitan markets. AT&T is using unlicensed spectrum in parts of seven cities, accessible to customers using the latest generation devices, to increase speeds and free up capacity for those with older phones. For most customers, however, the most noticeable capacity upgrade is likely to come from AT&T’s nationwide public safety network. This taxpayer-supported LTE network will be reserved for first responders during emergencies or disasters, but the rest of the time other AT&T customers will be free to use this network with lower priority access. This will go a long way towards easing network congestion, and customers will get access automatically as available.

At the same time, AT&T, like Verizon, is trying to deploy additional advanced LTE features, but has been delayed as it mothballs older Alcatel-Lucent equipment at older cell sites, replaced with current generation Nokia equipment.

Sprint

Sprint has done the most in 2017-2018 to improve its wireless network, especially its traditionally anemic download speeds. While still the slowest among all four national carriers, things have gotten noticeably better for many Sprint customers in the last six months. Sprint recently activated LTE on 40-60 MHz of its long-held 2.5 GHz spectrum, which has improved network capacity. Carrier Aggregation has also been switched on in several markets.

Unfortunately, Sprint’s 2.5 GHz spectrum isn’t the best performer indoors, and the company has also had to adjust frame configuration in this band. Sprint is the only Time Division Duplex (TDD) LTE carrier in the country. This technology allows Sprint to adjust the ratio of download and upload capacity by dedicating different amounts of bandwidth to one or the other. Sprint tried to address its woeful download speeds by devoting 30% more of its capacity to downloads. But this also resulted in a significant drop in upload speeds, which are already anemic. Sprint has been able to further tweak its network in some areas to boost upload speeds up to 50%, assuming customers have good signals, to mitigate this issue.

Sprint is also restrained by very limited cell site density and less lower frequency spectrum than other carriers. That means more customers are likely to share a Sprint cell tower in an area than other carriers, and the distance between those towers is often greater, which can cause more instances of poor signal problems and marginal reception than other carriers. Sprint’s best solution to these problems is a merger with T-Mobile, which would allow Sprint to contribute its 2.5 GHz spectrum with T-Mobile’s more robust, lower frequency spectrum and greater number of cell sites, instead of investing further to bolster its network of cell sites.

Verizon, AT&T, Sprint, and T-Mobile Have Been Selling Your Location to Just About Anyone

Go ahead, enjoy a free trial and locate (within 100 yards) your ex-boyfriend or girlfriend, husband, wife, or friends. This online demo had few security checks to keep unauthorized users out, despite claims consent was required. (Image courtesy of: Krebs on Security)

A company best known for providing phone service to prisoners and monitoring inmate locations has sold access to the whereabouts of almost every powered-on cellphone in the country without verifying a court order, thanks to a lucrative partnership with America’s top four cell phone companies.

The service, provided by Securus, has proved a handy tool for law enforcement agencies nationwide, allowing one former sheriff of Mississippi County, Mo., to track the whereabouts of a judge and members of the State Highway Patrol, all without their consent.

The New York Times reported in May that despite repeated assurances from cell phone companies that location data sold to third parties would not include personally identifiable information, it now appears in fact, it often does, and not just information about a particular company’s own customers.

Securus’ location service has been available since at least 2013, although some claim the service has been active for much longer than that, and after recent attention from Congress, Verizon, AT&T, and Sprint have announced they will suspend the sale of location data to most third parties as soon as contract termination notices can be sent.

The industry’s commitments to customer privacy appear to be tissue thin, based on the confidential contracts companies like Verizon and AT&T sign with third-party data aggregators, who in turn resell each provider’s location service to an even broader range of companies. Sen. Ron Wyden (D-Ore.) called the contracts “the legal equivalent of a pinky promise” in a letter sent to the Federal Communications Commission.

Verizon, T-Mobile, AT&T, and Sprint all have contracts with two of the country’s largest resellers of location data – LocationSmart and Zumigo. The contracts allow the two firms to pull cellphone users’ locations in real time and sell that information to other companies, including Securus. The contracts claim to need users’ consent before their location information can be revealed, which is either done in an app directly requesting location data or in a thicket of fine print terms and conditions most consumers never read. There is scant evidence cell phone companies independently audit consent records, which means a company or app author could claim blanket consent.

Securus never had a contact with many of the people it tracked — often those suspected of a crime or law enforcement officers. Securus operates its service under provisions permitting law enforcement to access location data without the consent of those being tracked, as long as the law enforcement agency attests to the legality of its request. Laws requiring court orders to track cellphone users vary considerably in different states. Some require a judge’s signature on a court order, others demand a notarized statement from a law enforcement official, while others require no independent review at all.

Cell phone companies may have a loophole to escape legal culpability for revealing private personal location information to unauthorized third parties. Privacy laws have never offered strong privacy protections to consumers for telecommunications services. In March 2017, the Republican majority in Congress stripped what privacy protections did exist during the Obama Administration in a mostly party-line vote condemned by Democrats. After the rules were repealed, mobile providers can track and share people’s browsing and app activity without permission. Several Democrats warned the move would lead to an eventual scandal when providers were caught collecting and selling sensitive personal information without customer consent.

As long as they are following their own voluntary privacy policies, carriers “are largely free to do what they want with the information they obtain, including location information, as long as it’s unrelated to a phone call,” Albert Gidari, the consulting director of privacy at the Stanford Center for Internet and Society and a former technology and telecommunications lawyer told the New York Times. If a cellphone is powered on, constantly updated location information accurate within a few hundred feet is available for sale.

Because cell phone companies work with third-party aggregators, they can claim any privacy violations could be the result of unauthorized or inappropriate use of their location tools. But finding which company ultimately violated a consumers’ privacy requires investigative work because services like LocationSmart also sell services to other aggregators, who in turn sell services to a myriad of companies. That is what appears to have happened with Securus, who accessed location services through a mobile marketing company called 3Cinteractive, which in turn has a contract with LocationSmart. That means a provider can claim at least three layers of possible third-party liability, because requests moved through several hands:

Example: Law enforcement agency request -> Securus -> 3Cinteractive -> LocationSmart -> Verizon

Although law enforcement agencies are supposed to upload legal documents proving informed consent laws do not apply to a particular request, it appears the validity of those documents was not independently verified.

“Securus is neither a judge nor a district attorney, and the responsibility of ensuring the legal adequacy of supporting documentation lies with our law enforcement customers and their counsel,” a Securus spokesman said in a statement. Securus offers services only to law enforcement and corrections facilities, and not all officials at a given location have access to the system, the spokesman added.

But those that did could abuse the system with few consequences. In fact, a security hole left open for a year by LocationSmart appears to have let almost anyone use the service to find friends, family, or anyone else, thanks to a helpful free demo for prospective clients revealed by Robert Xiao, a security researcher at Carnegie Mellon University:

LocationSmart’s demo is a free service (Editor’s Note: the demo has since been locked down) that allows anyone to see the approximate location of their own mobile phone, just by entering their name, email address and phone number into a form on the site. LocationSmart then texts the phone number supplied by the user and requests permission to ping that device’s nearest cellular network tower.

Once that consent is obtained, LocationSmart texts the subscriber their approximate longitude and latitude, plotting the coordinates on a Google Street View map. [It also potentially collects and stores a great deal of technical data about your mobile device. For example, according to their privacy policy that information “may include, but is not limited to, device latitude/longitude, accuracy, heading, speed, and altitude, cell tower, Wi-Fi access point, or IP address information”].

But according to Xiao, a PhD candidate at CMU’s Human-Computer Interaction Institute, this same service failed to perform basic checks to prevent anonymous and unauthorized queries. Translation: Anyone with a modicum of knowledge about how Web sites work could abuse the LocationSmart demo site to figure out how to conduct mobile number location lookups at will, all without ever having to supply a password or other credentials.

“I stumbled upon this almost by accident, and it wasn’t terribly hard to do,” Xiao said. “This is something anyone could discover with minimal effort. And the gist of it is I can track most peoples’ cell phone without their consent.”

Obtaining customer consent to share location details appears to not always be a priority of the location data resellers. For them, a lucrative business depends on easy access to location information that can be sold for targeted marketing campaigns (such as texting a coupon offer when entering a store or sending a special offer if you appear to be visiting a competitor’s store), tracking packages, service calls, or deliveries (such as tracking the cable repair technician, the location of your pizza, or where the parcel service driver is with a package you ordered), or allowing your bank to flag a suspicious credit card transaction when they discover your cellphone is nowhere near the store where the purchase just occurred.

Wyden

The personal risks of unauthorized access are too numerous to count, starting with former boyfriends or girlfriends cyberstalking one’s live location, criminals tracking a target, and law enforcement officials violating your rights.

The revelations in the New York Times, published on May 10, have attracted the sudden attention from America’s largest cell phone companies this week because of Sen. Wyden’s letter informing them they are under scrutiny. No cell phone company wants to endure the media spotlight Facebook has been under since revelations it exposed the personal data of as many as 87 million users without their consent. The carriers, except for T-Mobile, have announced a lock-down.

Verizon: Verizon Communications pledged to stop selling individual customer locations to data brokers, and will wind down contracts with LocationSmart and Zumigo, a competing data aggregator. “We will not enter into new location aggregation arrangements unless and until we are comfortable that we can adequately protect our customers’ location data,” Verizon privacy chief Karen Zacharia wrote in a June 15 letter to Wyden. Verizon did not explain why it took at least two years for the lock-down to begin.

AT&T: Said it “will be ending our work with aggregators for these services as soon as practical in a way that preserves important, potential lifesaving services like emergency roadside assistance.”

Sprint: “Suspended all services with LocationSmart” last month and “is beginning the process of terminating its current contracts with data aggregators to whom we provide location data.” A spokeswoman said that effort “will take some time in order to unwind services to consumers, such as roadside assistance and fraud prevention services.”

T-Mobile: Stopped short of terminating agreements, T-Mobile executives told Wyden it “started one of our periodic reviews several months ago and selected a third-party to assess this program.”

Securus: Securus spokesman Mark Southland said in a statement that the company adheres to its contract, adding that cutting off law enforcement access to location tools “will hurt public safety and put Americans at risk.”

Read the full letters from America’s top-four mobile companies:

Sprint Offering $15/Mo Unlimited Call/Text/Data Plan to New Customers… Until Friday

Sprint debuted its new $15/month Unlimited Kickstart plan on June 7th, and will stop taking new orders for it tomorrow evening, making it one of Sprint’s shortest-lived plans ever.

The plan, intended to steal customers from competitors, offers those bringing a qualified device (or buying one) the opportunity of paying just $15 a month for unlimited talk, texting, and data, with some caveats:

  • Video streams are throttled to support up to 480p, music streams are limited to 500 kbps, and gaming streams don’t exceed 2 Mbps.
  • Customers on this plan are subject to speed throttles, known at Sprint as “data deprioritization” when towers are congested, regardless of usage.
  • Customers must enroll and maintain autopay.
  • Requires customers to sign up for a new line, port an existing number, and either bring your own device or buy one from Sprint.

Unlimited Kickstart gives Sprint a chance to report a big boost in new customer signups during its next quarterly report to Wall Street. But the company claims the plan also allows customers of other carriers the opportunity of sampling Sprint’s upgraded network, or return to Sprint as an ex-customer to see how the network has improved. There are no contracts, and the offer also extends to other family members — each line up to four will cost just $15/month.

Sprint will attempt to upsell customers to its Unlimited Freedom plan, which offers more features at a higher price.

“At Sprint, we’ve worked incredibly hard to improve our network,” the company claimed in a press release. “In fact, Sprint’s national average download speed increased 34.5 percent year-over-year, more than any other national carrier. Plus, we’ve increased our investment to make our coverage, reliability and speed even better as Sprint prepares to launch the first mobile 5G network in the U.S. in the first half of 2019.”

The company claims interest in the offer is extremely heavy, but the press release announcing it also mentioned an expiration date for enrollees of Friday night (June 15) at 11:59pm EDT, which means time is running out. Customers have to sign up for the offer online, which isn’t particularly intuitive. A Live Chat button is located on the web page which may offer some help to those trying to enroll. If you own a qualified phone already, or acquire a new one, you will need to acquire a Sprint SIM card to activate the plan no later than June 22, 2018.

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  • Mike W.: They are not doing the right thing by any means. This is simply a PR stunt to make them look good to everyone who doesn't realize this is a BS progra...
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