Monday, March 21, 2011

AT&T-Mobile - why it's a terrible thing

Yesterday brought news that the owners of T-Mobile USA, Deutch Telekom, have decided to sell their US operations to AT&T. AT&T will take over the fourth largest network in the US becoming the largest operator in North America. Even from a competitive standpoint, this is clearly not a great thing, but from a technical and innovation standpoint, it's probably the worst thing that could happen, short of Verizon Wireless buying T-Mobile. Here's why.

Some US mobile history

The US mobile industry wasn't really going anywhere until the US auctioned off some so-called PCS spectrum in the mid nineties. Before that, spectrum shortages resulted in there being a maximum of two operators in each location, and no national operators because of the political decisions that had been made when allocating that spectrum. PCS was an opportunity to move forward, almost any entity could bid on it, as long as they were prepared to deploy a public, digital, cellular mobile phone system.

A huge number of companies were formed who bought this spectrum and started using it. The biggest, if I recall correctly, were the existing cellular operators and landline operators, Sprint, Omnipoint, and VoiceStream, the latter pair being entirely new companies, and Sprint being owned by the famous long distance operator but otherwise run as a new company.

Immediately upon existing, PCS operators had to choose a technology to base their networks upon. Three candidates were available. D-AMPS or IS-136, also known, misleadingly, as TDMA, was the immediate "successor" to the AMPS analog mobile phone system. cdmaOne or IS-95, also misleadingly known as CDMA, was a Qualcomm designed alternative successor to AMPS. Both systems were designed as basic upgrades to AMPS, using a similar model. Finally there was GSM, which had an entirely different heritage. GSM is a mobile version of ISDN, and at the time was probably the most advanced, reliable, digital mobile system in the world.

The three standards had different strengths and weaknesses.
  • For hardware cost and support (low to high), the order would probably have been GSM, D-AMPS, cdmaOne.
  • For spectrum efficiency (high to low), the order would probably have been cdmaOne, D-AMPS, GSM, although direct comparisons were always difficult between the three standards - GSM was very easy to scale, as long as building new towers wasn't a problem. Of course, very often, it is, and easy or not, it's expensive!
  • For integration with analog networks (important to existing operators), cdmaOne and D-AMPS did it, and GSM didn't.
  • In terms of user features (advanced to crappy), GSM was way ahead of the other two, which were more or less equal at the time - GSM already supported data and messaging, which came to cdmaOne much, much, later, and GSM supported other features too like the SIM card based "personal mobility" system that have yet to be supported by any operator of cdmaOne or its successors
That last thing was almost certainly the deciding point for many PCS operators but not in the way you'd expect. GSM offered users options. It allowed users to buy a phone from anywhere, and as long as it was a real GSM phone, and supported the operator's spectrum, they could just plug their SIM card into it, and it would work.

For many operators, perhaps even a majority of the smaller start-ups, this was definitely a feature. They could sell advanced phones with advanced features out of the gate, and their customers could take advantage of the latest technologies without them doing a thing. From their standpoint, openness was a good thing.

For others, they took a corporate standpoint that more freedom for their customers meant less options for themselves. They wanted to control the mobile experience for their customers as much as possible.

Operators that were already in existence when PCS came into being generally split between cdmaOne and D-AMPS, usually based upon whether they were already rolling out a D-AMPS network or not, but the reality was that they seemed like to make that pick anyway - these were companies with conservative outlooks, who were less interested in providing new services than they were in capturing markets and keeping people locked to them.

Newer companies, such as Sprint, divided into two camps. Those companies that wanted to provide advanced services to their customers generally standardized on GSM. Those, however, who wanted more flexibility when it came to marketing - especially those offering all-you-can-eat, or very low cost talk plans, went with cdmaOne, where they could control what phone you used, and where things like data were considered - at a time when most Internet access was dial-up - to be a liability.

Who picked what? Today's AT&T is made up of Cingular, which itself was an alliance of several cellular networks owned by Baby Bell companies, and AT&T Wireless, which, for all intents and purposes, is not the same company. AT&T has standardized on GSM, but originally almost all of its ancestors standardized on D-AMPS, and made reluctant switches to GSM in the early part of the last decade after being pressured by equipment operators.

Today's T-Mobile comprises of almost all of the original GSM operators, including Omnipoint and Voicestream, with the exception of BellSouth Mobility DCS (part of AT&T), and some minor companies that were swallowed by the major cdmaOne operators.

Today's Sprint PCS is... well, the original Sprint PCS. They bought Nextel, a non-PCS operator that uses a system called iDEN which has some GSM parts, but is mostly a proprietary standard, but their major network uses cdmaOne, with Nextel being operated almost as a separate business.

Today's Verizon is a merger of almost all the other Baby Bell-owned cellular and PCS companies. These companies standardized on cdmaOne early on, and Verizon uses it and its successors.

What does this mean?

Well, of the four, only two has a heritage in independent companies, and only one of those two made technology choices based upon giving the customer options. That company, of course, is T-Mobile.

How does that translate in practice?

T-Mobile is the only open network

Say it with me: T-Mobile is the only open network. They're the only US network that genuinely has a commitment to letting you get your own equipment on board and letting you use it. That's not hype, it's not "True in theory, not in practice", they really mean it. They make mistakes on this from time to time, but I've never seen them stick it out when they've done so.

How open are they? Well, what if I were to tell you that if you want to install a custom operating system on your Android phone, one of the first places to go is... T-Mobile's own forums?

T-Mobile was, of course, Google's chosen operator for the roll-out of the first Android phone. Google was, of course, competing with Apple, trying to produce an alternative to the iPhone. While the iPhone's operating system would only be available on iPhones, Android would exist on all kinds of phones. While the iPhone would be locked to a single operator, Android phones would be available for every operator. While Apple would decide what software you're allowed to use on an iPhone, Android phones would leave the decisions up to you, the owner of the device.

These were important differentiations, representing the fact that the difference between the iPhone and Android system was rooted in philosophical differences even more than technologies; but it's open to question whether any of the existing operators would have even accepted the first Android phones in the way T-Mobile did? While they expressed an interest, Apple had justified many of its decisions concerning the iPhone by claiming that they'd been done to "protect" AT&T's network. It's hard to imagine, with Android's biggest competitor being so heavily crippled, that Verizon or AT&T or Sprint, none of whom had expressed any interest in openness before beyond vague statements of principle, would have allowed Android onto their networks without significant changes.

T-Mobile opened the door, and that almost certainly lead to a loosening once the other operators saw that Android was popular, that it wasn't causing any real problems with their networks, and that it has huge potential. The remaining three operators jumped on board the Android train a few months later.

AT&T doesn't have the right attitude

So, let's be clear here. I don't want to completely blame AT&T for the locked down nature of the iPhone - the iPod Touch and Wifi-iPad are similarly locked down for no good reason, but certainly "protecting AT&T's network" has come up numerous times as an explanation for at least some of the sealed nature of the iPhone device, and that's not an excuse that would have any traction if AT&T didn't express those concerns to Apple. "Open phones" have never really been a thing AT&T was particularly happy about. Outside of basic J2ME functionality, most AT&T phones were locked down, and, before the iPhone, AT&T's data pricing options seemed to be based upon the idea that you wouldn't use them.

Open is good

Anyone reading my blog knows my views on providing users with as much freedom as possible. Freedom doesn't just help users in terms of how much they can do, it also helps foster innovation and competition.

My view is that AT&T swallowing T-Mobile is a very bad thing because what we're seeing is the last pro-openness mobile network in the US closed down, effectively. This means, in practice, that Android may well be the last seriously innovative technology to be released in the US that makes heavy use of mobile networks.

So I'm hoping that, for whatever reason, the merger falls through. I want T-Mobile to survive as an independent company. And if that's not possible, I'd rather T-Mobile takes over Verizon, than AT&T take over T-Mobile.

1 comment:

  1. An great viewpoint on the issue, rather than nailing it down to just folks feelings, att's migration to gsm came late, looking back its hard to believe it only recently happened in the past decade, however poor coverage is a result, had folks stayed with d-amps or amps, there would not be a problem with cdma areas and gsm areas in the US, circuit switched is going wayside, but carrier's internet coverage and open access is not a sure thing, in addition recall how att treated d-amps customers who at the time had better plans.

    Carriers want money even when nudged, unfortunately there is little alternative, carries make poor decisions, regret it, change and invest in new technology and regress, for instance sprint nextel was a disaster, obviously IDEN was going wayside as data was the new thing happening, but it worked, and nextel was working on flash ofdm tech, which basically data without EVDO's latency, that would have solved communication timing, turns out for a while sprint kept evdo until recent.

    We're going back to ma bell only its a regional ma bell.