The Smart Phone Con Job: Your So-Called 4G Phone Isn't What It's Cracked Up To Be

The FCC and other federal agencies are reviewing AT&T’s application to acquire T-Mobile wireless business for $39 billion. Given the deference they show toward America’s largest corporations, this deal will in all likelihood go through.

In our previous article, "The Secret $8 Billion Wireless Scam," we argued that the merger should be stopped. Going further, we recommended that the giant telecommunications conglomerates (e.g., AT&T and Verizon) should be divested of their wireless businesses. The “communications trust” should be broken up.

AT&T’s acquisition of T-Mobile is a good place to start the “break ‘em up” campaign. It will further increasing consolidation within the wireless market. The U.S. Senate Judiciary Committee held a hearing on May 11 on the merger. It was cleverly titled, "The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?"  

At the hearing, Chairman Patrick Leahy (D-VT) raised a fundamental challenge: “At present, four companies control nearly 90 percent of the national wireless market. The proposed acquisition would further consolidate an already concentrated market for wireless communication.”   

The four companies that control the market (and their estimated market share) are AT&T (26.8 percent), Verizon (26.0 percent), Sprint (22.9 percent) and T-Mobile (11.0 percent). With the merger, AT&T (44.0 percent) and Verizon (30.5 percent) will control nearly three-fourths of the market; Sprint’s share will increase to 16 percent and the rest of the providers will drop to 6.3 percent.

At the hearing, the good senator naïvely stated, “AT&T represented to me that within two years, this acquisition will result in 250,000 more Vermonters having access to its 4G service than would otherwise be serviced by either company on its own.” If he only knew the true history of what is called “4G service,” he would have most likely probed deeper into AT&T’s service offerings.

Do you have a “4G” cellphone?  If so, you got taken.  

4G stands for “fourth generation” and signifies what telecom marketers promote as the cutting-edge of wireless communication. In the three decades since the first mobile telephones were introduced, there has been a sustained and significant increase in performance. Carriage shifted from analog to digital, transmission speeds increased and users were offered more services or functions. However, as this occurred, hype replaced performance and Americans got conned.

A short history of the U.S. wireless system illustrates how today’s con job occurred. More importantly, it suggests a leverage-point at which senators like Leahy, Al Franken (D-MN), Amy Klobuchar (D-MN), Herb Kohl (D-WI) and others can block the AT&T/T-Mobile merger or at least hold Humpty Dumpty’s feet to the proverbial fire.

Wireless "generations" are established through industry consortia or an international standards organization. The first or “1G” wireless phones introduced in the 1980s were big, bulky Motorola phones offering analog voice services. Foretelling the future, the ‘60s TV show “Get Smart” spoofed wireless phones with Agent Smart’s shoe phone; Hollywood writers knew more about the future than the engineers at AT&T. By the ‘80s, Moto introduced phones as big as a golf shoe and as heavy as a bowling ball.  

In the ‘90s, a real breakthrough in wireless technology occurred with the introduction of the first digital cellular networks, called “2G.” It offered data rates of 14.4 kbp/s with improved sound quality, better security, higher capacity and even text messaging.