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Michael Scott

Michael Scott

Writer, Safehaven.com

Michael Scott majored in International Business at San Francisco State University and University of Economics, Prague. He is now working as a news editor for…

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The Tech That Telecom Giants Fear Most

Tech

When a rival mobile phone carrier starts advertising a better deal, it prompts a flurry of attempted consumer switches, but for many the task of switching over is so complicated that it stops before it starts. So, when a new technology emerged that would make it easier, the giant telecoms companies panicked.

Now, the Justice Department has launched an investigation to determine whether AT&T and Verizon have colluded with a third party to undermine the new technology, eSIM, which would make switching carriers possible without a new, physical SIM card.

AT&T and Verizon stand to lose a lot of customers—enough so that the Justice Department suspects these two rival enemies may have worked together to stop eSIM from happening.

What is eSIM?

Quite simply, it’s the embedded, electronic version of a SIM card. And many are probably wondering why, in this digital era, we don’t already have this. The answer is as simple as the definition: Because it would wreak havoc with the telecoms giants and they don’t want it. But they can only hold off the inevitable for so long …

Apple, for one, is using eSIM to add connectivity to the Apple Watch Series 3 because it means no physical SIM card, and thus no SIM card slot, which the watch couldn’t handle.

The eSIM would mean that the SIM card is integrated and cannot be removed from a device. That also means that switching operators would only take a phone call, or an online order. It would be immediate and hassle free. Related: Financial Sector Reports Record Profits

In other words, far too easy to shop around for better deals.

Where Things Went eWrong

Until the situation got out of control, from the perspective of giant carriers, the GSMA worldwide network operators association was promoting eSIM as the new standard in mobile communications. And now GSMA is included in the investigation.  

Earlier this week, the GSMA put its eSIM plans on hold after the U.S. Department of Justice announced an investigation into the possibility that AT&T and Verizon were colluding to hinder the development of eSIM.

Contracts with carriers would become extremely complicated with eSIM, and the association said that American eSIM users would have to agree to honoring their carrier-locked eSIM in line with their contract. That would render the eSIM useless, with the exception of the design element of not having a SIM-card slot.  

‘Collusion’: Why the DOJ Is Investigating

The DOJ has reportedly demanded details from AT&T, Verizon and GSMA, with the New York Times saying that the three are suspected of possible collusion to impede the adoption of eSIM.

More specifically, NYT noted that the DOJ is looking into whether AT&T and Verizon have been working with GSMA to ensure that their devices would remain locked even if phones used eSIM technology.

The newspaper cited two unnamed sources—one a device maker and the other a wireless carrier—as having complained to the DOJ, thus leading to an investigation and prompting additional complaints.

According to Bloomberg, citing anonymous sources, one of the complaints originated from Apple, which would make sense. 

T-Mobile and Sprint are also under scrutiny, according to CNBC.

For now, everyone is cooperating, with Verizon calling it a “difference of opinion” and “much ado about nothing”, and AT&T saying they are “aware” of the investigation.

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While the attempt is to downplay the investigation at this point, it’s not likely to escape the public eye because the public wants more control over the service it pays for, and eSIM would have given it that.

Contracts are the bane of consumer existence, and eventually the eSIM will come through; and if it comes through with rigid contracts that make unlocking devices impossible, someone else will come up with a better, no-contract deal to change the playing field.

By Michael Scott for Safehaven.com

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