Did US mobile operators collude to kill the kill switch to keep subscriber insurance premiums high?

Dec 12, 2013

Attorney General Eric Schneiderman has written to the CEOs of AT&T, Sprint, T-Mobile USA, U.S. Cellular and Verizon asking for information about complaints that none of the mobile operators is supporting Samsung 'kill-switch' technology and to ask why all five of the service providers seem to have acted in concert in this regard.

The move comes after the District Attorney of San Francisco, George Gascon, went public to announce that he has seen emails sent between a senior Samsung executive and a software engineer claiming that US mobile carriers are colluding to prevent Samsung loading the kill switch on to its handsets so that they can continue to sell theft and loss insurance policies that are very expensive for subscribers but very lucrative indeed for the operators.

In a statement, Mr. Schneiderman of New York said, “If carriers are colluding to prevent theft-deterrent features from being preinstalled on devices as means to sell more insurance products, they are doing so at the expense of public safety and putting their customers in danger."

So far only Verizon Wireless and Sprint have made any public comment on the allegations but neither address the central concern about inter-carrier collusion. Both say they are not intrinsically against the embedding of anti-loss and anti-theft software in Samsung handsets but Verizon adds that it will support such an app for Android-powered phones "if and when a manufacturer come up with such a solution". For its part Sprint said it has "technical concerns" about the Samsung software but fails to say what they are.

The other three mobile operators have refused to talk on the record.

The basis of the Attorney General's suspicions and his consequent investigation letter to the CEOs is the strange coincidence whereby all five mobile service providers decided, separately it is claimed, but all within a couple of days of one another, not to accept the Samsung app.

Mr. Schneidrman points out that all five of the carriers are influential members of the CTIA, the industry trade association whose public policy is to oppose the very notion of a kill-switch. It seems the ability of a subscriber to render his or her handset inoperable if lost or stolen will kill the goose that lays the golden insurance egg. Mr. Schneiderman adds that Asurion, the company that actually provides loss and theft insurance products to all major US mobile carriers also has close links to the CTIA.

In his letter, the Attorney general specifically asks the CEOs if they have been in communication with one another, the CTIA and/or Asurion in the matter of Samsung's kill switch software. He also wants a detailed business rationale for the service providers refusal to accept the app. Answers are required by December 31.

The theft of mobile handsets is an endemic, spreading and increasingly violent crime in many parts of the US and Messrs. Schneiderman of New York State and Gascon of San Francisco have been prime movers in the formation of the Secure Our Smartphone (SOS) alliance - a coalition of lawmakers, law enforcers, elected officials, consumer groups and subscribers designed to put pressure on manufacturers and operators to provide kill switch apps embedded in handset software.

The SOS mission statement says, "Unlike other types of crimes, manufacturers and carriers have the ability to end the growing number of smartphone thefts with a technological solution. The implementation of a "kill switch" would render stolen devices inoperable on any network, anywhere in the world. By eliminating the ability for the phone to be reactivated, the incentive to steal them would be eliminated."

Samsung has acted and has the software means available. So too has Apple. The latest iteration of the iPhone operating system, iOS 7, provides handset owners with the ability completely to disable a lost or stolen phone, and then (should it be found and returned to the rightful owner) to reinstate and reativate it.

The CTIA's preferred solution is as venerable as it is reactionary: A 'black list' of lost and stolen handsets that operators will oversee and police. Law enforcement agencies point out that such a list, even if one could be constructed, would be permanently out of date and about as much use as a chocolate teapot.

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