Saturday 5 November 2005

Mobile Operator Subsidies will Decline

In some countries, the least expensive way to buy a mobile phone is with a contract. Even if you're Paris Hilton. When one adds up the cost of a 12 monthly payments, the phone often still costs a consumer less to buy than they could buy it without a contract. Look at the secret deals a mobile operator will often offer at the end of a contract to customers who are quite happy with their current phone. Threaten to switch operators you might get offered a contract which is effectively free for the following year.

The reason, of course, is operator subsidy. The operator sells the consumer a phone for below cost price -- sometimes even free -- in order to lock them into a 12, 18, or 24 month contract. Some 30% of the published monthly contract price is accounted for by subsidy clawback. This is a classic razor and blades business model.

Operators have huge buying power and so can source the devices for far less than a consumer would pay. Operators will also usually ensure that the phone is locked to their network, making it difficult for a consumer to switch service to another operator -- known as a SIM lock. Such subsidy business models are common in countries like the UK, Germany, and to an extent the US (at least for GSM operators). They are however illegal in some other countries.

However, this is changing. Although many consumers are happy to upgrade their phone every year -- essentially as a fashion statement -- increasing numbers of people are wising up to the way the industry works. They've realized that they can pay far less by keeping their phone and negotiating a lower tariff. This shift has been enabled by two key factors:
  1. Back-street unlockers -- the ability to remove the SIM lock, allowing the user to switch operators.
  2. Number portability -- the ability to move to another operator yet keep one's number, which is a strong bargaining chip.
In the future, subsidies will become smaller and much less common. For example, in the UK we've already seen subsidies disappear for phones without a contract (i.e. pay-as-you-go). Contract subsidies are sure to follow over the next few years.

Wednesday 2 November 2005

Inside a 419 scam


You may have heard of "419 scams." You've almost certainly received spam containing a 419 come-on.

419s are also known as Advance Fee Fraud. It gets its name from section 419 of the Nigerian criminal code. The basic idea is that someone gains your trust, promises you lots of money, but needs you to cover a few expenses first. Naturally, they take the "expenses" and disappear.

We've all made the occasional slip-up in email -- sending things we didn't mean to send to people we didn't mean to send them to. Our 419 friends are no exception. Recently, we received the following email from Nigeria. It seems to be one scammer talking to another. Enjoy! [read more]

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Computerworld has been sending me articles for several years, and today, I finally read one - and found - surprise - blogs! But good ones. Really, really good ones. Say Hello To Blogwatch [more]

Judi and I humbly thank you. And grin foolishly for a bit.

Tuesday 1 November 2005

More on CAN-SPAM

Yesterday, I blogged about the CAN-SPAM Act and how some people think it's a lame duck. Here are some more thoughts...

It's a myth that "unsubscribing from spam gets you more spam." It's certainly true that tests have shown that submitting new spamtrap addresses to some spammers' unsubscribe forms means that spam gets sent to those addresses, but the nature of spammers is that it's more trouble than it's worth to try and weed out dead addresses. It's unfortunate that the industry has told people not to unsubscribe.

It's also a myth that CAN-SPAM allows you to "spam until you get an opt out" -- legal, legitimate direct marketers may only send unsolicited email to those who have given permission for their email to be sold to such marketers.

There are many potential holes in the above, but in my experience users can tell fairly well which solicitations are legitimate and which aren't. In other words, they're quite capable of unsubscribing from most legitimate DM.

CAN-SPAM simply does not permit spammers to spam. More to the point, it clearly codifies the spam problem as US residents experience it: the vast majority of spam breaks these rules and so is illegal in the US:

  • Thou shalt not harvest
  • Thy subject shalt not be deceiving
  • Thou shalt not be untruthful in headers
  • Thou shalt include thy physical address (not a PO box)

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How do spammers find your email address?

In my last post, I talked about how spammers send spam. This time, let's see how they decide whom to send it to. First, they need your email address. How are they going to get that? It's not as if you go to their website and ask to be spammed:
Spam Form
Hopefully not, anyway. There are three main ways that spammers get your email address... [read more]

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Monday 31 October 2005

Jury still out on CAN-SPAM

This fine chap, Dana Blankenhorn says The CAN-SPAM Act enables spam. Come again, Mr. B?
It legalized specific forms of spam, it overturned stiffer state laws, and it has gone unenforced. The primary enforcement of this "law" has come from private parties. Microsoft, which urged the act's passage, has been the most aggressive ... The likelihood of this being effective in stopping spam is nil ... Shaming corporations into policing their distribution channels and re-sellers would get rid of another hunk. [more]
I think Dana goes too far. This open letter says why...

1. CAN-SPAM sets a good minimum behaviour bar

Few laws please all the people all the time, but CAN-SPAM does bring some useful tools to the spam fighting table, including making the following illegal:
  • harvesting
  • forging headers
  • misleading subjects
  • contracting with spammers (and ignorance is no defense)
It also enables law enforcement to "follow the money" so offshore spammers and those who contract with them aren't safe.

2. Legitimate, permission marketing is not spam

I simply can't agree that "the CAN-SPAM act has done more to enable spam than any other act by anyone." It did not legalize any form of spam that I recognize. I can't understand how you can feel like that, unless you are of the opinion that any form of permission direct marketing is bad. True, it gives no remedy to those who have inadvertently given permission to resell their email address to 3rd parties, which has been better addressed here in the European Union.

3. Civil enforcement and state pre-emption

As to private or civil actions, that's a good thing in a capitalist society. These are organizations that are more motivated to go after spammers than Big Government.

I don't agree that CAN-SPAM has "gone unenforced." All the high profile actions to date have been against the state laws (now largely pre-empted). There are several CAN-SPAM actions in the pipeline right now.

Gathering evidence, finding spammers, and prosecuting them takes time. If you'll pardon the pun, the jury's still out on CAN-SPAM. I'm much more hopeful than you that it and other laws will significantly dissuade spammers.

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Sunday 30 October 2005

New Pace Twin update

At long last there's a firmware update being broadcast for the Pace Twin (a Freeview/DVB-T hard disk PVR). Early reports indicate:

  • EPG works better
  • FF and Rew more reliable
  • Less picture stuttering
  • Fix for the 0 second recording problem after power fail
  • Faster MHEG text
  • Hasn't broken TwinRIP
Broadcast scheduled only for the weekend though. If you want to be on the bleeding edge, don't delay. I expect it'll be repeated later.

Update: It's over, but it looks like the next broadcast will start 10am November 17th until 9am November 21st.

Digital Spy discussion is here.