Are the mobile companies getting away with poor service, operating as as cartels and supporting cruel labour practices in the name of cheaper phones?

Blackberry's recent data server outage left millions of people without their emails or access to the Internet for several days. Blackberry said 'sorry' but is that enough? Meanwhile, as Nokia launched its new Windows smartphone, its PR succeeded in focussing the journalists on the excitement of new apps. The mobile companies are conspicuously silent on the allegation that phone manufacturers are supporting the most horrifying labour conditions to mine essential minerals for the smartphone chips, and potentially financing the civil war in the Congo.

The allegation comes in a new film called Blood in the Mobile, by the Danish documentary director Frank Piasecki Poulsen. Mr Poulsen follows the trail of mobile phone component minerals into the Congo and films the working conditions of the miners. He suggests that the profits from mining are funding the Congolese civil war. His point is that blood money is being paid in Africa, so that we can get cheaper phones to play with.

The Blackberry server outage began on 11 October 11 until 14 October, and affected users worldwide. It signals to us that email is now an essential service on which millions of people rely. In the US, some people are filing law suits against RIM (the manufacturer of Blackberry smartphones).

It begs the question whether the mobile industry reached a point where it should be scrutinised by regulators? Email and mobile data are no longer just the 'added value' which could be given low priority.

The mobile phone industry has been largely unregulated since they began in the 1980s. The regulation they do have to obey relates to the infrastructure, but in terms of service provision, it is minimal compliance.

In the beginning the rationale had a sound basis. There were no phones and no masts to provide the signal. Competition between two or more operators was thought to be sufficient to achieve widespread coverage and price-points which would result in consumer take-up.

Now, the market is mature, and the only competition is on price. Price competition fuels lower component prices, and cost cutting on operations. Hence, the appalling labour conditions for the miners of component minerals are tolerated and overlooked. Services can fail, without the operators needing to be too concerned about the public perspective.

Mobile phone operators even get away with censoring content and restricting services - and the public don't even know. Potentially, they could block the film which exposes their bad practices - and would not suffer any ill-effect. The companies act like cartels, and all impose the same restrictions, thus any regulatory argument of consumer choice begins to lack credibility.

As they are poised to hand out new spectrum licences, policy-makers should give serious thought to what rules should apply.

I do not advocate large-scale lawsuits against smartphone-makers. But I do think it is appropriate for regulators to scrutinise and audit mobile services, and call the industry to account. Instead, what we have is lazy, politically-motivated regulators, who are only too keen to jump into bed with the mobile service providers (Ofcom in the UK is a salient example).

As I write this, a new piece of legislation is being revised by the EU Council. This is the Radio Spectrum Policy Programme, which sets out the rules for the foreseable future of mobile services. In other words, the underlying structure which will determine what kinds of mobile services we will get.

The European Parliament had voted to adopt rules which would open the way for a more equitable distribution of spectrum, ensuring that not only the large corporate mobile companies, but citizens and community groups, could have access to spectrum for new services.

Guess what? Just as happened in the Telecoms Package, the Council of Ministers is writing out these amendments to suit the industry. The Council also seems to weakening the Parliament's amendments to prevent large operators hoarding spectrum - that is, obtaining the rights to spectrum, but not using it, merely hanging onto it to keep out competitors.

The Radio Spectrum Policy Programme presents an ideal opportunity to consider putting a proper audit and the allied responsibilities onto the mobile phone corporations.

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Here is an example of the Council negatively changing an amendment by the Parliament - the Parliament would like operators who hoard spectrum to lose the rights to that frequency. The Council has deleted that requirement.

Article 3 (D) Parliament

maintain and develop effective competition, in particular in electronic communication services, by preventing ex ante, or remedying ex post, excessive accumulation of radio frequencies by certain economic operators which results in significant harm to competition by means of withdrawal of frequency rights or other measures, or by assigning frequencies in ways that correct market distortions;

Article 3 (D) Council

maintain and develop effective competition, in particular in electronic communication services, by preventing seeking to avoid through ex ante, or remedying ex post, remedies, excessive accumulation of radio frequencies by certain economic operators which results in significant harm to competition;

And this amendment - promoting use of shared and unlicenced spectrum for community purposes, is one of those that the Council wants to delete

6a. Member States, in cooperation with the Commission,
shall examine the possibility of spreading the availability and
use of picocells and femtocells. They shall take full account of
the potential of those cellular base stations and of shared and
unlicensed use of spectrum to provide the basis for wireless
mesh networks, which can play a key role in bridging the
digital divide

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If you want to know more about what the Council did in the Telecoms Package, see my book

The Copyright Enforcement Enigma: Internet Politics and the 'Telecoms Package'

Please cite this article: Monica Horten ( 2011) Blood money, silent Blackberries - time to regulate mobiles? www.iptegrity.com 27 October 2011