The mobile world holds a lot of promise for consumers, and for those brave enough to develop applications that have to work on a whole host of different devices and on the technologies of different carriers.
Mobile is a marketing platform. It’s an entertainment platform. It’s a shopping platform, an organizing platform, a donation platform. It’s anything anyone can imagine. But as a panel of entrepreneurs brought together by the Mobile Internet Content Coalition (MICC) demonstrated Friday, the mobile world can be fraught with peril for those who risk angering the fickle powers that be who run their world.
After listening to the entire session (which we hope to post next week), the wonder of it all is that so much good stuff exists given the potential pitfalls. Jeff Sass, Myxer vp of business development, talked about his wonderful music platform. Jared Reitzin, CEO of mobileStorm, showed how his company’s business-to-business technology can be used for email and texting campaigns, while Mobile Commons co-founder Jed Alpert noted that his company provides text-messaging services for a whole host of clients who can use it as an organizing tool or marketing technology. Alpert noted that five billion text messages are sent each day in the U.S., calling texting “the rope bridge for the digital divide” because the technology is so accessible.
The dangers start with the short codes, those five-digit codes that allow someone to vote for their favorite American Idol or to donate money to a charity without the need for traditional long telephone numbers. The short code world is a Byzantine one, with service providers needing to negotiate a world that includes all of the cellular carriers, a layer of service aggregators who actually work with the carriers, and industry groups dominated by the carriers.
Reitzen noted that short codes are expensive. It can cost $500 monthly for a random short code, or $1,000 monthly for a “vanity” code specially made for a product or campaign. Those rates are set by a carrier organization. There is no competition or choice. The service providers have to pay those rates during the time that carriers evaluate their proposals for using the codes, which can take as long as 12 to 15 weeks.
As a result, many small businesses are shut out of short codes unless the service providers share the code among several clients. On one hand, that’s a good thing because it cuts the cost. On the other hand, when something bad happens, it happens to everyone.
Here is the something bad. There are reviewers at each carrier for each program on which a short code is based – the marketing campaign or whatever. The panel members noted that any carrier could take down any program at any time for any reason – without warning, without appeal. Attorney Michael Hazzard from Arent Fox, who works with the coalition, likened the situation to dealing with the Sopranos. Service companies can have their short code programs taken down even for things not directly involved with the program – such as language used on the company’s web site, or language used by another company that uses a service company’s platform, but has no relation to the short code program at all. “The carriers hold all the cards,” Hazzard said, they determine what is a “shutdownable offense.” For example, Reitzen said, T-Mobile may require a service provider to say “standard rates apply” for text messaging, while Verizon may require a disclaimer that standard rates may apply.” Any diversion from the norm can result in having the short code program halted.
Sass said some carriers ban the use of the word, “ass.” His company is afraid to put up a song on their service called “Kiss My Country Ass,” because it would violate the guidelines, even though that same carrier can have the same song on their storefront, Sass said.
These conditions, of course, don’t exist on the wired Web, which is why the company entrepreneurs want the wireless Web to have the same openness principles that the Federal Communications Commission (FCC) apply to the wired Web. Without that same openness, companies can’t innovate and create jobs, Sass said.
The takedown policy is only one example. There are captive billing practices, obscure approval mechanisms and other conditions that affect the service providers’ ability to do business.
It’s time for the FCC, the Federal Trade Commission and even the Antitrust Division at the Justice Department to break open this closed little society. The FCC can grant the Public Knowledge petition to protect text messaging and short codes as common carrier services. The FTC or the DoJ could look at the cartelized pricing mechanisms and approvals. No one has to go through the same hazing maze or endure the same hazards to get a Web domain for the wired world. There is competition for domain registration in the wired world. What happens there should also happen in the wireless world.