The BlackBerry ban threats started with the UAE and Saudi Arabia, and then expanded to Kuwait, India, and Lebanon. Then countries outside the middle east joined in. Indonesia and even Germany wanted access too. Then the European Commission, which employs around 32,000 people, chose the iPhone and HTC devices as their official handsets, leaving BlackBerry out altogether.

Why all the fuss? RIM has created technology so secure that even governments that have been practicing communications monitoring for decades can’t break it. The governments’ response was to ask RIM for the “key,” or suffer the consequences. Banning BlackBerry data services would severely damage RIM’s business, especially in population-dense India.

The governments’ desire to monitor communications may seem extreme and Big Brother-like, but it’s not aimed at people sending love notes or messages about what to have for dinner, or e-mails between friends. The concern is about the ability to monitor potential and confirmed terrorist communications.

It’s understandable. But where does it end?

Because RIM doesn’t actually use any kind of data encryption key, it’s not a simple matter of handing over a code that allows monitoring. In addition, many of the foreign governments expressed concern about not having any jurisdiction over RIM communications information because the company’s servers are located in the United States and Canada, where the company is headquartered.

The solution, it now seems, is to put servers in the other countries. A spokesman for India’s Ministry of Home Affairs released a statement that said, in part, “It was also decided that the Department of Telecommunications would study the feasibility of all such services being provided through a server located only in India.” The agreement made with Saudi Arabia to avoid a ban there reportedly also included server placement.

If RIM does this for India, it stands to reason the other countries would want the same thing. And if a few countries get their own BlackBerry servers, won’t even more countries make their own requests for the same? If Germany has one, won’t Italy, Spain, France, and England want their own too?

And it’s not a simple matter of setting up a server somewhere and leaving it alone. It will require space, and employees to monitor its functioning. That means setting up a RIM office in every country that gets a server. Just how much is this going to cost RIM? And what is it going to do to their stock?

But I’m jumping way ahead there. Right now, there’s only talk of putting servers in Saudi Arabia and India to appease the governments and avert bans in those countries. And the solutions presented by RIM have only averted a ban for the next 60 days while the Indian government reviews the company’s proposal and decides what to do. We’ll just have to wait and see what happens.

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It’s not the first time the GAO has had something to say about the wireless industry, but their most recent concern was actually that the FCC wasn’t doing enough to protect consumers from the questionable practices of the wireless industry. Their criticism was two-pronged, saying that the FCC wasn’t doing enough to enforce consumer protection rules, or to educate consumers about available recourse when they encounter issues with their carriers.

But now the GAO is turning its spotlight on the industry itself. The office released a report last week (you can read a summary here) that says wireless costs have decreased over the last decade, even as the number of wireless subscribers has grown exponentially, increasing from about 3.5 million in 1999, to 285 million by the end of 2009.

The CTIA, a group that represents the wireless industry, took the report as good news. The group’s CEO, Steve Largent released a statement which said, in part:

“In finding that wireless consumers are seeing ‘lower prices and better coverage,’ today’s GAO report confirms what we’ve been saying for a long time—that the U.S. wireless industry is extremely competitive and continues to respond to increasing consumer demand by delivering real benefits for American consumers.”

But, the report didn’t say the wireless industry is competitive. In fact, it calls the industry “concentrated” because mobile phone users have fewer carriers to choose from today than they did ten years ago. According to the report, the four major carriers—Verizon, AT&T, Sprint, and T-Mobile—control approximately 90 percent of the wireless market, and make it difficult for smaller, regional companies to compete.

So what happens now? Well, now it’s up to the FCC to use the data in the GAO’s report to investigate further, and possibly take action. What kind of action? That remains to be seen, but it will be quite a while before any real change comes about.

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The music industry has come after the wireless carriers before. First, the American Society of Composers, Authors and Publishers (ASCAP) sued AT&T and Verizon last year, saying that song ringtones amounted to public performances every time a phone using one rang. ASCAP wanted not just future royalties, but retroactive royalties, too, amounting to hundreds of millions of dollars. Thankfully, a judge saw common sense and ruled in favor of the wireless carriers.

But the music industry wasn’t swayed. A few months later, Broadcast Music, Inc., (BMI) sued T-Mobile for “improperly licensing” ringback tones. Ringback tones are what callers hear through their handset when they place a call. Some carriers, like T-Mobile, allow customers to choose custom ringback tones. BMI wants a piece of that action. That case is still pending.

Now, along comes NAB. They’re not in quite the same area of business as ASCAP and BMI, but they’re like a very close cousin. After all, it’s content produced by artists affiliated with ASCAP and BMI that is broadcast over radio stations affiliated with NAB, and the NAB pays musicians and their managers to use that content. So the music industry has an interest in seeing FM tuners placed in mobile phones.

Oh, but that’s not why the NAB wants Congress to mandate that FM tuners be installed in cell phones. Oh, no. They say it’s a matter of safety and security. You know, if there’s some sort of natural disaster or other dangerous situation, mobile phones can suddenly spring to life and broadcast warnings via their fancy shmancy FM tuners, much like the emergency notices that pop up on televisions when there’s a tornado in the area, or some other emergency situation.

The thing is, in order for a mobile phone to receive an FM signal, it doesn’t just need a tuner, it needs an antenna. (I can hear the groans over at Apple right now.) Interestingly, many mobile phones already do have FM tuners installed in them. They’re just not activated, and obviously, cell phones don’t have radio antennas on them.

While the NAB is talking a lot of big talk about going to Congress with this national safety issue, they don’t have any solutions for the antenna problem. In fact, when asked about it, NAB executive vice president Dennis Wharton said that was something for MIT engineers to figure out, not the NAB.

Wow, really? I’m pretty sure MIT engineers are busy with other things like, oh, I don’t know, figuring out how to get all that oil out of the Gulf of Mexico and the surrounding shoreline, not coming up with ways to outfit mobile phones with radio antennas so the music industry can continue to turn a profit.

Besides, there are already small, handheld devices that have both FM tuners and antennas. You may have heard of them. They’re called radios.

Image courtesy Zatz Not Funny!

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Bank of America’s testing is only taking place in New York City for the time being. If all goes well, they’ll expand to other areas. But for now, customers can test out the smartphone payment system at Walgreens, Home Depot, McDonald’s, and in taxis. Other companies that are set up to accept mobile payments include CVS, Burger King, and BP, if anyone is even buying gas from them anymore.

In order to use the service, smartphones must have a microSD card that is payment-capable installed. The technology for that has been developed by Visa and a company in Texas called DeviceFidelity. Their system allows smartphones, including the iPhone, to store multiple card accounts, doing away with the need to carry several cards in your wallet.

It makes sense that Visa would be involved in this program. Right now, Visa and MasterCard pretty much dominate point of sale credit card capabilities. But in order for merchants to accept those cards, they must pay Visa and MasterCard fees. Those fees have gone up quite a bit over the years, and continue to rise, in many cases to the point where merchants decide not to accept cards anymore because they simply can’t afford the convenience.

If the joint venture that the wireless carriers are involved in takes off, it could conceivably take a lot of business—and a lot of money—away from Visa and MasterCard. If their fees are lower, and if the companies can prove that their system is secure and reliable, merchants will most likely be quite willing to switch to save themselves from having to pay so much to accept credit cards.

But if that’s going to happen, and they’re going to compete at all, they need to step things up. While Verizon is investing in CardStar, people in New York area already paying making smartphone payments. If the Bank of America program begins to expand before the wireless companies even get their testing off the ground, they may miss their entry into smartphone payments altogether.

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CardStar is not any kind of payment replacement app. Instead, it allows you to consolidate all your store loyalty cards into one app, again reducing the number of cards you need to carry in your wallet. Grocery stores, pet supply stores, even electronics and office supply stores all have loyalty cards that offer discounts and other specials on occasion to keep people coming back. Between credit cards, debit cards, and loyalty cards, your wallet can get pretty crowded. CardStar lets you enter all your loyalty cards’ numbers in one place, and then simply use the app at checkout.

There are actually several apps available that do this. Where CardStar sets itself apart is by allowing merchants to offer promotions through the app. The app also gives merchants several ways to use the app, which is especially important for those that don’t have the ability to scan bar codes at the register. More than 2,000 merchants have already signed on with CardStar, and the app has more than 700,000 registered users.

In addition, CardStar recently announced an integration of its service with Foursquare. By selecting favorite merchants, Foursquare will automatically check you in whenever a purchase is made and identified via CardStar.

It’s not clear yet what Verizon hopes to gain from its investment, although it may be able to integrate its own payment system once it’s up and running. For now, CardStar is available for the iPhone as well as Android and BlackBerry devices.

Image courtesy CardStar

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Sure, any phone with video capabilities can be used by a deaf or hearing impaired person, but the occasional lag can hamper communication. People who use sign language every day sign as quickly as most of us speak. If the video can’t keep up, much of the meaning can be lost. In addition, people who communicate via sign language also use facial expressions to emphasize what they’re saying. Facial expressions convey important visual cues, regardless of whether a person is speaking or signing.

Researchers conducting the university study have formed a MobileASL team. One of the team’s goals has been to increase image quality, not only around the hands that are signing, but around the faces of those communicating. This is especially important because deaf and hearing impaired people must rely completely on video and cannot depend on verbal cues like laughter.

To increase image quality, the MobileASL team has optimized compressed video signals, bringing the data rate down to about 30 kilobytes per second. In addition, the phone has motion detection built in to “see” whether someone is signing or not. If no motion is detected, the phone automatically shuts itself off, thereby extending battery life.

It’s true that those with hearing impairment can also rely on e-mail and texting, but they’re not always convenient or desirable. Texting is good for short messages like “Pick me up at noon.” E-mail is fine, but it can be a little impersonal. Being able to sign over a video phone allows them to have a true conversation, and derive enjoyment from actually seeing the person they’re talking to.

Part of this study is also meant to find ways to make this improved video communication affordable. The phone’s battery will have to pack quite a punch to accommodate heavy video usage, and the higher resolution video and screen will necessitate more expensive components.

It’s important to note that this improved communication for deaf and hearing impaired people is just coming about as wireless carriers begin to do away with their unlimited data plans in favor of data caps and tiered pricing. To rely on video communication the way hearing people rely on voice communication will require a lot of data usage. Hopefully, all wireless carriers will make accommodations for this increased usage when the sign language phone is perfected and produced for the general public.

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According to a report from Wired, Verizon Android customers use 25 percent more data than AT&T’s iPhone customers. In addition, a study by Rhythm New Media showed that Android users stream more video over 3G networks than iPhone users do.

What does this mean? Well, for one thing, it means we can probably expect the other three carriers to follow AT&T’s example and begin capping data pretty soon. The major wireless companies all usually follow each other in policy changes and new offerings anyway. It’s part of remaining competitive. In this case, though, by continuing to offer their unlimited data plans, Verizon, Sprint, and T-Mobile maintained a bit of an edge over AT&T. Unless a potential customer is really adamant about getting an iPhone, why wouldn’t they opt for unlimited data over capped, right?

AT&T’s data caps went into effect on June 7, 2010. Those who were already AT&T customers with unlimited data at that time were able to keep their unlimited plans if they wanted to, or they could switch to limited and maybe save a little money.

I would imagine the other carriers will do the same. The more people start using smartphones, and the more data they consume. And with the net neutrality debate heating up again, now may be the time to lock in an unlimited plan if you don’t have one already, before you’re left without the choice.

Image courtesy Rhythm New Media

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The Wall Street Journal is reporting that an Indian source provided the media outlet with access to minutes taken during several meetings held between RIM representatives and Indian officials. The Journal says one summary of a discussion about e-mail indicated that “after some persuasion, the [RIM] representative agreed that they can provide the metadata of the message,” which would include an e-mail’s sender, recipient, and time stamp.

RIM issued a statement last Thursday saying that while it is willing to help carriers adhere to national security rules, it will not alter its e-mail servers’ security architecture in response to any foreign governments’ demands. The statement went on to say that “RIM maintains a consistent global standard for lawful access requirements that does not include special deals for specific countries.”

Part of the problem foreign governments in India, as well as the United Arab Emirates (UAE), Saudi Arabia, Kuwait, Lebanon, Indonesia, and most recently Germany, have with not being able to access RIM’s secure network is they believe they are being denied access that other governments and countries have been given. Presumably, they are referring to the United States and Canada, where RIM is headquartered.

The U.S. government has expressed support for RIM, albeit cautiously, while the Canadian government has remained silent on the issue.

With news of the deal RIM is making with India surfacing, it stands to reason other governments will want the same kind of access. But what if other countries want more access? Where will it end? How far will RIM have to go to keep their BlackBerry data services from being banned around the world?

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So far, AT&T is the only carrier to have done away with unlimited data plans for new customers, opting for limits and tiered pricing. The other three major carriers, including T-Mobile, are still, at least for now, offering unlimited data plans to their customers. However, one T-Mobile customer, Trent Alvarez, found out that T-Mobile will limit data usage under certain circumstances.

Alvarez claims he received a message from T-Mobile when his data usage exceeded 10GB in one month. The message informed him that his data speeds would now be capped at 50Kbps or less. Alvarez says he contacted the carrier and tried to have the cap removed, but T-Mobile refused, so Alvarez then filed a class-action suit claiming T-Mobile’s ads for unlimited data were misleading, and that the sales representative he dealt with gave him false information.

Yes, anything that says it’s unlimited should be unlimited. However, in the fine print of Alvarez’s—and probably all T-Mobile customers—it clearly states that the carrier reserves the right to throttle data speeds based on excessive or improper usage, or on network overload. Similar information is included on T-Mobile’s brochures, again in very fine print.

So really, it’s a question of proper disclosure. Did T-Mobile inform its customer that their data usage, even on unlimited plans, might be throttled? Yes, they did. Is it the customer’s responsibility to read their contract in full? Yes, it is. Would it be helpful if information were printed in a font size that people could actually read? Absolutely.

Another question is did one person using 10GB of data in one month really put that much of a strain on T-Mobile’s network? One person? Sure, there are probably several other T-Mobile customers using a lot of data as well. Were they all capped? What was the true and measurable effect on the network, and T-Mobile’s ability to service all its customers? T-Mobile is probably going to have to show how Alvarez misused the network, or caused a negative effect in order to justify their throttling measure.

The specifics of this case are very similar to the ones related to what the FCC is calling “bill shock,” where wireless customers unexpectedly receive huge bills for certain types of usage. Although the usage parameters are spelled out in the contracts, again, it’s done in very fine print, and usually covers multiple pages of the contract.

The FCC is investigating the major carriers for this practice, and some of them, like AT&T, have begun sending their customers warnings via text message when they approach their data limits. But how do you warn a customer on an unlimited plan that they’re approaching a mark that may bring about a limitation? I imagine that, like most of these class-action suits, this one will be settled out of court, and many of these questions may never be adequately answered. We’ll have to wait and see.

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The United Arab Emirates (UAE) is planning to ban BlackBerry data services beginning October 11 if the government cannot reach an agreement with RIM. Saudi Arabia had planned to put such a ban in place last Friday, but RIM was able to negotiate a compromise with that country’s government. Other countries that have stated the possibility of instituting such a ban include Indonesia, Lebanon, Kuwait, and now Germany.

The German government is urging employees not to use BlackBerry devices. The European Commission took it a step further and chose the iPhone and HTC devices rather than go with BlackBerry for its employees. Although the Commission employs approximately 32,000 people, only about 2,500 were affected by this official sanction. It’s still quite a blow for RIM, though.

All this talk of banning BlackBerry devices stems from the fact that RIM’s encryption is so good, the countries’ governments can’t break it. In other words, they can’t monitor communications of those who use BlackBerry devices, whether it’s government employees or suspected terrorists.

RIM has said it will do what it can to accommodate the governments’ concerns, but that it is impossible to simply hand over an encryption key because at no time does any RIM employee have access to it. The system was built that way specifically to provide privacy to users.

In building such a secure system, RIM created a double-edged sword. Yes, users of its devices can enjoy privacy and be secure in the knowledge that their communications or Web browsing habits are not privvy to prying eyes. Such a secure network is also beneficial to organizations that rely heavily on security, including the United States government. It’s common knowledge that President Obama uses a BlackBerry. That any individual, business, foreign government, or terrorist organization might ever be able to access the President’s private communications is unthinkable.

At the same time, just as government employees may depend on RIM’s encryption, so can those terrorist organizations that want to avoid monitoring by any government agencies. The worst-case scenario is that any such group could effectively plan and carry out another terrorist act like the 9/11 hijackings by coordinating and communicating with their BlackBerry phones. Unless the U.S. government, or any government is able to monitor such communications, a terror strike could be executed with little or no impediment.

When addressing the issue during a news conference last week, U.S. Secretary of State Hillary Clinton spoke very carefully to show support for certain freedoms and for free enterprise, while at the same time acknowledging security concerns. So far, there has been no comment on the issue from the government in Canada where RIM is based. This is both surprising, and a little disheartening.

RIM employs nearly 14,000 people. If more countries jump on the banning bandwagon, and if it begins to affect RIM’s revenue, it could have a tremendous effect on its employees, and thereby the economy in Waterloo, where the company is headquartered.

This isn’t the first time Internet privacy has been an issue, and it certainly isn’t the last. But it may be the first time it’s had such a direct effect on such a large company, and on the physical space rather than just online.

Photo courtesy Reuters

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