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AT&T, Verizon and GSMA Face eSIM Collusion Investigation

By Ernest Worthman, AWT Exec. Editor, IEEE Sr. Member

May 2, 2018

Really? And we thought these players were honest, and above board.

Remember when, whatever phone you had was chain-locked to your service provider? Didn’t like them? Too bad. If you wanted to change you had to get a new phone.

Then came SIMs. That still kept you tethered to the service provider, but at least you could upgrade phones. Next came “generic” SIMs in various form factors. As long as you were using the same modulation scheme, aka GSM or CDMA, and the phone accommodated the form factor, you could swap out service providers and/or phones.

That was a breakthrough. It put a whole new spin on the game and forced service providers to become competitive.

The service providers have been fighting this, tooth-and-nail, forever. There are no limits to what they will do, to prevent you from changing providers, if left to their own devices. Fortunately, the regulators have been fairly successful at creating a competitive market.

Still, the smartphone market is relatively incestuous. Providers and phone OEMs are, forever, trying to come up with creative ways to make switching providers challenging. An entanglement of deals are created to keep phones tuned to their networks and, and iron-clad contracts are inked with users that, in exchange for a free phone, keep them from switching.

Now there is a new sheriff in town, embedded SIMS (eSIMs). eSIMs are chips integrated with the silicon fabric itself. They are programmable, and end the SIM-switching dance by offering a plethora of new capabilities. While not all that different from removable SIMS, in function, they are supposed to make phones much more agile and flexible.  Once enabled, the end user is able to select multiple mobile networks without physically changing the SIM card. This is accomplished by something called “remote provisioning” (versus pre-provisioning as is the case with SIMs). There are no fixed profiles hard-coded into the eSIM.

Embedding SIM technology does not change the provider game. Providers can still have phone manufacturers program the devices to their networks. However, if the user wants to change providers, it can be done with a simple phone call and over-the-air (OTA) reprogramming.

Seems like an end user’s dream – finally. If you do not like you provider anymore, just call up a new provider and have them reprogram the eSIM. Not so fast, while it works in theory, behind closed doors these same service providers were scheming and conspiring around all kinds of ways to keep the new eSIM from freeing the user. In fact, so much so that the Department of Justice (DoJ) has opened an antitrust investigation to look into whether the three amigos, AT&T, Verizon and the GSMA, have been conspiring to make life difficult for users wanting to switch competitors on the eSIM platform. They are suspected of coordinated attacks on consumers to prevent them flexing their switch muscles.

The DoJ is pretty hot on this because it goes right up against open competition. And they suspect collusion among them.

Immediately, Verizon and AT&T are brushing off any concerns. The GSMA has released a canned statement to the effect of, “This standard contains a wide range of features, including the option for the eSIM to be locked. In the United States, consumers would have this option; however, they would need to explicitly consent to this under specific commercial agreements with their mobile operator, for example when purchasing a subsidized device. The development of the latest version of the specification is on hold pending the completion of an investigation by the United States Department of Justice. The GSMA is cooperating fully with the Department of Justice in this matter.”

One would think, that after years and years, and penalty after penalty, for any number of transgressions, the providers would stop being so nefarious and let the user choose based upon the usual metrics, service area, coverage, customer service, features and the like. But no, the con game continues. It is becoming embarrassing. Kudos to the DoJ.

Why this is so significant is because eSIMs will be a fundamental building block of 5G and the Internet of Anything/Everything (IoX). OTA programming will be the most prominent methodology for keeping next-generation devices and networks secure and updated. It is a crucial component of these platforms. OTA offers the ability to update eSIMs, which can perform functions such as dynamic reconfiguration around multiple bands and sub-bands of spectra, and organize networks on a more granular basis for example. This allows for network optimizations, dynamic frequency allocation, and much more. There is no doubt as to the eSIM’s value in future platforms.

It is fine for providers to make deals. Locking eSIMs is a permissible part of the game. But it needs to be done with full disclosure and the user should understand, fully, all the options. That is the level playing field going forward.

Ernest Worthman
Executive Editor/Applied Wireless Technology
His 20-plus years of editorial experience includes being the Editorial Director of Wireless Design and Development and Fiber Optic Technology, the Editor of RF Design, the Technical Editor of Communications Magazine, Cellular Business, Global Communications and a Contributing Technical Editor to Mobile Radio Technology, Satellite Communications, as well as computer-related periodicals such as Windows NT. His technical writing practice client list includes RF Industries, GLOBALFOUNDRIES, Agilent Technologies, Advanced Linear Devices, Ceitec, SA, and others. Before becoming exclusive to publishing, he was a computer consultant and regularly taught courses and seminars in applications software, hardware technology, operating systems, and electronics. Ernest’s client list has included Lucent Technologies, Jones Intercable, Qwest, City and County of Denver, TCI, Sandia National Labs, Goldman Sachs, and other businesses.  His credentials include a BS, Electronic Engineering Technology; A.A.S, Electronic Digital Technology. He has held a Colorado Post-Secondary/Adult teaching credential, member of IBM’s Software Developers Assistance Program and Independent Vendor League, a Microsoft Solutions Provider Partner, and a life member of the IEEE. He has been certified as an IBM Certified OS2 consultant and trainer; WordPerfect Corporation Developer/Consultant and Lotus Development Corporation Developer/Consultant. He was also a first-class FCC technician in the early days of radio. Ernest Worthman may be contacted at: [email protected]

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