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Folks, this is something you are probably ignoring but you damn well better stop that because it's costing you hundreds of dollars a year -- right here, right now -- for many consumers, and this problem will only get worse.

A number of years ago the FCC went after mobile providers for refusing to provide unlocking codes to their handsets.  See, cell companies locked handsets as a way to stop you from absconding on your bill -- which included a "time payment" on the phone itself.  While they could put you into collections plenty of people ignored that and it wasn't worth suing someone over a couple hundred bucks.

That practice was defensible if you owned money on the phone, but not once it was paid off.  Therefore the FCC required cell companies to make unlocking codes available if you paid for the handset in full, no matter when that was.  This meant you did not lose either choice or the ability to change carriers without turning your expensive phone into a pile of slag -- assuming the radio was compatible with your new provider.

The carriers appear to not like this, so they've "responded" in ways that clearly subvert the intent of the unlocking ruling.

They've started refusing to allow devices they did not sell to use all the services you paid for on your account.

T-Mobile, in the past, has done this with certain handsets with regard to Band 12 (their "enhanced range" LTE) service and VoLTE (voice-over LTE.)  The reason this is important is that T-Mobile has provisioned Band 12 in a number of places where there is no other service on their network at all.  A handset that cannot do VoLTE thus has a problem, in that the FCC requires that you be able to make a 911 call without any service plan at all or even without a SIM installed.  If your phone is locked on to a Band12 tower where there is no other service on that provider, it has a SIM in it (so it stays connected to that provider) and yet the phone cannot do VoLTE you would be unable to call 911.

The correct solution to this problem is for the "baseband" (radio) code to detect that (1) you're calling 911, (2) you're on a band where no voice service is available given the technology choices in the handset and subscription (MCC/MNC) you're authenticated against and (3) lock that band out for the duration of the 911 call.  This would cause your phone to "roam" (if there was some other service) for the 911 call, and all would be well.  But instead of insisting on that sort of behavior T-Mobile instead demanded that the makers shut off Band 12 entirely, and in some other cases where VoLTE was possible in the handset they refused to allow connections to Band 12 even though it did work, if the handset wasn't bought by them.

That's evil in that it effectively forces you to buy a handset on T-Mobile's "approved" list if you want to know that it will work and if you don't it makes your phone worthless in huge swaths of the country (like, for example, the entire northern half of Michigan!)  What's worse is that T-Mobile is charging handset makers to "certify" their phones to operate on what is an international standard -- VoLTE service.  Since handsets already have to go through FCC testing to be sold in the United States this is nothing other than a "pay to play" scheme and implicates US anti-trust law as an attempted tying arrangement.

Verizon, by the way, tried this too with the Motorola "Play" phones; they originally refused to activate them at all despite their compatibility with Verizon's service.  Then, suddenly, their policy changed.  I wonder if they got a "polite" phone call from someone?

AT&T, for its part, is still doing this with handsets they don't sell.  They intentionally block hotspot and visual Voicemail access on those devices, even though the device is running a common Android version that certainly supports the functions.  They also block all IMS and VoLTE service on handsets they do not sell, but at present this doesn't prevent service from working because AT&T today has fallback service (HSPA or GSM) available in those areas.  What it does do, however, is prevent "HD Voice" (enhanced quality) from working where both ends of the call are on AT&T and both handsets are in a VoLTE area.  AT&T has confirmed that this is the case and the IMS/VoLTE blocking will start impacting customers with non-AT&T handsets beginning early next year as they have also publicly stated they are going to start shutting down their old EDGE/GSM service towers; if you wind up in an LTE-only area with them and have a handset they won't "allow" VoLTE to work on you're going to get nothing.

Why is all of this a problem?  Because it's illegal.

From the Clayton Act:

It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce.

In other words you cannot fix a price (disadvantage a customer and force them to pay more) because they wish to use a product a competitor sells (instead of one you sell) where the effect of same is to substantially lessen competition.

By definition when a company makes a mark-up on a tied product the consumer, if they buy a competing product without involving said seller, would tend to pay a lower price and thus as a general rule that sort of policy substantially lessens competition.

Certainly one cannot demand that those products that are incompatible on a technical level be supported.  That's not the issue.  The issue is intentional interference with consumer choice by disadvantaging one product over another because the service provider, in this case the phone carrier, did not sell the product and thus did not earn a margin on same.

When there were only two carriers for cell service (way back when in AMPS days) locking was pervasive and impossible to get around.  You threw away phones when you changed carrier, and there were only two choices ("wireline" and "non-wireline".)  Then PCS showed up, along with CDMA and similar, and technical incompatibility made only some changes in provider possible without throwing away your hardware.  The explosion of new bandwidth that has occurred over the last couple of years and will continue into the indefinite future, along with everyone transitioning to LTE and carriers shutting down legacy service exactly as occurred years ago with AMPS means that unless this practice is stomped on now you are going to wind up back where you were in AMPS days -- where you must buy the device from the carrier, you effectively abandon that investment if you change carriers and you're getting screwed by as much as 40% or more on the price.

Where we should end up within the next couple of years in the US is an open, free market for handsets that can be used on any United States cell provider.  This will cause prices to drop like a stone exactly as they have in other parts of the world; you will be able to buy "high-branded" devices for $800, near-equally spec'd devices for $500, and inexpensive ones for a $100-200.  All will work equally across all providers and thus you will be able to choose who your service is from without having to throw away anything.  Convergence toward LTE, in short, will mean the "special" hardware (and thus increased cost) for compatibility with Verizon and Sprint will disappear.

But nobody is going to build wide-band, unlocked handsets that will operate on all of the domestic bands and carriers unless they can sell them and people can use them.  Right here, right now, today there are multiple vendors with that sort of "wideband" coverage but they are all going to disappear if they become effectively useless on one or more carriers due to intentional interference.

That screwing on price is not speculative -- it is happening right here, right now.  There are unlocked, multi-carrier-capable handsets available from multiple firms including BlackBerry, ZTE, One, HTC, Blu and others that are anywhere from 40-60% less expensive than similarly-spec'd devices sold by the carriers and carrier policies in blocking features intentionally on devices they do not sell are an attempt to force you to overpay by half again for your phone.

It's time to put handcuffs on these carrier executives folks, and if you care about this, and you should, then raise hell with your elected representatives and, should you so choose, file an FCC complaint.

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Total nonfarm payroll employment rose by 161,000 in October, and the unemployment rate was little changed at 4.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in health care, professional and business services, and financial activities.

There's not much here that looks interesting at first blush; it's a "muddle along" number.

For an October this number is tepid on the unadjusted numbers.  Usually October is fairly strong as it begins the hiring for the "season" of this holiday we have every year, but I don't see evidence of that in this figure. 

But...... there's no real deterioration here, in the data that really matters; employment:population is steady, and still on the "slowly improving" trend.  The key word here: slowly.

This many years and with this much "extraordinary" policy, however, we shouldn't be here.  The evidence is that this "extraordinary" policy is harmful rather than helpful, and what's worse is that it has enabled terrible decisions that are radically uneconomic but help a very tiny number of people at everyone else's expense.

That's economically dangerous because such acts usually blow up in your face later.  When business basically gets dragged into this sort of thing because "everyone's doing it" and you follow along lest "your" company get left behind by the analysts and other Wall Street mooks you're setting up for a crash when the rug gets pulled out from under you as the impact isn't just yours, it's everyone's.

Internals showed that hours were stable at 34.4 and hourly earnings ticked up.  There's a problem brewing here in the labor market but nobody's paying attention to it, and it's coming in cost-push inflation.  Of course we'll hear that 'nobody could have seen that coming' a year or two from now..... when it finally has to be addressed, and it will.

The participation rate internals are continuing something I've been seeing for a while; men are neither losing or gaining, but women are on the modest plus side.  Sexism?  Maybe, but the trend is not strong.

Where it is a strong trend is in the "education" area.  This has been going on for a while, and it's bad news.  If you're a high school dropout, you're fooked.  But if you have a college degree you're not gaining much, while those who are simply high school graduates are, on-balance, gaining more in the employment area.  This is very, very bad news as it speaks to two problems I've often noted over the last few years: Quality of the jobs available and the "value" (or rather, lack thereof) that you received in exchange for that $50,000+ in student loan debt.  This trend continues, as it has now for several years, in that what you really get in exchange for taking on college debt, outside of a handful of professions, is bent over the table.

Here it comes.

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2016-10-31 06:00 by Karl Denninger
in Technology , 290 references

Give me a break.

A task force of more than 30 major technology and communication companies said they have made progress but have not found a solution to eliminate "robocalls" or automated, prerecorded phone calls, but a top U.S. regulator urged faster action.

Throw some people in prison and you'll get their attention.  Yes, right here in the US, and yes, I'm talking about carrier executives.  Why?  We'll get to that:

Wheeler wrote major companies in July urging them to take new action to block robocalls, saying it was the top source of consumer complaints at the FCC. Scam artists often times based abroad try to appear to call from a bank or a government phone to trick consumers into disclosing confidential financial or account information.

How do they "appear" to call from a bank or government phone when they're not in the United States?

Ah, now see, there's the fraud and the US carriers are complicit in it.

Along with a call setup request (from one carrier to another) comes some information, which includes the "originating" number.  The carriers do exactly nothing to validate that for other than 800 (free to calling party) numbers.

But they could very trivially prevent, for example, foreign calls from appearing with US numbers.

How?  Refuse to route a call that comes from the UK unless the "originating" number is in the correct format including the country code prefixfor example.

That would stop instantly any of these calls that are originating outside of the United States.

As for those within the United States the FCC has jurisdiction, and can require that one of two things be the case:

1. The "originating" number be the actual originating number.  This will be the appropriate setting for all individual lines; simply do not allow an overridden number from a consumer account -- period.

2. For those that are overridden require, under penalty of law, that the party overriding accept both civil and criminal legal responsibility for the authenticity of their override under existing criminal fraud statutes.

There are very good reasons to allow such an override on outbound calls.  For example, at MCSNet we had outbound trunks that were all "rolled up" into high-capacity circuits (at the time DS1s); each of those trunks had a "real" phone number, but it was unpublished.  We then had DID mapping for certain people who needed "private lines" and in addition we had our "main" number (312) - 803-MCS1 that would ring into the PBX on the next available trunk in the group.  If you dialed out from our PBX those trunks (set up for bidirectional signalling) were configured to show 312-803-MCS1 as the "originating" number even though technically it was not.  That's fine, because we owned the originating number, it was "real", and it really was our number.

It would not be difficult at all to require that all such entities that purchase service from a telco provider in the United States and wish to provide "originating number" overrides do so under a contractual requirement, carrying criminal criminal penalties for lying, that any such number they put through be truthful and belong to the actual originating party of the call.

If you were to do this and at the same time hold carriers criminally responsible for accepting "foreign" calls that have originating numbers that violate the country code format of the originating nation, a software check they could easily implement, this problem would disappear instantly.

Of course there are "telco providers" (such as the SIP folks) that would scream about such a requirement -- but let's face reality here.  Enabling fraud as a business model makes you an accessory before the fact and recognizing that along with appropriate criminal sanction would go a long way to draining this swamp -- quickly and permanently.

Instead we "accept" a bunch of handwaving nonsense that comes from the FCC and various telcos.

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2016-10-15 05:00 by Karl Denninger
in Editorial , 3103 references
[Comments enabled]  

Go back and read this Ticker, and the link in it on the actual budget deficit we ran last year (no, it's not the nice number you see at the top of the MTS.)

The budget deficit was in fact $1.4 trillion -- not the claimed $587 billion (which is bad enough, incidentally.)

Last year the Federal Government spent $1,417 billion dollars out of $3,854 billion, or 37% of every dollar it spent, on Medicare and Medicaid.  This was a 9.3% increase over last year's expenditure of $1,296,731 (million), all-in.

But inside this figure are even-more damning numbers.

Payments to the health care trust funds were up 13.4% (!)

Spending on CHIP, the plan for poor kids, rose last year by an astounding 56%.  While the total spent was only $14.3 billion that rate of rise is utterly astronomical by anyone's measure.

Don't believe for a second that administrative expenses are under control, which is a claim often made for Medicare and Medicaid: They were up 32% last year for the primary hospital insurance trust fund.  No, that's not a misprint.

Hospital benefit payments for Medicare?  Up 8.4% -- the bright spot, believe it or not.

Medicare Part "D" (drugs)?  Sit down: Up 26.2% to a total of $95.2 billion.

Folks, at this rate of change within the next four years Medicare and Medicaid will consume just over $2,000 billion a year, or $2 trillion -- an increase of $600 billion a year in spending.  

Let me remind you that last year taxes (receipts) rose by a paltry 0.55%, and at this rate of increase over the next four years government revenue will absorb only $72.9 billion of that $600 billion in additional spending -- and this assumes that absolutely nothing else in the budget increases in cost at the same time, an utterly fanciful notion.

In other words there will be at least another $500 billion of additional annual deficit, and likely far more than the $600 billion denoted here, bringing the total to more than $2 trillion in actual deficit being run per year.

If this pattern were to continue for 10 years then Medicare and Medicaid would rise to $3,448 billion, or for all intents and purposes all of the $3,854 billion the government spends now!  Worse, increased tax revenue would absorb only $184 billion of that additional cost -- for all intents and purposes ZERO.

For those politicians and others who claim Social Security is going to blow at roughly the same time, no it won't.  Social Security payments (for retirees and disability) rose 3.2% last year while for both retiree and disability tax receipts rose at a 5.2% rate.  Yes, on a cash basis Social Security ran a deficit last year but the rate of increased tax revenue was higher than the rate of spending growth and Social Security has a $2.8 trillion dollar Treasury security cache it can redeem to cover the shortfall.  At present rates Social Security may have issues in the future, but for right now it is stable.


We will not manage to get through the next 10 years at this rate and in fact will not get through the next President's term.  If we do not put a stop to this right now the stock market will collapse and lose up to 90% of its value, all pensions will collapse and at best be able to pay 50% of what was promised (are you a teacher, firefighter or police officer?  Bend over because law or no law you are screwed.)  The bond market will collapse as the spiral of debt will be clear to everyone and nobody will be willing to buy a bond from anyone at any reasonable interest rate, which will instantly destroy the value of all outstanding long-term Treasury debt by as much as 50-70%, government entitlements will collapse (to put that in plain language they will go to zero or effectively so) and real estate values will collapse as demanded interest rates on mortgages will make the 1980s look like a Girl Scout Party.

And by the way it is not possible to tax our way out of this and certainly we cannot do so by "taxing the rich", as is often claimed.  If you confiscated all of the money made by those who make more than $500,000 a year you would not even close the deficit gap for one year.  Of course if you did that the amount of money those who make over $500,000 a year would choose to make next year, and thus be subject to said tax, would be no more than $499,999, and thus you'd get zero in tax from them via this approach in year #2.  Anyone running a "pay your fair share" claim is lying and they know it; again, that's the math.

We must -- and can -- stop this crap with existing law.  Specifically, by applying 15 USC Chapter 1 to all parts of the health care industry.  This will collapse the cost of care for both the government and private parties by as much as 80% and permanently end and reverse the budget problems it is causing -- for the federal government, for state and local pensions, and for private firms and individuals.

I have been writing and speaking on this since I ran MCSNet in the 1990s.  It has been a focus of this column since it was formed in 2007, including in this column written in 2012.  We have willfully and intentionally, as a nation, ignored this issue for the last decade and we are now facing the destruction of our economy, our markets, our government, our society and our way of life if we do not put a stop to the pillaging of our economy and people NOW.

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You didn't see this in the debate as it failed to garner enough votes.

Oh, and by the way, despite Trump's tape not having any votes (it was too late to be included) it got what was darn close to first billing.  So much for democracy and the people's voice, which the commission claimed was going to be responsible for the order of questions and which questions got included at all.

You see, according to the media and Hillary Clinton the most-important thing to talk about is whether someone made lewd comments 10 years in the past.  We cannot, of course, have the first question in the debate be about a 12 year old******victim that was sewed up after being violated, and yet Hillary Clinton, in defending the rapist, filed a motion in court alleging that she liked older menhad filed false allegations of sexual assault in the past and was taken to fantasies.  I've read that motion (it's available at the above link) and it was filed without presenting any objective evidence for those assertions in Hillary's bid to argue for a psych evaluation of the victim -- despite knowing that the original report of the******came about as a result of a call from the hospital where the victim was sewn up after being physically injured from being violated (to an extent sufficient to preclude her from ever being able to have children!) and the presence of forensic evidence linking her client to the offense (which she managed to argue had been compromised.)

But leaving both sides of the "ethics when it comes to women" aside -- a topic that, if given full exposure, I believe Hillary would lose badly -- there is the fact that the media utterly refuses to talk about the issues that are actually before this nation and this goes all the way back to 2008 and the financial crisis!

In point of fact I believe a clean case can be made that my question is the top issue when it comes to both the economy and health care in this election, simply on the arithmetic.

As I pointed out in my post on the budget deficit we ran a $1.4 trillion dollar deficit last fiscal year.  In a few days I will have the MTS and be able to break it down, but I already know what it's going to show me -- continued outrageous acceleration in spending on both Medicare and Medicaid, putting the lie to any claim that the spending acceleration is all about "people getting older."

No, it's not, and no, whether a candidate made lewd comments (even if there were lots of them) is immaterial to the inevitable outcome if we do not address this issue in the here and now.

The most-important issue in this campaign and in fact in our nation today is people getting screwed blind by the medical industry.  It will shortly, if not stopped, become not just about the millions of Americans who are bankrupted by this outrage but will expand to include the destruction of our government's funding model, the economy, the markets, and our way of life that will happen, with mathematical certainty, in the next few years -- almost certainly during the next President's first term.

There is exactly one way to stop it, and that is to start prosecuting and thus break up all of the price-fixing and monopoly practice in said industry, which will cause medical costs to fall through the floor -- a reduction of as much as 80% or even more.

If we do not do this, and do it today, the rest literally does not matter.  We cannot sustain $1.4 trillion deficits in a time of alleged economic expansion for long.  The markets will not allow it and the screwing you take as an individual in your cost of living will not bear it.

We either stop this, here and now, or we lose our nation.


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