Vested Interest v The People

Generic smartphoneLegislation is up before the US Congress to mandate kill switches in phones, notes David Manners. But the US CTIA which represents the mobile operators opposes the legislation. Could it be because the operators make around $5 billion a year insuring people against damage, loss or theft of phones?

Insuring a top flight latest model phone against damage, loss and  theft costs about £7 a month. If a stolen phone could be rendered useless remotely, then stealing mobile phones would happen less.

At the moment operators can switch off service to a lost or stolen mobile phone but that doesn’t stop the phones being shipped to another country and re-sold. The export opportunity ensures the continuing attraction of phone theft.

Only if the phone could be rendered inoperable could theft be discouraged. In the US legislation is up before the US Congress to mandate kill switches in phones.

But the US CTIA which represents the mobile operators opposes the legislation.

The reason given for the CTIA’s opposition is that hackers could get into the kill switch system and switch people’ phones off.

The real reason for the CTIA’s opposition is suspected to be that the operators make around $5 billion a year insuring people against damage, loss or theft of phones.

(BTW: The CTIA is the same group which lobbied successfully to make unlocking mobile phones a criminal offences in the USA).

Clearly, if a kill switch made phone theft unattractive to thieves, then fewer phones would get stolen and so fewer people would take out the anti-theft insurance.

Now the amount of money Americans spend replacing stolen phones is $580 million a year, says a Creighton University report.

And if consumers didn’t spend on theft protection insurance, because phone theft has become negligible, they would save another $2 billion a year on their phone insurance.

So the argument is: Is the loss of $2 billion in anti-theft insurance premiums paid to the operators more important than the $2 billion which consumers pay in insurance premiums?

(That’s assuming the insurers honour their obligation to cover the $580 million replacement charges for stolen phones).

It’s another of those American battles between vested interest and the people.

Guess who’ll win.

Tags: CTIA, David Manners, insurance, kill switch, mobile operators, mobile phones, theft protection, US congress

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