Mobile messaging cloud service provider HeyWire is levying some pretty harsh accusations against the big four US carriers, not least that they are censoring freedom of speech, limiting innovation and even violating network neutrality.
It started back in April when one day the four-and-a-half-year-old company's over-the-top business messaging service suddenly -- and without warning -- stopped working for all Verizon Wireless customers. It wasn't a glitch. It just turned out Verizon wanted to form a new, more expensive agreement with HeyWire Business, and blocking its service was how it decided to tell them.
If that sounds familiar, it's because that's the model approach that Israeli startup Shine Technologies is suggesting carriers take with mobile advertisers -- block their ads to force them to strike a business deal. But, as Meredith Flynn-Ripley, HeyWire Business CEO, explains it, this is a lot worse. (See Operators Should Block Ads to Get Their Cut, Startup Says .)
For one thing, HeyWire was already paying Verizon for use of its network. But she is less upset about the rate increase -- HeyWire is a big enough company to pay it and reinstate service -- and more upset about the precedent that she says Verizon has included in its new terms, as have AT&T Inc. (NYSE: T), T-Mobile US Inc. and Sprint Corp. (NYSE: S), all of which followed Verizon's lead and changed their terms within the past year. The carriers now say that they can block service from interconnected over-the-top (iOTT) providers, those that use real phone numbers to provide text service via an app, at any time, to any business or consumer, or even unilaterally block the service across the board.
"We're very concerned because all these new rules puts the wireless carriers in a position of censorship and authority to determine who can message with whom," Flynn-Ripley tells Light Reading. "These actions go beyond the scope of fast and slow lane of net neutrality and limit freedom of speech and are unwarranted censorship."
The operators told HeyWire they were trying to prevent spam on their networks. When we contacted them, none of the big four would directly address the issue with HeyWire, but all but Sprint provided general statements related to iOTT. A Verizon spokeswoman said the carrier has a long track record of ensuring its customers can use the messaging services they want, including those from OTT providers.
The spokeswoman told us: "In order to do so, while still protecting our customers from spam and unwanted charges, we helped develop and have always adhered to all industry guidelines and have clear policies and processes about how these services can be enabled on the our network."
AT&T stressed that the carrier supports SMS and MMS from iOTT providers, but works through an industry vendor that enables the interconnection of messaging traffic. A spokesman said, "We are not blocking SMS or MMS traffic from OTT providers who have an agreement with our vendor."
And T-Mobile said, "T-Mobile does not charge Over-the-Top (OTT) providers for these messages. T-Mobile pays our messaging interoperability gateway partners for enabling this traffic. They do not pay us."
HeyWire says the aggregators passed increased fees on to them and insists its network actually has less spam than any of the operators. The company provides text-to-1-800 number capabilities that it says a million consumers and businesses use to text each other regardless of the end device. It, and other iOTT providers like it and Twilio Inc. (NYSE: TWLO), which also says it was blocked by the operators, terminate upwards of 30 billion SMS messages annually on the major operators' networks.
The new carrier rules limit the ubiquity of SMS, says HeyWire CTO Gene Lew. Wireless operators have watched as OTT messaging services have eclipsed SMS usage in recent years. SMS ubiquity was the operators' main advantage over OTTs, but it becomes a little less attractive when those outside of fellow wireless operators are blocked from interoperating -- which, Lew and Flynn-Ripley add, costs operators nothing to support. (See $38.3M: Ain't That a Kik in the SMS and Operators Can't Kik the OTT Habit.)
"The industry is built on interoperability and the growth has happened because anyone can message anyone," Flynn-Ripley says. "These rules fly in the face of [the principle that] anyone with a phone capable of texting should be able to message anyone. They're isolating innovative companies."
The rules also potentially fly in the face of the net neutrality principles that are being worked out in the US now, requiring all Internet traffic to be treated equally. The Federal Communications Commission (FCC) could decide operators' blocking of OTT services is illegal but if not, this could simply become the new way operators do business -- stifling any communications that doesn't come from within their walled garden. (See WebRTC & the Rise of the WebCo, Obama Backs Net Neutrality, Stuns Industry and Net Neutrality Even Mark Cuban Could Love.)
— Sarah Reedy, Senior Editor, Light Reading