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When wireless carriers sneeze, mobile marketing catches a cold

Verizon Wireless’ blocking and reactivation of 4Info’s flagship short code and AT&T’s unhappiness about data consumption from a tiny slice of its customer base are cause for a chill in mobile marketing.

For those following the saga, Verizon Wireless on Dec. 4 blocked SMS search and alert service 4Info’s 44636 short code to the carrier’s subscriber base. While both parties danced around the exact reasons for the blocking, access was restored in less than a week after Verizon Wireless made a public example of 4Info.

Similarly, AT&T boss Ralph de la Vega took his issues public last week, whining about how just 3 percent of the carrier’s customers account for 40 percent of its data traffic (see story).

It’s a fine way to say the nation’s leading telecoms giant can’t handle data traffic on its network without patchy access in some parts of the country – New York and San Francisco, in particular.

Be careful of what you wish for. AT&T sought Apple’s iPhone and now it’s bitten off more than it can chew.

Pinched, pulled and stretched
Let’s tackle AT&T’s dilemma first.

To suggest that those 3 percent of AT&T mobile customers should be “advised” or penalized for their data usage when they clearly signed up to an unlimited data plan and smartphone intended for that level of consumption is ridiculous. It is not their fault that AT&T’s network is not prepared to handle the load.

As they say, a bad carpenter blames his tools.

AT&T must take responsibility for providing seamless network capacity for customers who have clearly raised their hands in favor of heavy data usage, as well as moderate users who shouldn’t punished for the “sins” of a few. Why else have unlimited data plans?

Carriers such as AT&T have had ample time to invest in network capacity to expect exactly this issue: the crush of traffic caused by consumption of content on Web-enabled, SMS-friendly smartphones.

And with more smartphones launching weekly in the market, these carriers can only expect more content requests and downloads at all hours of day.

Let it be said: consumers are surely and steadily moving their Internet consumption to mobile devices, in addition to texting even more. There is no escaping this fact – bar a change in data-plan pricing, limits on data consumption or a curb on the number of new smartphones launching.

AT&T obviously used this complaint against heavy users as a weather vane to see which way the wind is blowing. It seems clear that the carrier may change its pricing strategy – an easier alternative than fixing its network, but more damaging to long-term loyalty of customers.

All those defensive television ads about maps – what sense do those commercials make when AT&T’s chief is urging a customer sub-segment to ease up on data usage?

Perhaps this argument is grounds for opposing Net Neutrality – the equal treatment of all Web traffic. The government should not fall for this line. Net Neutrality is a must for the Internet’s continued growth – and this nation’s technology lead – both on wired and wireless devices.

Teething and seething
It will be interesting to see if Verizon Wireless will take advantage of this AT&T admission and crow about its network access – which, admittedly, it has every right to do because of fewer dropped calls and denied content requests.

Now while Verizon Wireless is respected by its subscriber base, it does instill fear in vendors who work with the carrier. And for good reason: the carrier is zealously protective of its subscriber base, especially with commercial messages targeted to the 87 million Verizon Wireless customers.

Verizon Wireless recently took a hard look at its premium SMS operations across the board, examining everything from transparency in advertising to double opt-in standards.

Speaking to Mobile Marketer last week, Verizon Wireless spokesman Jeffrey Nelson claimed that the carrier received 600.000 complaints in a single month about the billing of premium SMS services (see story).

“My teeth almost fell out when I heard this,” Mr. Nelson told Mobile Marketer’s Dan Butcher. “The majority of those were calls to our customer service representatives wondering about charges on their bill, specifically issues with premium SMS services.”

Mr. Nelson said consumers were getting stuff that they didn’t understand, forcing carriers and content providers such as premium SMS companies to figure out a way to avoid subscriber backlash and punitive regulatory measures and fines.

“It’s polluting the waters here, and we want [subscribers] to value premium SMS services, not be afraid of them,” Mr. Nelson said. “So this is a bigger issue than one company’s operations.”

In our reporting last week of the flap with San Mateo, CA-based 4Info, Verizon Wireless’ Mr. Nelson made clear the reasons for blocking the 44636 short code.

“This is something we don’t take lightly,” Mr. Nelson said at the time. “This is a last resort.

“This is not an arbitrary decision,” he said. “This all based on MMA guidelines. There are a number of things that they didn’t do, issues of advertising and double opt-ins.”

Mr. Nelson said these “outstanding issues” between Verizon Wireless and 4Info “were not getting addressed.”

Cofounder/CEO Zaw Thet defended his company’s practices when talking to Mobile Marketer last week.

“We are strong advocates for consumer choice, so it’s disappointing that Verizon customers were suddenly not allowed on Friday [Dec. 4] to access our free ad-supported search and alert services on 44636,” Mr. Thet said.

“This situation is also preventing Verizon customers from accessing great publisher content provided through the 44636 short code, such as the NBA, USA Today and the Green Bay Packers,” he said.

Several opted-in Verizon Wireless customers also missed their 4Info-supplied sports score alerts during the Dec. 5-6 weekend.

“4Info believes that we complied with all Verizon requests regarding our SMS advertising on 44636 in a timely manner,” Mr. Thet said.

“However, on Friday, Verizon unilaterally elected to block the 4Info-branded 44636 service and partner content,” he said.

Better reception
Well, a week is a long time in mobile marketing. Now, all is well, and 4Info is back in the good graces of Verizon Wireless (see story).

“We were hoping that this could be resolved very quickly, and they got their business practices up to snuff, so we are continuing to work with them,” Mr. Nelson told Mobile Marketer in a report published Friday, Dec. 11. “The consumer protection side of this is really important to get right.”

There is a reason to recount this episode with some blow-by-blow action.

Mobile marketing is about to reach a critical-mass stage next year – more smartphones, more mobile marketers, more Web content, more SMS messages, better data plans – when any mistake from carrier, vendor or advertiser will be amplified and excoriated in public.

The consequences of breaching best practice and carrier rules could be as unpleasant, or even worse, if lawmakers get into the picture looking for low-hanging fruit in an election year.

It is absolutely imperative for SMS marketers to follow basic rules of text marketing: add “Reply STOP to opt-out” in every message, make it easier for subscribers to opt out and avoid stray messages or irrelevant ads. Consumers won’t tolerate disrespect, and nor will carriers who need little excuse to go cold on a hot marketing medium.