Is the Smartphone ‘Kill Switch’ Bad for Business?

by Matt Klassen on May 5, 2014

Last week 17 California senators voted against a law that would have required mandatory anti-theft technology, the so-called kill switch, to be installed on every mobile device sold in the state, many of them citing the fact that such security technology was bad for business as their reason for opposing the law.

Smartphone theft has reached ‘epidemic’ proportions across the country, with the FCC indicating that one out of every three thefts across the nation involves a mobile device. In California those numbers increase dramatically, where in some areas the stats rise as high as 50 and even 75 percent. It’s for this reason that the CTIA committed itself to the kill switch project, but in one of enhanced security law’s first tests in California senators resisted the change.

But despite their claims that such anti-theft technology would actually have an adverse affect on business in California, its hard to find one of the senators who will elaborate on their opposition, with most simply not replying to inquiries about their vote. However, one doesn’t have to look far to find out why, as there’s big money in cellphone theft, not only for the thieves, but for the carriers as well.

Earlier this year California regulators proposed a bill that would require smartphones and tablets sold in the state to have software installed allowing users to totally disable the device if it is stolen. The bill was signed by State Senator Mark Leno (D-San Francisco), San Francisco District Attorney, George Gascon, and other regulators.

According to Consumer Reports 1.6 million Americans were victims of smartphone theft in 2012, and replacement costs for lost or stolen devices top $30 billion a year. With that number alone its not hard to see why senators would resist the kill switch law, as the loudest voices in their collective ears are not those of their frustrated constituents, but of powerful and convincing lobbyists on the payroll of concerned wireless carriers. Improved anti-theft technology means less theft, less theft means less replacement devices, and less replacement means less money.

Further, carriers are now in league with insurance companies, offering customers the choice of buying coverage plans in case a smartphone is lost or stolen. Should the state mandate that smartphones include anti-theft technology consumers would be less likely to shell out money for insurance, meaning more lost revenues for carriers and their partners.

Now there’s no question that tech companies and carriers alike are tax paying corporations who, in California particularly, are a boon to the local economy, and should over-regulation make it less profitable for those companies to operate in the state there is the risk they would seek refuge elsewhere, bringing their tax revenues with them. To that end, I do agree with one senator who voted against the law, his reason being that in order to maintain competitive balance between states that this issue needs to be regulated at a federal level.

But if carriers and tech companies are bilking additional revenue from customers who have to buy replacement phones, is that a revenue stream we need to protect? Should senators appease carriers and tech companies by resisting necessary anti-theft measures? Absolutely not. In fact, I consider carriers resistance to this bill to be almost as odious as the initial theft the bill itself is working to prevent, for with carriers pocketing money for replacement phones customers often find themselves victims of not one thief, but two.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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