There is talk of police and industry leaders wanting to put a so-called “kill switch” into the software of your phone, ostensibly to reduce the market for stolen phones. Samsung phones will have the feature beginning on July 1. I see this being used for all sorts of unannounced purposes. The most obvious of these is easily demonstrated by the market for college textbooks.
For decades, colleges and their textbook publishers have relied on the sale of textbooks to increase profits. The college goes with a certain publisher and gets a slice of the proceeds. At the same time, students reduced costs by buying and selling used books. The small scale of these sales was not a real problem for the publisher’s bottom line. Until online giants like eBay and Amazon came along. Schools tried all sorts of methods like changing the book every year by adding chapters, but that didn’t work well. Then schools and publishers found the secret to shutting off used book sales: Make the homework part of a digital, online packet, and then force used book buyers to purchase an access code. This access code often accounts for 2/3 of the original book cost, and shuts down used book sales.
The same will be true of cell phones, now. Cell phone companies already enter into contracts with phone makers, where the phone maker sells a particular phone model to the public for a greatly inflated price, say $500, and then sells that same phone to the cell company for much less, and the company then uses that lower price to trap a consumer into a multi-year contract that carries very high early termination fees.
Once the contract is over, the original owner of the phone sells it to places like Gazelle, or sells the used phone on their own. Users that want decent phones without being locked into contracts purchase the used phones for much less than the inflated prices charged by the phone maker. This causes the service provider and the manufacturer to lose money.
Now picture that a phone company activates the “kill switch” as soon as the original owner’s contract expires and they upgrade to a new model. Good bye to the secondary phone market. You could try to jailbreak the phone to remove the kill switch, but that would be a felony.
Korea gets it. Last year, that nation fined cell phone carriers and manufacturers for inflating prices, offering complicated discounts, and using the resultant confusing price structure to deceive consumers into coughing up more money. In contrast, the US government is in the pocket of big business and throws people in jail for daring to alter a product that they purchased.
There are other uses: Cops shutting down phones during protests, riots, emergencies, or any other time they feel like it. Didn’t pay your traffic ticket? Your child support? Are you a TEA party member? An election organizer for the wrong candidate? You may find that your phone shuts down when it is most needed.
