iPhone users have long thought that Apple should buy a cellular carrier and disrupt the industry’s usurious contracts by changing the business model. But it looks like the most significant challenge to the cellular industry’s status quo may come from an unexpected source: the U.S. National Security Agency. That’s right, the NSA is getting into the cell carrier business. And you can imagine why.
Of course, the NSA isn’t being quite so blunt about it, but rumors have started circulating about a new mobile virtual network operator called ASN that promises to compete with entrenched cellular carriers by offering a contract-free plan that includes data at $10 per GB, voice calls to anywhere in the world for a flat rate of 1¢ per minute, and entirely free SMS text messaging.
A mobile virtual network operator, or MVNO, is a company that essentially leases the right to provide network services over an existing carrier’s infrastructure, purchasing bulk access at wholesale rates and then reselling them independently. There are hundreds of MVNOs worldwide; Virgin Mobile became the first MVNO in the United States before eventually being acquired by its host mobile network operator, Sprint Nextel, in 2009.
ASN will be unusual, the rumors suggest, in that it will work with multiple GSM carriers to provide significantly broader coverage than most MVNOs, particularly worldwide. Couple that coverage with compelling prices, and you can see how ASN might lure massive numbers of customers away from the traditional carriers. After all, it’s difficult to pay less than $80 per month for a smartphone plan with 1 GB of data from a major carrier. But at 1¢ per minute for voice calls, 1,000 minutes would cost only $10, and another $10 for 1 GB of data brings the total cost to only $20, a quarter of what similar service might run from AT&T or Verizon Wireless in the United States.
But what’s the link to the NSA? Newly revealed documents from the collection leaked by former NSA contractor Edward Snowden indicate that the NSA’s wiretapping program wasn’t sufficiently effective, capturing perhaps only 30 percent of voice traffic metadata, due in large part to consumers moving from landlines to mobile phones. To address this gap, an NSA program code-named REACHOUT was developed to integrate NSA data collection capabilities more closely with cellular carriers. Documents confirm that ASN — short for “American Security Now” — is the key to REACHOUT, designed as it is to attract large numbers of customers, particularly those making international calls.
ASN is intended to be a legal front for the NSA, which used its national security powers to compel cellular carriers (at least in the United States) not just to accept the NSA’s data collection gear but also to sell wholesale network services at a favorable rate. ASN’s relationships with international carriers outside of the other members of the Five Eyes (Australia, Canada, New Zealand, and the United Kingdom) will be subsidized through the NSA’s portion of the so-called “black budget.”
Although the leaked documents may have outed ASN as a front for the NSA, sources say the NSA may still continue with REACHOUT. ASN will reportedly call its plan the Patriot Plan, and give it the marketing tagline, “Because you have nothing to hide.” Since — according to a 2013 Pew Research poll — 56 percent of Americans say the NSA’s tracking of telephone records is an acceptable way for the government to investigate terrorism, ASN may find plenty of takers for the Patriot Plan among those who are willing to trade some privacy for significantly reduced cell phone bills. Are you among them?