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Google's Locked Unlocked Nexus One: Future Regulator Delight, Customer Angst

Google (GOOG) has seen plenty of customer dissatisfaction from people who purchased a Nexus One, had a problem, but couldn't get any help. Now a report from Stacey Higgenbotham on GigaOM suggests that the list of issues is about to get longer, as the phone can only work on T-Mobile's network when it comes to 3G data, meaning that the people who are putting down $530 for the "unlocked" version are as tied in for higher performance as any locked-down phone from a carrier.

The issue is one of carrier frequencies. Cell phones contain radios that tie them to the cell towers. Different types of technology support a variety of radio frequencies. For GSM-type phones -- what you find at T-Mobile and AT&T (T), as opposed to Verizon's (VZ) use of CDMA -- there is a variety of different potentially supported frequencies. But for 3G data, T-Mobile uses one set of frequencies and AT&T, another. That means the Nexus One simply cannot talk to the AT&T network at higher speeds (even if AT&T does have 3G coverage and enough bandwidth wherever you find yourself). The only frequencies on which the two networks overlap is in 2G coverage, and so that's all the Nexus One can deliver.

This shows how tricky developing "open" technology can be when it comes to wireless communications. To provide a truly open device that could move from one network to another, Google would have had to support a broader range of frequencies. But that would have added to the complexity and cost of the product, meaning that even a $530 price tag might be inadequate (although the company seems to get plenty of margin to provide the extra frequency coverage).

My guess is that the vast majority of people buying unlocked Nexus One phones have no idea that the problem exists, because they're taking Google at its word (which is not necessarily something you can count on). What happens when they find that the marketing said one thing and the technology said another? I predict a class action lawsuit as well as yet more attention from the Federal Trade Commission. Image via stock.xchng user lusi, site standard license.

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