In the early noughties I worked for a British mobile operator at the time they realized simboxes were being used to pump lots of traffic through radio antennas that were not designed for that traffic just because it was cheaper for another business to harness the radio connection instead of paying for sensible bits of cable to carry their traffic. The revenue assurance function was central to pointing out the problem, because nobody in the fraud team worried about lots of SIMs that other businesses were actually paying for. The mobile operator was unsure how to act, partly because it was unsure if the use of simboxes was illegal or not. Incredibly, the legality of simboxes is little better understood today than it was then, and the UK’s Supreme Court may now be required to make the ultimate decision about the legality of simboxes, almost two decades after simboxes were first used in practice.
Mobile networks were built to give coverage to mobile phones, not to static boxes filled with SIMs, so the original focus of operators was on expanding network coverage and persuading individuals to buy handsets, with an implicit promise that any gaps in coverage would be filled soon. You can only get people to try new technology if you make it cheap enough, so that meant mobile operators had to offer low call rates for the most common types of call, and give handset subsidies, and spend lots of money on erecting new antennas all over the country. My operator made the same mistake as others, by not identifying the arbitrage risk until somebody else had started taking advantage of it. Other businesses did identify this risk, though they saw it as an opportunity. They would use GSM gateways – colloquially known as simboxes – to harness the cheap local call rates and the new antennas in order to undercut the rates for more expensive calls, such as those involving an international destination.
The UK regulator, whose goal was ensuring the country had good mobile networks rather than diverting investment from network roll outs to enrich arbitragers living next to a radio mast, fudged a solution that was in the overall interests of the public. GSM gateways were radio devices that needed a license but none of them would be given a license, and suddenly all the simbox businesses had to close. However, when you close very lucrative businesses overnight then you give people with money a reason to take you to court, especially as the safety and security justifications for refusing to license simboxes were always rather ponderous, and more of an excuse to close a loophole where both the regulator and the operators wanted the cost of some calls to be subsidized by higher rates for other calls.
The litigants who lost their simbox businesses have never really gone away. They know they will get an enormous payday if they can prove in court that the safety and security justifications given for banning simboxes were bogus. If we were in Africa or Asia then nobody would be arguing any more – those regions have laws that say simboxes are illegal and dangerous and that is the end of the debate. Sometimes the enthusiasm with which governments in those regions throw people into prison for using unlicensed radio communications equipment goes too far, as poor old Aung San Suu Kyi can confirm after she was not just toppled by a military coup, but then arrested for having imported walkie talkies in her home. Contrast that with ‘advanced’ countries like the UK, where 20 years of debate has still not resolved if simboxes can be banned or not.
A lot of people are to blame for the farcical situation in the UK, just as there are always many people to blame when bureaucracies fail, even though no single bureaucrat is ever found to have done anything wrong. The UK regulator tried to make radio waves the issue when the real problem was the economics of building, and paying for, really expensive new networks. The European Union’s bureaucracy pushed national regulatory bureaucracies to have general rules for allowing communications instead of making everyone specifically ask for permission to run a communications business. This begged the question of what was the general rule that prohibited GSM gateways when the UK regulator had done its best to avoid explaining what was so unsafe about the simbox businesses. So the UK government waded in to save the regulator’s blushes, only to mess things up even more.
The government’s ill-conceived solution involved harrumphing a lot about national security. They harrumphed that it was bad to allow calls without CLIs, and dangerous to have calls that could not be traced. The government used these justifications to order the regulator not to give permission for anyone to use simboxes. But this decision was effected in such a contrived manner that the government tripped over their own legal shoelaces. The government’s own laws had given the regulator the power and the obligation to decide to license equipment like GSM gateways, without giving the government the power to order the regulator not to do its job. That was the essence of the judgment in a High Court case in 2019. The government appealed, and the Appeals Court decided in November 2020 that the government was still wrong. You can read the full Appeals Court judgment here if you are a masochist, but the short version is to say that if the government wants to ban something they can pass a law to ban it, instead of telling a regulator not to permit it for a reason that is unrelated to the kinds of regulations that regulator is responsible for.
So now we have to wait to see if the UK government will appeal to the Supreme Court, the very last court of law. At this rate, over 20 years will pass between the regulator first prohibiting simboxes and the very real prospect that the highest court will decide none of the bans were executed lawfully. If you wanted an advert for why democracies are better than dictatorships, then you would not use the UK handling of simboxes as an example.