FCC Chairman's Open-Access Plan
An upcoming sale of a chunk of the wireless spectrum -- the kind of thing that ordinarily excites few people besides venture capitalists and telecom lawyers -- just might upend the wireless-phone business.
This is a bigger sale than most. It will dispose of the spectrum now used by many analog TV channels, which broadcasters will give back to the government as part of the transition from analog to digital TV. (Remember, analog TV broadcasts will end on Feb. 17, 2009, which is why you shouldn't buy a TV without a digital tuner.)
This spectrum is valuable because, like television, it can only travel so far and through so many obstacles. Selling it off should earn the Feds a tidy chunk of change, but the big deal here is about the conditions that might be attached to the sale.
This time around, Federal Communications Commission chairman Kevin Martin is advocating "open access" requirements that would oblige the winning bidders to offer wireless service without controlling the hardware or software their customers would use.
How would this new business model work? In a phone interview late Thursday afternoon, Martin explained his ideas.
"If you're a consumer, you could walk into a store run by the network provider," he said. "You could bring that phone and say I want to purchase a service contract."
This is exactly how wireless service works in Europe, where people can choose between buying their phone from their wireless service (usually at a lower cost subsidized through subscription fees) or getting the phone of their choice elsewhere.
So instead of customers of Acme Wireless being limited to buying phones or wireless cards certified or made by Acme, they could buy any device compatible with Acme's network, even if it included features that Acme didn't like or think necessary. You would no longer be stuck buying cameraphones that, for instance, wouldn't offer any easy way to transfer photos to a computer.
Ending carriers' control over hardware -- what the FCC did almost 40 years ago in the "Carterphone" decision that allowed Bell System customers to use any compatible device with their landline phone line -- has been on the wish lists of many wireless users (myself included).
Existing services from AT&T, Sprint, T-Mobile, Verizon and others would not be affected by a new open-access plan. Martin, however, feels that their customers would still benefit from open access rules elsewhere in the wireless spectrum; the incumbent carriers would have to respond to the greater choice available with other services. He suggested the incumbents might even benefit directly by getting some free product testing -- they could see how new hardware or software worked in the field before offering it themselves.
Most of the incumbent wireless carriers have been less than thrilled about this proposition. But the largest among them, AT&T, now says it can live with Martin's definition of open access. This is an amazing thing to hear from the company that's profiting so handsomely by having a lock on U.S. sales of the iPhone.
Other companies with deep pockets strongly favor this idea. Google, for example, says it will commit at least $4.6 billion to this auction if it's carried out under these open-access provisions. Google, however, also wants winning bidders to be required to resell their bandwidth on a wholesale basis to other firms, which not all open-access proponents support.)
None of this, however, means you'd be able to use hardware that would compromise anybody's network. "I certainly think that the people who are investing in the networks need to be able to manage their networks," Martin said. He also poured some cold water on Google's open-resale requirement: "This issue we're talking about of separating devices from the network is very different from the kind of wholesale obligations that some people are talking about."
It's been interesting to see Martin's position develop on this--it fits into the things I've heard him say on the subject of hardware choice in TV devices. The chairman concurred: "There's a lot of benefit in being able to have innovation by having a more open and standardized platform," he said. "We're trying to create a similar environment" for wireless service.
After so many years of wireless service provided in only one way, I think it's about time we tried something new. But in this case, we'd actually be going back to the earliest rules for cellphone service: Back in the early 1980s, the FCC said customers should be able to buy phones and use them with any service they wanted:
the Commission found that a single technology -- analog -- should be mandated to accomplish two goals: 1) to enable subscribers of one cellular system to be able to use their existing terminal equipment (i.e. mobile handset) in a cellular market in a different part of the country (roaming); and 2) to facilitate competition by eliminating the need for cellular consumers to acquire different handset equipment in order to switch between the two competing carriers within the consumers' home market.
Let's give that principle a shot again. Even the incumbents might find that their life is easier if they no longer have to spend so much time tinkering with other companies' phone hardware. Just how long do they want to take a stance that boils down to "You can't possibly let us focus on just the one job we're good at, running a wireless network! How dare you make us leave the hardware to the people who know it best?"
How important is open access to you? Would you be willing to pay extra for the ability to use the hardware and software of your choice on a wireless network? Let me know in the comments!
By Rob Pegoraro |
July 23, 2007; 12:19 PM ET
| Category:
Telecom
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Posted by: minniwanca | July 23, 2007 1:04 PM
Consumers in most other countries already have this kind of freedom.
So the question is - does the United States wish to remain stuck with second-rate wireless?
Posted by: Arthur Frain | July 23, 2007 1:48 PM
For me, not important at all. I don't have a TV or a cell phone. People forget that people like me exist in their own country.
I love not having to worry about all this, and have a lot more free time because I'm not chained to these devices.
Posted by: Josef | July 23, 2007 1:59 PM
RE: does the United States wish to remain stuck with second-rate wireless?
I speak for all the tech-savvy consumers when I say: NO!
I dearly hope the FCC goes with the open-access model for the 700MHz spectrum; and hopefully the idea is applied across other spectrums as well.
DEATH TO CRIPPLEWARE.
Posted by: James | July 23, 2007 2:01 PM
Josef, why would someone read an entire article about government's regulation of the wireless spectrum and then feel obliged to announce they do not own a tv or a cell phone?
And by not owning these things do you really think it free's up your time? Would going without a vehicle also free up your time? I guess if you consider the best way to spend time is staying at home talking to no one doing nothing then great.
Posted by: John Acorn | July 23, 2007 2:07 PM
I would say that 2 wireless companies already do support open access, sort of. With both AT&T and T-mobile, as long as you buy a phone that has the correct frequencies (850 and 900 for each respectively) then you can put your SIM card into that phone and it will work. I currently own a Nokia phone that I bought online that's not available in the US, but since it's quad band (with 850) I can use it on AT&T's network. The current problem is that very few phone manufacturers are willing to sell phones to consumers directly. (I believe Nokia is the only phone maker that will just sell a phone to a US customer) Hopefully the iphone has shown makers that there is a us market for high end phones, and maybe we'll start to see them showing up here in the states.
Posted by: Adam W | July 23, 2007 2:26 PM
Europeans have access to less devices, pay more for their service, most often do not have their phones subsidized, and have much more market concentration than in the United States. The cost per minute of service in the US is 1/3 the cost per minute of the next cheapest country in Europe. Further, a simple web search identifies hundreds of handset choices in the US. Tell me one wireless technology that is available in the Europe that is not available in the US. Be careful what you wish for, you just might get it -- higher prices, less innovation, and more concentration.
Posted by: Chris | July 23, 2007 2:33 PM
I wholeheartedly agree with John Acorn's post. Dear Josef, yes we realize that there are people like you in our country. We just don't care to hear your opinion when the question Rob asked doesn't concern you.
Posted by: Brian | July 23, 2007 3:14 PM
Great,let me buy a phone without a operators manual 90 pages long,and 144 gizmo features I could care less about and never will use in my lifetime.
Everyone is not interested in spending all their useful life yaking on a phone,reading their oh so important E-Mail,sending text,etc,etc, and running out every three months to buy the latest yuppie techno toy
How about a simple phone for those of us who have not fallen victim to the "I love me" expensive market pitch?
Posted by: Jerome J Markiewicz | July 23, 2007 4:13 PM
Europe isn't the model we should be looking at: Japan and Korea should be. Mobil service in these two countries is a full generation ahead of service here in the US, and offers features a full generation beyond features found on US phones.
Posted by: Jason | July 23, 2007 5:19 PM
Jerome: Essentially you are the target market for what's been reported to be Google's interest in the cell phone market. They want to make a cheap phone that comes with software that also makes it easier to browse the web by phone-- which is probably their interest in the FCC requiring open networks. Essentially, they want to make wireless access like internet access-- so that you can buy a phone that does what you want and runs the features you want without having to buy hardware dictated by the provider, essentially. Their first foray into this is their gmail mobil app.
Posted by: Jason | July 23, 2007 5:30 PM
A lot of phone geeks don't realize that the concept of open access is a lot easier said than done.
Our US mobile phone operators utilize different technology choices. Say Verizon gets the spectrum and is forced to keep it open? If they build an open CDMA EVDO network, theoretically any CDMA device capable of 700 MHz could run off of it, but no device sold by AT&T or T-Mobile would. So of course it'll be open, but only to devices built with CDMA radios. Or vice versa.
I seriously doubt most phone manufacturers would want to make all their new devices capable of all wireless technologies and I'm certain the owner of the airspace doesn't want to support all of them.
I'm convinced Google does not want to buy any spectrum. It's just a bluff to the industry. They don't want to build, maintain, and expand a network. They don't want to have to invest in large US call centers in order to provide care for thousands or millions of customers. They don't want to provide patch updates to all devices on their network in order to support multiple devices. They just want to resell their data applications to anyone/everyone and don't want to be limited by the telco. An open access platform supports their Business Plan without telco interference.
If Google really wanted to buy air spectrum, they wouldn't lobby so hard for the FCC to mandate the owner to create an open network. We all know they have the money to bid competitively with the telcos and can create/impose any kind of rules on the spectrum they win fairly.
Posted by: Anonymous | July 23, 2007 9:34 PM
Josef,
You remind me of this guy:
http://www.theonion.com/content/node/28694
You might want to look him up if you're ever in Chapel Hill, NC. He has lots of free time, too.
Posted by: Ludd Ite | July 24, 2007 10:30 AM
I think that in a discussion of technology, a discussion about the self-imposed voluntary limits that we place on technology is also in order. Since technology is the topic of this blog, it seems relevant to me.
Furthermore, as all these changes require people to buy new equipment, figure out the changes, etc., it seems a good time to consider whether the technologies designed to save us time and make life easier are really doing so. Isn't that sort of analysis in order whenever you are considering a type of technology? So it isn't all or nothing, as John Acorn seems to suggest (that if a cell phone saves me time, maybe I shouldn't drive either). But each technology should be considered on its own merits and not simply accepted because it's cool, new, or even (egad) easier! Perhaps its benefits don't outweigh its drawbacks. This sort of analysis seems all too rarely attempted by those of us (myself included) who use and like technology.
I like Rob's review of the iPhone where he praised its one-touch ringer-off feature. We need more technology that enables itself to be self-limited like that. I think a phone that had an "emergency mode" that would play a message to the caller "I'm busy right now, but if it's life and death, press 1 and my phone will vibrate." This sort of thing would help and maybe it exists already. All I know is that people's cell phones are always going off in the middle of meetings and events where they should have turned off their phones but forgot to, and it's distracting and annoying.
As for John Acorn's imagining of my life: "I guess if you consider the best way to spend time is staying at home talking to no one doing nothing then great." This ironically sounds exactly like someone who is sitting at home watching TV, no matter which spectrum the government figures you should use for that.
Posted by: Josef | July 24, 2007 4:52 PM
The comments to this entry are closed.
I'm curious. Did Martin say anything in the interview about Skype's proposal to do exactly the same thing, except to have the FCC's decision apply to all wireless devices? Google's proposal would only apply to devices running over the 700 MHz spectrum band.