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The upcoming 700 MHz Follies Beg a Public Discussion on Mobile Voice and Data (and Spectrum)

In practice, many innovative devices never reach the market. The Big Four tend to approve only established partners whose devices fit their business plans, which is why we have yet to see all those wireless devices that were supposed to be in our future.

The firms already control what phones or devices reach Americans; 95% of cell phones are sold by the wireless carriers themselves. They strictly control phone design, blocking features that might threaten their revenue, like timers that keep track of how many minutes you've used each month. The carriers have also crippled or blocked alternative means of connecting wirelessly, like Bluetooth and Wi-Fi, because they want you to burn up minutes on their networks and charge extra fees. Forbes Column on Wireless Innovation

Tim Wu, Professor at Columbia Law School and author, wrote this column for Forbes magazine's May 18 edition. In this essay, as he highlights the upcoming debate over future use of the 700 MHz spectrum and introduces the issue of the "right to attach," he talks about the four major cellular phone companies. Those companies collectively control which applications use their networks and which devices can attach. Clearly, based on a historical review, their decisions are first in the best interests of their own companies and their shareholders, and only a distant second are they in the interest of their customers. If you have any experience with cellular phone companies, you probably have some understanding of what he's talkng about.

He highlights the innovation that unfolded from the Carterfone decision by the FCC in 1968, which allowed the Carterfone and other devices to be connected directly to the AT&T network, as long as they did not cause damage to the system. This decision led ultimately to a standard telephone jack and the introduction of new devices like fax machines and modems, which in time led to the Internet. See, this stuff is all connected when you dig deep enough. Check out this short history of the telephone industry and regulation to see how much telecommunications history drives what we see unfolding today. It's just all happens so sloooooooowly.

In fact, another column talks about a Cellular Carterfone policy, whereby cell carriers should be required to make neutral the decision on which applications and devices attach to their networks. Make it standard, sit back, open the floodgates, and watch the innovation start to happen.

Don't buy into the "dissatisfied customer" storyline? Check out Six Things Customers Hate about Cellphone Service. 1) Disabled features; 2) Phones "locked" to work on only one network. 3) "Walled garden" Internet access. 4) Unreliable service. 5) Incompatible products and services. 6) Cell phones generally can't be used as laptop modems even though it's technically feasible. Put me down for 2, 3, and 4, in particular. I'm switching carriers again this month (2 years finally up!!) and my Sprint-only Treo 650 won't be worth much. How long can this situation hold out? Maybe change is coming sooner than we think?

Yet the iPhone is poised to break through one technical barrier imposed by carriers on most phones--it will be capable of switching from cell mode to Wi-Fi when it detects a network hotspot. Wi-Fi - despite its wide availability and appeal - is impossible to access from most cell phones because carriers have been slow to support any wireless technology that competes with their own. For example, when Nokia released the E61 smartphone in Europe last year, Wi-Fi support came built in. But when Cingular introduced the same phone in the United States last fall, Wi-Fi support was missing.

Voice over IP is another network service cell carriers have been slow to support but IT departments want. Ben Holder, CIO of Unifi, a yarn manufacturer, says his company's BlackBerry users would benefit "a lot" from both Wi-Fi and VoIP if only they could get it. "Business users are now behaving more like consumers," Holder says. "They want more of the same features and functions as consumers."

My favorite part about all of this debate and potential change is to see dual use cellular phones finally break in - imagine your cellphone working like a land-line VOIP phone when you're under a Wi Fi cloud. How many calls do you make from your hometown? How many minutes could you drop from your cell plan if you could leverage the cloud? It's coming, folks.

There are more news items and blogs out there starting to discuss the upcoming 700 MHz decision-making process, which we'll have to cover in the next blog. I'm running out of steam tonight.

Posted on May 31, 2007 at 09:55 PM

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