An Argument of ‘Carterphone’ for Wireless

We all know the phone choices we have as consumers are under control of the carriers. Its not just the phone selection but the features in a phone. Would you be surprised to find out that many US phones have WIFI chips built in but disabled? All to protect the carriers revenue stream. Well read on –

That didn’t sound quite right to me and, as it turns out, it didn’t sound right to
some of the nation’s leading consumer technology columnists either. Even though we inhabit very different ecosystems, they were—quite separately—concluding that the cell phone market looks a lot worse than other parts of the personal electronics market. And, boy, were they right! When I buy a new computer, I get to choose exactly what I want: a personalized bundle of processor, hard drive, video card, display, networking device and so forth, plus whatever software I wish to load. Wherever I can get a Wi-Fi or Ethernet connection, I can reach the content I want: Business Week, the Wall Street Journal, the FCC’s homepage, or the millions of videos on YouTube. It’s a fantastic world of choice—and we need to keep it this way.

Now let’s look at the cell phone market. For the most part, we’re limited to the handful of phones that our particular carriers have selected for us. Most of those devices offer precious little choice over applications or content. And, even more amazing, though my device may be branded Nokia, Motorola, LG or whatever—it’s the carrier (not the handset manufacturer) that has the final say on its features. That is why, as Chairman Martin demonstrated at an FCC open meeting, the European version of a leading manufacturer’s popular phone comes with Wi-Fi, yet the identical model here in the U.S. comes without Wi-Fi—simply because the U.S. carrier wanted to protect its business
model. How on earth do American consumers benefit when a perfectly good feature is disabled so their carrier can protect its revenue stream?

In addition to the downsides for consumers, the carrier veto handicaps entrepreneurs (which then in turn further harms consumers). When Google’s founders had an idea about how to build a search engine, they bought some server space literally using their credit cards (this was in 1998), put their product on the Web, and you all know the rest. When a wireless entrepreneur has a great idea, he or she has to pitch it to the handful of carriers—and if they say no, it never leaves the ground. The New York Times reports that European wireless designers think our system is nuts. Maybe they’re right.

The Carterphone decision opened the wireline POTS market to third parties. Consumers were no longer locked in to buying or renting a Western Electric or Automatic Electric phone set. So Commissioner Copps asks the essential question — why not Carterphone for wireless? It IS the question. The carriers I believe are resolved that a Carterphone for wireless will happen. Verizon is preparing to open its network to foreign devices. AT&T is now preparing to issue contracts to users without a phone plan upgrade. The 700mhz auction that starts tomorrow will accelerate that trend with its requirements of ‘open systems’.

Is the FCC telegraphing a message?

The whole speech by Commissioner Copps here.