Wireless Net Neutrality Heats Up...Or Dies

Since Skype petioned the FCC in February, 2007 for a wireless version of the Carterfone decision to order the wireless carriers to allow their customers to escape the "walled garden" and use the handset and applications of their choice, more than 4,000 comments have been filed, and the carriers have taken some voluntary steps towards openness.  Verizon announced their Any Apps, Any Device option in November, although details have been slow to emerge. AT&T followed up with a similar announcement, although since their network uses GSM it has always been open to any phone that would accept a SIM card.  And of course the FCC auctioned off some 700 MHz spectrum under rules requiring open access.

Last week Skype submitted a strongly worded letter complaining that the carriers were backsliding, citing speeches at the recent CTIA Wireless I.T. and Entertainment show such as by Sprint Nextel CEO Dan Hesse, who said "The big Internet can be daunting...There can be too much choice" and T-Mobile U.S. Chairman Robert Dobson's "Unfettered access would be a pretty bad experiment. There needs to be some stewardship or control."

The Skype letter includes a Reuters report which describes the mood of the meeting:

"Let's take a poll of the audience," said Lowell McAdam, the chief executive and president of Verizon Wireless. "Would any of you like to put any device and any application on any network?"

McAdam was caught off guard as the audience erupted into cheers, applause and a significant number raised their hands.

"I think we have to be careful to not all run to one side of the ship," he said, and then painted a picture of a "Wild West" frontier with unbridled open access.

Meantime, the conservative think tank, the Phoenix Center for Advanced Legal & Economic Public Policy Studies, issued a policy bulletin which purported to show how decoupling handset purchases from long-term contracts would probably raise handset prices more than it would reduce monthly service bills.  I think their model makes too many simplifying assumptions which just happen to support their point of view, but they do make a case that part of the handset subsidy comes from the carriers belief that by restricting the user's choice of handsets they can sell more expensive services, e.g. by keeping VoIP off the handset they can sell higher-priced voice services.  The issue the report does not address is the long term benefit of innovative products and services which might result from greater freedom to interconnect devices and applications.

One is reminded that the FCC's 1968 Carterfone decision set in motion the events which led to the growth of today's telecommunication industry.  One doubts that Verizon, T-Mobile, or Sprint would rather that had not happened.  Sort of like the way the movie industry must be glad that they did not succeed killing the VCR and DVD.

Note: You won't find the relevant documents on the FCC site by searching for "Skype" or even the Docket Number, RM-11361.  Instead, you need to go to the Search for Filed Comments - ECFS page and under Proceeding, enter RM-11361.

Comments

[Kevin Russell]

Great post Christopher. The days of the incumbents lording their lockin over the social and network dynamics of mobile users is soon coming to an end. I'm always reminded when reading such posts, of some of the fundamental US rights of citizens (and in service to them, required over our airwaves) 'in the public trust'. The hypocrisy of the incumbent wireless telcos and the regulatory political policies which support their anachronistic view continues to parody their contradictory rhetoric of 'free markets', 'innovation', and 'less government regulation'.