But Do We Still Need Gov't Intervention To Open Mobile Networks?

from the or-does-competition-work? dept

A month and a half ago, Walt Mossberg wrote up an article saying that government intervention was needed to get US mobile phone operators to open up their networks. I took issue with that notion, noting that it wasn't as simple as Mossberg made out, and there wasn't enough evidence that government intervention was needed or that it would help. In fact, we pointed out that competitive pressures were already pushing mobile operators, with the exception of Verizon Wireless, away from the walled garden model -- and while they hadn't adopted truly open models, it was likely to come with time and increased competition. And, in fact, as we noted last week, Verizon Wireless has responded to these competitive pressures by promising to open up (the reality of that promise remains to be seen).

With that in mind, I was a little disappointed to read Mossberg's take on Verizon Wireless' move. Mossberg cautiously commends Verizon Wireless, withholding full judgment until all the details are out -- which makes complete sense, and is a position I agree with. However, Mossberg fails to note that this (and other such moves) have all happened due to competitive pressures, rather than government fiat, and doesn't retract his call for government intervention. While it absolutely is true that the mobile operators remain too closed these days (even once Verizon Wireless details its plans), what we're seeing is how market pressures tend to drive markets toward openness in much more natural ways than by involving government intervention. The second the government got involved, lobbyists from the mobile operators would make sure that huge loopholes were slipped in that would likely make things worse for consumers, not better. Like Mossberg and many others, I'm frustrated and annoyed by the limitations put on mobile phone systems by operators, but I'm confident that pressure from within the industry and from outside of it (see the recent work of Apple and Google for a start) will eventually force the operators to open up -- and it won't take long for them to realize that the end result is better for everyone, including the operators themselves.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Hamish MacEwan (profile), Dec 3rd, 2007 @ 6:41pm

    Opening the Walled Garden

    Hi,

    Since Government fiat established the opportunity for those walled gardens, I have no problem in calling on them to tear that wall down.

    As for Verizon, I expect more doubt about incumbent's motives from TechDirt, you really believe Verizon's change of heart "all happened due to competitive pressures, rather than government fiat?"

    I think you should check out the Block C conditions that Google managed to inject into the auction and ask yourself whether Verizon isn't just "showing willing." And pretty half-hearted willing at that.

    Much better commentary at http://scrawford.net/blog/


    Hamish.

     

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  2.  
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    Richard Bennett (profile), Dec 3rd, 2007 @ 6:48pm

    Walt Mossberg is a communist

    You can't just wave a magic wand over a network that was designed to run a very limited set of applications at a pre-defined speed and make it both open and stable. If Mossberg doesn't realize this, he's either a fool or a demagogue. Verizon is opening up its new 4G network because its design lends itself to IP. Going the same route on the 1G and 2G networks is just asking for trouble.

     

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  3.  
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    dave, Dec 3rd, 2007 @ 7:33pm

    What a pointless article

    There are lots of companies that make good CDMA phones with features that people want TODAY. That are already certified by Verizon for use on their network. Realistically, the only ones who can really make a business of this already make CDMA phones, and already sell them to Verizon. Except that Verizon has screwed up each and every one of those phones by removing and/or crippling the the manufacturers had already implemented. This move by Verizon is all about APPEARING to be open, while still maintaining their current status quo.

     

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  4.  
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    Mike (profile), Dec 3rd, 2007 @ 7:41pm

    Re: Opening the Walled Garden

    Hamish,

    Let's be fair here. I have been nothing if not skeptical about Verizon's moves since the beginning -- and am just as skeptical in the post above. To say that we believed their position completely is simply false, and you know that as well as anyone else here.

    However, you have to recognize that everyone in the market is moving more towards openness, and it's NOT because of government pressure. The only reason the Block C conditions exist at all is because of Google's efforts.

    Asking the gov't to tear down the walls is premature. I am not a fan of Verizon Wireless' actions in this space at all, and have called them out repeatedly for what they've done. However, that doesn't mean that the gov't should step in. If they did, the situation would get worse, not better. Verizon's lobbyists are incredibly good. Whatever came out of DC would favor them so much you wouldn't know what hit you.

     

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  5.  
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    Mike (profile), Dec 3rd, 2007 @ 7:42pm

    Re: Walt Mossberg is a communist

    Richard, for once, could you please make a comment that didn't involve insulting someone? It would be a huge step forward in terms of progress. Mossberg is hardly a communist, and for you to even imply that shows your ignorance of Mossberg, communism and what Mossberg is asking for.

    You can't just wave a magic wand over a network that was designed to run a very limited set of applications at a pre-defined speed and make it both open and stable.

    Of course, that's not what anyone is asking for. But you knew that, right?

     

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  6.  
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    John, Dec 3rd, 2007 @ 7:58pm

    Apple pushing for openess HAH!!

    If anything apple is the biggest problem to overcome for openness. AT&T and Apple's deal is about the most closed deal out there, in fact Apple's attempts at similar deals overseas have been stopped by foreign governments. Just saying if you want to make a point you really should focus on open companies, like google.

     

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  7.  
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    Mike (profile), Dec 3rd, 2007 @ 10:51pm

    Re: Apple pushing for openess HAH!!

    If anything apple is the biggest problem to overcome for openness. AT&T and Apple's deal is about the most closed deal out there, in fact Apple's attempts at similar deals overseas have been stopped by foreign governments. Just saying if you want to make a point you really should focus on open companies, like google.

    Please do not misread what I said. I did not say that Apple was open. I said that competition from the likes of Apple was driving others to be more open in order to respond.

     

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  8.  
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    AlexC, Dec 4th, 2007 @ 11:43am

    Re: Re: Opening the Walled Garden

    The only reason the Block C conditions exist at all is because of Google's efforts.

    Yes, C Block is the way it is because Google, Frontline, Skype, a number of public interest groups, etc. pressured the FCC to make it so (or gave it cover to do so, whichever you prefer). But how is that not government action?

    But for those auction rules, Verizon would not feel any openness pressure. Google's Android is a way to disrupt the mobile OS market, not simply a way to promote openness.

    I have no problem being cynical about what comes out of DC, however, rules that promote openness (like the 700Mhz auction rules), and rules that break down walls (like number portability) have their place and push the large market players to react. Hopefully we will see some promise out of Verizon Wireless' announcement, but don't fool yourself that it was happening on its own, or solely in reaction to Google's hopes for openness.

     

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