Walt Mossberg Pushing For Gov't Intervention In The Mobile Phone Market

from the is-it-really-necessary? dept

Walt Mossberg has been talking about this for a while, but his latest column follows a few other recent calls for the government to step in and mandate more open wireless networks. The idea is that mobile networks should be more like the wider internet. That is, when you buy a computer, you don't buy one locked to a particular ISP, or with only what that ISP wants you to access included. That openness has resulted in tremendous innovation in the PC, internet and software worlds -- and it's quite likely that a similar openness would lead to much more innovation in the mobile space as well. The problem, though, is that it's really not that simple.

As we've discussed before there are a lot of complicating factors here, and perhaps the biggest issue is that it's unclear that government regulation is really necessary. Early on, all the mobile operators tried to focus on completely walled gardens, not allowing users to access the wider internet. However, most operators have realized that was a mistake and have pulled away from that model (and benefited for it). There will be a greater and greater realization that this actually makes the most sense for mobile operators anyway, and there's no reason to think that it should require immediate government assistance. We're already seeing companies like Google pressure the market to be more open and certainly there's plenty of consumer demand there. That means this is really more of an opportunity for mobile operators to embrace this kind of model than one that requires gov't intervention. In the immediate future, there are technical limitations, but if you follow the direction that next generation wireless networks are taking, it should become less and less of an issue over time. On the flip side, if we do bring the government in to mandate openness, you risk a situation where a bunch of politicians without an understanding of either the technologies or the trends are pressured to make laws that will eventually have a detrimental effect (and, don't kid yourselves, the telco lobby will make sure those laws favor the telcos in the long run). Since I agree with Mossberg and many others that there could be much more innovation by embracing openness, I would like to see it happen. But I'm optimistic enough to recognize that market pressures should help drive us there without risky gov't intervention. The real breakthrough will be when one of the mobile operators steps forward and embraces these concepts on its own.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    ChristianByrnes, Oct 22nd, 2007 @ 9:24pm

    the impact of no government intervention

    Your entry fails to discuss the major impact of the lack of gov't intervention to date. The US is now more than a decade behind the rest of the world, and falling behind faster very year. Walt refers to the US as a laughingstock - that minimizes the issue. We are losing long term competitive advantage to other countries world wide. Open, free market principles are great in a true free market. But as soon as one government distorts the system any government that fails to compensate falls behind.

    reply to this | link to this | view in thread ]

  2. identicon
    thepi, Oct 22nd, 2007 @ 10:00pm

    Can you say.....libertarian?
    Libertarians=good, why have idiots make laws about things they don't know anything about with the greedy people giving them money for an advantage?

    reply to this | link to this | view in thread ]

  3. icon
    Mike (profile), Oct 22nd, 2007 @ 10:19pm

    Re: the impact of no government intervention

    The US is now more than a decade behind the rest of the world, and falling behind faster very year.

    Based on what? The US had real 3G before most of the rest of the world. The US got rid of content walled gardens before most of the rest of the world. Many new devices, including the iPhone launched in the US first. In the meantime, Europe has struggled to implement or get people to adopt 3G.

    How is that we're falling behind the rest of the world?

    reply to this | link to this | view in thread ]

  4. identicon
    Kward, Oct 22nd, 2007 @ 10:47pm

    The branch of government that should step in.

    If it wasn't for the judicial branch of the government we probably would still be paying $6.00 per hour for long distance service in 1980's dollars, we probably would still be using landlines for all of our calls and the internet would still be a dream for most. When you let ignorant politicians and the FCC dictate what should be then you don't get squat. Since the breakup of AT&T the market did open up for communications. Politicians gave us the Universal service fund (i.e. Al Gore), 911 fees, and a myriad of other fees that have nothing to do with making a call. The Supreme Court gave us choices that politicians have been trying to take away ever since.

    In America, innovation has to be forced on the government and the public. The Wright brothers enjoyed greater recognition in Europe than at home for their success for years because they were not funded and directed by the government. The Judicial branch of the government has the power to force change for the good.

    The way to more open Wireless networks is through one Judge that thinks access to communication and information are a necessity in the current world.

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, Oct 22nd, 2007 @ 11:22pm

    Then let's get rid of it

    If govt regulation is really not needed in the wireless market, then let's get rid of it! I'd be all for that. No more spectrum monopolies! But instead we have a situation where the govt is granting monopoly protection to the use of spectrum but then not overseeing it's fair use. You should either have wireless regulation or not. Not just partial regulation to the benefit of a few large corporations.

    reply to this | link to this | view in thread ]

  6. identicon
    dave, Oct 23rd, 2007 @ 12:28am

    Hello Maroon!

    Google "pressured" the industry into being more open BY LOBBYING THE GOV'T TO ADD OPENNESS AS A REQUIREMENT FOR BIDDING ON NEW BANDWIDTH. By definition, that is gov't intervention in the marketplace. The problem with not having gov't intervention is that the US winds up falling further and further behind the rest of the world, which already have much more gov't involvement in forcing carriers to behave in a more reasonable fashion, both in opening access for non-carrier supplied devices AND in having more reasonable fees.

    reply to this | link to this | view in thread ]

  7. identicon
    David Beck, Oct 23rd, 2007 @ 2:10am

    Re: Re: the impact of no government intervention

    The US carriers built-out their 3G networks in the way European carriers built-out 2G a decade before. The European carriers are not pushed to build 3G at the same rate since the revenue is voice (2G) based and neither the US nor the European carriers have found a way to actually make money out of the 3G speeds.

    Regarding government intervention, if the carriers had not been so stupid to pay billions to gov't for 3G licence they would have had more money to actually build network but that doesn't equal profit since the gold app for 3G is yet to appear.

    Apple launched iPhone in the US because that is where its market is and where it's business model is legal. In Europe the handset competition is fierce (and not carrier constrained as in the US), the iPhone stands out for its hype not its innovation. The locked to carrier business model is illegal in some countries and legally reversible in most. Apple knows what it is doing. It chose to launch in a less mature, less competitive market, using a business model sustainable only in the US but more long term profit to Apple.

    reply to this | link to this | view in thread ]

  8. identicon
    Dick Fer, Oct 23rd, 2007 @ 5:34am


    Who cares if someone thinks it is complicated. I'm tired of being told what I can and can't do. I am tired of the lack of choice. I'm SICK AND TIRED of dropped calls. Right now, it's worse than it was in the late '90s.
    I'm sick and tired of Verizon trying to nickel and dime me to DEATH! I bought an "unlimited" data plan, I pay $150 a month for data and 2100 minutes of voice, and a 2nd phone for my wife. Verizon says that, after 18 months, my unlimited data isn't _really_ unlimited. In fact, they are trying to tell me that I can't use a my phone as a modem. Verizon also locks down the bluetooth on my wife's phone. Why? So they can charge $.50 or a $1.00 every time she wants to get a photo off of her phone. RIDICULOUS!
    Verizon tells me that if I want unlimited data, I have to buy ANOTHER PCI modem and use that, and pay extra $$$$$. I spent $400 on the phone.
    I want to open up the cellular market. I want to see secondary providers come in for data and text, or picture messaging. Instead of being locked into Verizon for the whole package, let's open it up. Then, AND ONLY THEN, will you see cellular providers compete. They'll certainly compete better when it comes to service. They'll have to if they want to keep you as a customer. I would also like to see contracts limited. I'd like to be able to dispute the contract when Verizon changes the TERMS after a year into the contract. In fact, I want to be able to return the phone for a full refund, and drop the contract like a hot potato. That would give Verizon the impetus to actually write a contract and STICK to it. In fact, I'd like to add an "early contract change fee" to reward consumers who get the shaft from their cellular providers when they change their contract. Instead, it's ALL one-sided. I'm sick of it. I wish the AG's office announced a lawsuit against Verizon also.

    reply to this | link to this | view in thread ]

  9. identicon
    Telco Slave, Oct 23rd, 2007 @ 5:50am

    Death to the RBOCS

    Just wait until Verizon and AT&T return to the old days of a monopolistic stranglehold on the market. It will be the end of innovation and competitive pricing. Old Ma Bell is stitching itself back together like Frankenstein's monster, yet congress seems oblivious to their intent: eliminate competition.

    reply to this | link to this | view in thread ]

  10. identicon
    Anonymous Coward, Oct 23rd, 2007 @ 2:39pm

    Re: Death to the RBOCS

    Old Ma Bell is stitching itself back together like Frankenstein's monster, yet congress seems oblivious to their intent: eliminate competition.

    I think congress knows perfectly well what the telcos are doing. They've just sold out.

    reply to this | link to this | view in thread ]

  11. identicon
    Boost, Oct 30th, 2007 @ 6:05am

    Re: Re: the impact of no government intervention

    While the Iphone may have been Apple's first phone, it was not the first phone to combine the features that the Iphone combines. Look no further than mobile phone maker, Nokia for those honors. I think it was the E80 or something like that. Gosh, can someone help me out with a link?

    reply to this | link to this | view in thread ]

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