by Mike Masnick
Wed, Jul 15th 2009 1:13pm
from the spectrum-for-sale dept
Mathew Ingram notes that Google is continuing its campaign to use television "white spaces" for Internet connectivity, a promising concept that hasn't panned out so far. I think the most interesting tidbit in Ingram's post comes from an interview with Richard Wiley, the guy who chaired the committee that developed what became the current digital television standard. Ingram says Wiley told him that one of the broadcasters' criteria for the new standard is that it use as much spectrum as possible. That sounds backwards, but it made sense for the broadcasters, because they knew they'd have to give back any spectrum they didn't use. And it's consistent with past experience; we've written before about the broadcasters' spectrum-hoarding tendencies.
Perverse incentives like this are an inevitable consequence of the FCC's Soviet-style process for assigning spectrum usage. As long as the uses for spectrum are decided by fiat by the FCC, current licensees are going to play these kinds of games to ensure they get the biggest slice they can, even if they waste spectrum in the process. A better way to handle the transition (and still a good idea today, for that matter) would have been to give the broadcasters a fixed spectrum allocation and then allowed them broad flexibility on how to use it—including the right to lease or sell unused portions to third parties. That way, if they found a way to transmit television signals with less spectrum, they would have been able to lease out the unusued portions to third parties who could put it to more productive use.
In addition to promoting more efficient spectrum use in the short run, putting more spectrum on the market (as they're doing in the UK) would have positive effects on the overall telecom market. By driving down the price of spectrum it would make it easier for new firms to get into the wireless market. So far, the relatively small number of licenses that have been put on the market has allowed incumbents to snapped them up and keep out new entrants. Putting more spectrum on the market would make this strategy a lot more difficult to pull off.
by Tom Lee
Fri, Jun 20th 2008 5:32pm
from the be-patient dept
Tim Wu is discouraged. Writing in Slate last week, the telecom expert lamented the terms he's facing as an aspiring iPhone 2 owner: a two-year AT&T contract thanks to the handset's newfound inability to be unlocked and a move toward a more conventional subsidized handset model. Wu sees this as emblematic of a shift in the mobile industry:
The fact that someone like me is switching to AT&T is a sign of the times in the telephone world. The wireless industry was once and is still sometimes called a "poster child for competition." That kind of talk needs to end.
He's right -- but then, that kind of talk shouldn't have been started in the first place. The mobile market was defined by long contracts, locked handsets and a lack of prepaid options long before Apple arrived on the scene. Now it appears that it'll remain that way long after Apple.
Admittedly, this is a disappointment. Many looked at Apple's choice of a second-rate carrier -- one they could bully around -- as a sign that everything was about to change. Finally a handset manufacturer had arisen that was powerful enough to break the industry's self-serving revenue model and empower consumers! With the recent declaration of the iPhone 2's retreat toward conventional industry shadiness, those counting on Apple's benevolent technological dictatorship have found themselves disappointed (as they have before, and no doubt will again). They were fooling themselves anyway: did anyone really think Apple was going to tolerate phone unlocking forever?
But the outlook isn't all grim. As Wu notes, the Google-led Open Handset Alliance is trying to follow in Apple's footsteps with its own game-changing, must-have handsets -- only this time there seems to be a more expressly ideological slant to the effort. And Verizon's Open Development Initiative, while less than perfect, is perhaps even more encouraging in that it shows the industry has begun to acknowledge the market's need for more flexibility in data services.
And that's the real reason for hope: the march of progress. Anyone who tries to paint the mobile industry as the picture of efficient market competition is either in denial or deeply dishonest. But wireless services will inevitably become more important and more available, whether thanks to WiMAX, revived municipal wifi projects (now without capital costs, thanks to the magic of bankruptcy!), spectrum freed by digital broadcasting, or some other wireless technology. The mobile carriers haven't been great at competing amongst themselves, but you can bet they'll begin responding once consumers have reasonable alternatives.
from the convergence dept
We've been pointing out for a while that analysts who try to measure "the PDA market" are wasting everybody's time. The addition of personal organizer functionality to mobile phones (or we could just as easily say, the addition of wireless telephony features to PDAs) meant that phones and PDAs were now part of one big "mobile communications device" market. The next step in that trend, already underway, is the gradual merging of the smart phone and MP3 player markets. An analyst is predicting that half of all cell phones will double as MP3 players by 2011. The cell phone market is getting close to saturation in the developed world, which means that manufacturers have to keep adding new features in order to convince customers to upgrade. I really hope this doesn't mean we'll have to spend the next five years debunking silly stories about the decline of "the MP3 player market."