From early indications, the uncertain shift to open platforms in the wireless space will not take a linear path and instead is apt to evolve in zigzag fashion due to variances in unpredictable political, technological and market forces.
The answer to the question, ‘What does open access mean?,’ has proved elusive. The definitional uncertainty about open access is likely to continue and may well become the norm. For now, open access means what key stakeholders – particularly wireless carriers, but also device makers, applications developers, policymakers and, yes, users – want it mean. In other words, open access is up for grabs. But only to a point. Cellphone operators remain highly protective of their networks, which – despite data revenue gains – still largely support voice traffic. They are the gatekeepers. But with growing demands to loosen their collective iron-clad grip on networks, wireless providers are inching toward a brave new world overflowing with the kind of third-party device and applications that have creatively disrupted the wired online universe.
The Federal Communications Commission next month is expected to grant a nationwide collection of C-Block open-access licenses, purchased for $4.7 billion by Verizon Wireless in the 700 MHz auction earlier this year. It could be some time, though, before it can be determined whether openness on the C Block meets FCC standards. It’s completely new territory.
The No. 2 wireless carrier is also pursuing an open development initiative. Device certification is moving along, but it’s not just about smart phones. Verizon Wireless is intently focusing on the machine-to-machine market, with corporate strategy also extending to the business-to-business and business-to-customer markets.
T-Mobile USA Inc., the No. 4 wireless provider, is due this week to roll out the highly-anticipated G1 – a handset based on Google Inc.’s Android open-source operating system. But before a single G1 is fired up, there are indications the smartphone may be less than accommodating to all the applications subscribers might desire. It is an ironic twist in view of Google’s highly public, aggressive lobbying at the FCC to incorporate open access in the 700 MHz band.
No turning back
One thing is certain, regardless of progress to date in the emerging wireless open-access arena: There is no turning back. Open access – at least as a policy issue – is here to stay. Public-interest groups and policymakers are fighting to making open access a component of more and more wireless rulemakings.
The real question is what will be the reach and breadth of wireless open access in concrete implementation.
The political backdrop to the open-access debate is not inconsequential. No matter who becomes the next president, the controversy over network control – the overarching net neutrality debate – will continue to rage. Republicans generally are not fond of seeing the government dictate to telecom companies how they should manage their fat pipes. In contrast, many Democrats favor net neutrality. If Democrats capture the White House and pad their majorities in the House and Senate, net neutrality could get a big boost that might bleed into the still simmering ‘wireless Carterfone’ controversy at the FCC.
At industry association CTIA’s trade show in Las Vegas in April, Martin drew thunderous cheers when he told a keynote audience he wanted the FCC to reject a potentially game-changing petition filed by Skype Ltd.
The software-based Internet phone company last year asked the FCC to apply to the wireless industry a requirement in the landmark 1968 Carterfone decision allowing third parties to attach devices to the public landline network.
“In light of the industry’s embrace of this more open approach, I think it’s premature for the commission to adopt any other requirements across the industry,” Martin said at the time. And thus … I am going to circulate to my fellow commissioners an order dismissing a petition by Skype that would apply Carterfone requirements to the existing wireless networks.”
But six months later, the FCC has yet to act on the Skype petition. It is still alive, a matter of some anxiety and heartburn for cellular carriers.
Even if its wireless Carterfone campaign goes down in flames, Skype has signaled it will continue the fight. Indeed, the company appears to have already recalibrated its strategy to persuade telecom policymakers to ban cellular carriers from shutting the door on its product and those of other firms also anxious to reach the nation’s 265 million cellphone subscribers.
Meantime, with the Skype petition remaining in play and Martin’s chairmanship nearing an end, sparks have begun to fly again.
The Phoenix Center, a think tank that focuses on telecom policy, concluded in a recent report that an open-access rule on the wireless industry would raise cellphone prices for consumers.
“It is ironic that proponents of wireless Carterfone tout the rules as being ‘pro-consumer’ because our analysis shows that such rules would likely drive up the cost of equipment with little, if any, reduction in wireless service prices,” said Lawrence Spiwak, president of the Phoenix Center and co-author of the report. “The pricing implications of wireless Carterfone are about as anti-consumer as you can get.”
In a September letter to Martin, Christopher Libertelli, senior director for government and regulatory affairs in North America at Skype, said remarks made by wireless executives that month at a San Francisco convention suggested the industry was really not serious about opening their networks.
CTIA accused Skype of taking wireless executives’ statements out of context.
“The truth is that wireless carriers, reacting to demands of consumers in the competitive marketplace, are implementing a variety of openness initiatives designed to expand consumer access to new and innovative wireless devices and applications,” CTIA told Martin.
Likewise, Sprint Nextel Corp. criticized Libertelli’s take on CEO Dan Hesse’s comment, “The big Internet can be daunting.” Sprint Nextel told the FCC Hesse had stated wireless smartphones and personal digital assistants are frequently returned after the Christmas season, a trend that prompted the No. 3 wireless provide to launch its Ready Now program to provide one-on-one assistance to customers in setting up and operating new wireless devices.
Libertelli responded with fervor to CTIA and Sprint Nextel. “Rather than prolong an empty debate about whose characterization of remarks at the conference is correct, let me point our that Skype’s application is forbidden, blocked and otherwise interfered with by the largest CTIA members,” he said in a letter this month to Martin. “When CTIA members claim that ‘the entire Internet is open,’ the intended implication is that the entire Internet is open, including multi-modal Internet communications applications like Skype. The truth of the matter, however, is that, despite their representations to the contrary, applications are blocked even on the most recently announced handsets.”
Indeed, open access is bound remain open to interpretation for some time to come.