CONCEPTUALLY, AT LEAST, FEW THINGS could be more appealing to mobile consumers than open wireless access.
Richard Whitt, Google Inc.’s telecom and media counsel, painted a picture of a veritable mobile utopia on the company’s blog last week as Google and its allies lobbied the FCC to adopt new rules for the highly coveted 700 MHz band. In a kind of consumers’ manifesto, Whitt argued that winning bidders should be forced to allow open access to content and applications as well as unrestricted devices on the airwaves.
“Consumers should be able to download and utilize any software applications, content or services they desire,” Whitt wrote, and “should be able to utilize a handheld communications device with whatever wireless network they prefer.”
Third parties should be able to buy spectrum from winning bidders on a wholesale basis, Whitt continued, and should be able to interconnect “at a technically feasible point” in the network.
“We believe that adopting these four license conditions collectively will encourage prospective broadband companies to participate in the auction, and be able to bid successfully for the available spectrum,” Whitt contented. “And consumers ultimately will come out ahead in that rich and vibrant broadband environment.”
FCC Chairman Kevin Martin seems to agree-at least in part. Martin generated headlines nationwide last week when his office leaked a draft order that proposed a level of open access on at least part of the band of spectrum. But while open access sounds remarkably simple-allowing a customer to buy a handset off the shelf, install whatever software he’d like and connect to any network-it appears to present many more questions that it addresses.
Missing pieces
“That’s the piece that people are leaving out,” said Jane Zweig, chief executive officer of Maryland’s Shosteck Group. “It’s one thing to talk about the open access that Google and others are looking into, and as a consumer I think it’s great. But if I was a manufacturer of handsets, I’d have to look at the implications of that.”
Phones might have to be built to support a variety of cellular networks, Zweig noted, including perhaps Wi-Fi, WiMAX and whatever new technologies appear in the coming years. And that’s in addition to Bluetooth, Near Field Communications and whatever other short-range technologies the market will demand from handsets.
“You put all that together into something that will be expensive, bulky, and I’m sure there will be battery issues,” Zweig predicted. “I don’t think anyone has thought of the ramifications of the handsets. You need scale, because if you don’t have scale you don’t have cost efficiencies.”
And while the tier-one operators often behave as “Soviet ministries,” as columnist Walt Mossberg likes to refer to them, they are effective at managing their own networks. U.S. carriers are responsible for certifying the wares of application developers, minimizing the risk that a subscriber buys an inferior product or has a painful user experience. Consumer backlash against operators helped curtail the questionable business practices of some direct-to-consumer storefronts in the early days of mobile content. And service providers have created an effective-if short-sighted-buffer between subscribers and controversial adult content.
Martin claims that open access would allow users to download any mobile broadband application except those that are illegal or could harm a network. Without a carrier to oversee traffic, though, it’s unclear who would enforce such restrictions.
“That’s one of the real big issues that I don’t think anyone has figured out yet,” said Weston Henderek of Current Analysis. “It brings into question the operation of the network, all the underlying factors. If it’s a closed, private network, it’s much more easily controlled.”
One of the most important questions on the horizon is who might bid on spectrum that mandates open access. Google is leading the charge to get the FCC to change the rules for the upcoming auction, but Whitt concedes that “the existing national wireless carriers are likely to prevail in the bidding process against a potential new entrant like Google,” leading many to speculate that it may sit out the auction while the uncertainties play out. Established cellular players aren’t likely to gamble on spectrum if the proposed rules are adopted, and traditional media companies face a daunting and expensive task in building out a wireless broadband network.
Whether the FCC will adopt the proposed changes, of course, is still unclear. Martin is obviously interested in open access, but the powerful wireless industry is lobbying hard to maintain the status quo. Onlookers speculate that the FCC may try to split the baby, mandating some less controversial open-access features for the auction but keeping the bulk of its current policies. And it’s likely that the market-not the governmental-will hash out the uncertainties once the auction is completed.
The surest bet, though, is that the commission’s final decision will draw ire from both established wireless players and others looking to change the rules of the game.
“This is one of those things that’s hard to predict, but based on history and politics, there will be concessions on both sides,” Henderek predicted. “That doesn’t always come to the best resolution.”
