Air Time: Neutrality On the Wireless Internet

If you've ever had the sense that basketball legend Walt Frazier was looking into your eyes when pitching Just for Men hair coloring, you may be old enough to remember the days when AT&T prohibited the attachment of third-party telephones to its network. That practice ended in 1968 with the FCC's Carterphone ruling, which opened the PSTN to device competition. Western Electric lost its phone monopoly, stimulating the development of more functional telephones as well as dialup modems, which made it possible for millions to get their first taste of the Internet.

History may be repeating itself in the cellular industry, where the network neutrality debate has gone wireless. Wireless net neutrality has a number of different meanings, but the one of greatest interest to IT pros relates to the linkage between mobile devices and wireless services. By offering subsidized devices and rolling the cost into service contracts--a practice known as tying--carriers exert an inordinate amount of control over the design of smartphones, stifling device portability and feature innovation. Wireless carriers deserve credit for delivering useful services at an affordable price, but now it's time for them to hand mobile devices over to the free market.

Enterprise IT pros have long enjoyed the benefits of standards-based network device interoperability. We take for granted our ability to attach any vendor's Wi-Fi compatible client to any other vendor's Wi-Fi infrastructure. This interoperability, while frequently imperfect, spurs innovation, competition and low prices. But in today's mobile broadband market, it's like the early days of telephony. Pick a service provider and live with its devices.

Carriers naturally look to maximize their profits, but as an oligopoly, they invite special scrutiny of their business practices. As Columbia University law professor Tim Wu put it in a recently published report, U.S. wireless carriers have a track record of "aggressively controlling product design and innovation in the equipment and application markets, to the detriment of consumers." This so-called "knobbling" of mobile devices takes many forms, but the most notable is the elimination of Wi-Fi capabilities from smartphones. The most notorious example is the Nokia E61, a smartly designed dual-mode GSM/Wi-Fi smartphone. Unfortunately, the E61 is not available through any U.S. carrier, but the E62--an E61 sans Wi-Fi--can be yours at a reasonable cost, subsidized, of course, by a two-year service commitment.

Device manufacturers, highly motivated by a desire to differentiate their offerings, often find themselves caught between developing products that address the needs of end users and meeting the business needs of their true customers--the carriers who resell their products.Although it's important to call attention to the adverse effects of knobbling, the carriers are behaving rationally. By subsidizing device costs and making it difficult for consumers to move their mobile devices between networks, they are facilitating the adoption of more advanced mobile devices that can increase the average revenue per user, while reducing the dreaded churn rate. In the process they are eliminating the complexity associated with dual-mode devices, which often leads to a more positive user experience, like enhanced battery life.

Some may feel the market, as imperfect as it may be, can solve this problem on its own. All it will take is for one upstart wireless carrier--T-Mobile comes to mind--to encourage rather than discourage new dual-mode device designs. Once that door is open, others will have to follow. But that's no sure bet. It may be time for regulators to intercede, by forcing carriers to itemize the device subsidy on every bill and giving their customers the option to avoid that cost by purchasing the devices themselves. Short term, such a practice may not reduce costs for consumers, but it will re-cast them as the real customers for device manufacturers. The long-term effect of such a shift will almost certainly be positive.

Dave Molta is a Network Computing senior technology editor. He is also assistant dean for technology at the School of Information Studies and director of the Center for Emerging Network Technologies at Syracuse University. Write to him at [email protected]