A Digital Outrigger

Here is a link to an interesting section from this weekend’s On the Media podcast titled Mobile Malcontent. It’s talks about the recent work of Columbia University Law’s James Wu which was also touched on by this Washington Post article. The text of Wu’s article is available via SSRN:

Wu, Tim, “Wireless Net Neutrality: Cellular Carterfone on Mobile Networks” (February 2007). New America Foundation Wireless Future Program Working Paper No. 17 Available at SSRN: http://ssrn.com/abstract=962027

The article accuses the wireless industry of several sins:

1. Placing excessive restrictions on “foreign attachments”. (Why is it that I can’t email a PDF article to a student’s cellphone anyway?)
2. Feature Crippling — an overly strong control over what features manufacturers are allowed to put onto your phone. (Why can’t I have a queryable log of the calls I made from my phone? Why can’t I craft my own ringtones using an MP3 file I already own? And where’s my bluetooth connectivity?)
3. Discriminatory Broadband Services — The restrictions now placed on wireless web browsing seems to have more to do with industry worry over losing out on future markets than it does with a user’s need to browse Zillow while house hunting.
4. Application Stall — which is a state of lockdown on applications development; described by one developer from the article as “a tarpit of misery, pain and destruction.”

In the OTM podcast they also had on an industry apologist whose main argument (a familiar one) is that the cellphone industry exists within a state of “competition”, and because of that there are already sufficient pressures on the industry to effect change. You hear the argument stated this way all the time when it comes to discussions of regulation. Taking a look at Barron’s Dictionary of Business Terms, “competition” is described this way:

COMPETITION: rivalry in the marketplace. Goods and services will be bought from those who, in the view of buyers, provide ‘the most for the money.’ Hence competition will tend to reward the more efficient producers and/or suppliers and so lead the economy toward efficient use of resources.

That’s the industry line in this argument, and I believe they understand what it actually means. Consumers, on the other hand, I believe tend to think of things this way:

PERFECT COMPETITION market condition wherein no buyer or seller has the power to alter the market price of a good or service. Characteristics of a perfectly competitive market are a large number of buyers and sellers, a homogeneous (similar) good or service, an equal awareness of prices and volume, an absence of discrimination in buying and selling, total mobility of productive resources, and complete freedom of entry. Perfect competition exists only as a theoretical ideal. Also called pure competition.

This brings me to Apple’s upcoming iPhone. I believe that consumers expect that “competition” will allow them to purchase an iPhone this summer and, just like it shows on Apple’s mockup, be able to surf, email, watch stocks, listen to whatever, and maybe transfer files to and from their computers. But it’s not the case because of restrictions in place brought about by the industry. Take a look at the Cingular coverage for Montana. (iPhones will supposedly only work with Cingular.) It’s non-existant because it’s nearly 100% provided by partners. Cingular’s description for partner coverage contains this phrase: “Excessive use of Partner coverage may subject your service to early termination, in accordance with your service terms. Data services may not be available.” Now take a look at this Rocketboom video published when the iPhone was first announced. That’s what I think consumers expect from “competition”, namely the ability to embrace “trysumerism” with a minimum of friction.