Telecom's New Battleground: Carriers' Proprietary Controls
By Charles Babington
Washington Post Staff Writer
Until federal regulators issued a landmark ruling in 1968, Americans
could not own the telephones in their homes, nor attach answering
machines or other devices to them. Now, a growing number of academics
and consumer activists say it's time to deliver a similar
ground-breaking jolt to the cellphone industry, possibly triggering a
new round of customer options and technical innovations to rival the
one that produced faxes, modems and the Internet.
Wireless carriers, which limit what customers may do with their
phones, say the move is unnecessary and potentially harmful. But in
articles, blogs and speeches, a number of researchers are asking why
the companies are allowed to force consumers to buy new handsets when
they change carriers; pay a specified carrier to transfer photos from
a camera phone; or download ringtones or music from one provider only.
Wireless carriers' controls of handsets and services may be the coming
battleground in telecomunications. (By Jb Reed -- Bloomberg News)
"At some point, I think Americans are going to put their foot down and
say, 'We won't tolerate this anymore,' " said Dave Passmore, who has
written extensively on the issue as an analyst for the Burton Group, a
research firm.
Activists who share his view are seizing on an article circulated by
Columbia University law professor Tim Wu, an authority on
telecommunications issues. Wu, who plans to present the paper
Wednesday at a Federal Trade Commission hearing on Internet access,
writes that wireless carriers are "aggressively controlling product
design and innovation in the equipment and application markets, to the
detriment of consumers. Their policies, in the wired world, would be
considered outrageous [and] in some cases illegal."
The wireless carriers, however, say that forcing them to open their
networks to unfettered use is not needed, because consumers have
several options for carriers.
"Wireless is a competitive industry and consumers enjoy the greatest
number of choices among services, devices, calling plans and coverage
areas in the entire telecom industry," the main trade group, CTIA --
The Wireless Association, says in a policy statement. "CTIA opposes
the recent attempts to supplant competition and market discipline with
heavy-handed, anti-consumer regulation."
Verizon Wireless spokesman Jeffrey Nelson also called the industry
highly competitive, noting that consumers can choose among numerous
handset models and four major providers of cellular service: Verizon,
AT&T, Sprint-Nextel and T-Mobile. "If you don't like what one company
enables," he said, "find somebody else ... To suggest it's a
locked-down industry is crazy."
Moreover, eliminating controls on the wireless network could undermine
its security, said another Verizon Wireless spokesman, John
Johnson. His company limits Bluetooth applications in part to prevent
illegal access to users' personal information, he said, a problem in
some European markets.
It was the Federal Communications Commission that issued the
far-reaching 1968 ruling, and some analysts think the current
five-member commission is at least willing to listen to Wu, Passmore
and others. But in an interview yesterday, FCC Chairman Kevin
J. Martin made no commitments.
In general, he said, robust competition and choice spur innovation and
lower prices for consumers. For now, at least, Martin said, the major
wireless carriers are competing vigorously against each other, and he
said would not favor FCC intervention unless there was evidence that
innovation was beginning to suffer and prices were becoming
unreasonable. "The jury is still out," said Martin, a Republican
appointee. "It's something we're watching."
Some predict the debate will spread quickly beyond academic and
political circles. "This paper has the potential to become a huge
telecommunications issue," said Art Brodsky, who tracks the
communications industry for the advocacy group Public
Knowledge. "People now don't understand how limited they are in what
they can do with their cellphones. This is a totally ripe issue."
Some of Wu's allies say they may use his research to petition the FCC
to force wireless providers to loosen their restrictions on phones.
Wu, Passmore and others cite restrictions involving applications like
Bluetooth, which facilitates communications among such devices as
printers, personal computers and wireless headsets. In an article last
year for Business Communications Review, Passmore wrote that Verizon
disables "all Bluetooth profiles except wireless headsets and dial-up
networking. You can forget about using Bluetooth for synchronizing
your phone's calendar or address-phone book-contact information with
your PC's. Nor can you move any music or other files between your
phone and PC, or move photos off of your phone (unless you're willing
to pay Verizon 25 cents apiece for the privilege of using their
network for photo transfers)."
Wu, in his 40-page article "Wireless Net Neutrality," notes that AT&T
and T-Mobile "lock" their cellphones so users cannot continue using
them if they switch carriers. The companies allow customers, upon
request, to unlock the phones after a certain time. But Wu says "most
consumers have no idea what a phone lock is" in the first place, and
therefore don't know that they can reuse their phones.
Some hold up Apple's iPhone as another example of the industry's
restrictive practices, because it will operate only on AT&T's mobile
service when it goes on sale this summer.
Critics of such restrictions say the FCC should consider applying the
so-called "Carterphone" rules to the wireless industry. The 1968
ruling allowed inventor Thomas Carter to attach a device to AT&T
phones that would convert two-way radio signals from offshore oil rigs
to phone calls. AT&T, then the all-powerful Ma Bell, strenuously
objected, saying any non-AT&T device could seriously damage the entire
network.
The FCC disagreed and the Carterphone decision became "a kind of Bill
of Rights or Magna Carta for telecom users," Passmore recently wrote.
Wireless carriers, however, say today's competitive environment does
not resemble Ma Bell's monopolistic power in the 1950s and '60s, and
no new Magna Carta is needed.
"This whole issue is a giant red herring," said AT&T spokesman Mark
Siegel. "This is a fiercely competitive industry," which has grown
"almost entirely through the force of competition in the marketplace,
more innovative devices and services, and continually lower prices."
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[TELECOM Digest Editor's Note: Well, the liars at SBC continue their
fraud and lies. Now of course, they are the new owners of AT&T, so
you can expect their lies to continue, until, of course, if/when
someone slaps them very hard and makes them stop lying and scamming
people. Here's a for instance: You've probably heard about Cingular
Wireless' Family Plans. You renew (or start) a contract with them,
and you are entitled to receive up to three or four new phones on the
same account for just ten dollars per month. If you have an unlimited
account with rollover unused daytime minutes, this is a good deal.
So my brother, in Chicago chatted recently with my mother regards her
cell phone (presently Alltel, on a 620 number. Completely local here
... my brother renewed his contract with Cingular Wireless on the
condition he could get Family Plan; with a phone for his wife, his
child, and our mother. They are all on area 773 of course, for
Chicago. The object is to save mother a bit of money on her phone
bill. Cingular told me they could care less what area code was in
use on the phones; they told my brother Daniel the same thing. So
Dan agrees to renew his contract for another two years (that got him
all the new phones free); he said I want three of the phones on 773
(where they are at now, phone-wise) and I want one of them on 620,
preferably in the Independence rate center. "Not a problem," said the
sneaky salesman, but I won't be able to give you the 620 number on the
one phone for thirty days ... well, the thirty days expired a couple
days ago, Dan went to see them with that particular phone, Cingular
now tells him they cannot do it; no change of area codes. That,
despite the fact that _I_ heard differently, _Dan_ heard differently,
mother (who knows little from nothign on the matter) got the same
impression. I suggested to Dan he purchase another SIM card with a
620 number, but he is reluctant to do that. Do any of you readers
know anything about Cingular's Family Plan and what the deal is? PAT]
Charles Babington (washpost@telecom-digest.org)