Posted on 07/13/2007 10:06:10 AM PDT by Sonny M
U.S. consumers should be allowed to take phones along with them when they switch wireless carriers, and spectrum to be auctioned through the U.S. Federal Communications Commission should include rules requiring the winning bidders to sell access to competitors at wholesale rates, some U.S. lawmakers said Wednesday.
Some members of the U.S. House of Representatives Subcommittee on Telecommunications and the Internet also questioned what they called huge early termination fees on wireless telephone contracts. But other lawmakers and executives with wireless carriers questioned the need for new wireless regulations, saying an already competitive market protects customers.
The U.S. wireless industry is "vigorously competitive," with four national and several regional carriers, said Representative Fred Upton, a Michigan Republican. New net neutrality and open access rules that would require carriers to open up their networks to new devices and applications could slow wireless innovations, he said.
"We should take care to not adopt policies that would set back the highly competitive wireless market," he added. "No matter how you slice it, forced network neutrality smothers investment in a competitive market, and in the end, will leave consumers worse off with probably fewer choices."
But other members of the subcommittee, mostly Democrats, questioned why phones can't switch between wireless networks. U.S. customers should also be able to run any applications they want on wireless networks, instead of having limited choices approved by the carrier, said Representative Mike Doyle, a Pennsylvania Democrat.
"It's time for consumers to become the deciders of what they want their phones to do," Doyle said.
Apple Inc.'s recent launch of its iPhone demonstrates the "promise and problems" of the U.S. wireless industry, added Representative Ed Markey, the subcommittee chairman and a Massachusetts Democrat. While the iPhone has innovative new technologies, U.S. customers can use it with only one wireless carrier, AT&T Inc., he said.
Other lawmakers called on the FCC to go farther than requiring device portability and application choices when it sets the rules for the use of spectrum to be auctioned in the 700MHz band. Part of the 60MHz of spectrum to be auctioned by early next year should include requirements for the winner to offer the spectrum at wholesale rates to other wireless and broadband providers, said Representative Chip Pickering, a Mississippi Republican.
A wholesale rule would allow new wireless broadband providers to spring up all over the country, Pickering said. The 700MHz spectrum, now used by U.S. television stations for over-the-air broadcasts, would allow for long-range wireless broadband services, many experts say.
The wholesale rule wouldn't put new regulations on existing wireless services, Pickering said. "What's wrong with that?" he asked.
There's nothing wrong with a carrier voluntarily deciding to wholesale its spectrum, said Steven Zipperstein, general counsel for Verizon Wireless Inc. "We don't think a business model should be hard wired into the auction by regulatory fiat," he said.
Ed Evans, CEO of startup carrier Stelera Wireless LLC, questioned whether a wholesale business model would succeed in the new spectrum. "You're going to give up a scarce resource... that you're not going to be able to recoup the value on," he said. "You're going to prohibit other people from deploying proven technologies in that same area."
But Jason Devitt, co-founder and former CEO of Vindigo, a company that distributes local guides on mobile phones, said the U.S. needs a more open wireless system where application providers don't have to work out deals with wireless carriers. "We have a regulatory system that doesn't work," said Devitt, now CEO of Skydeck, a wireless startup. "I'm mad as hell that I require permission to innovate in the wireless market."
While wireless customers usually have to switch devices when they switch carriers, U.S. television subscribers don't have to buy a new TV set when they switch from cable TV service to satellite, added Timothy Wu, a professor at the Columbia Law School and supporter of open access rules. "There's something strange about this industry," he said. "Even the rules of personal property... seem to be suppressed."
I think wireless providers should allow interchangeability but I understand why they want to fight it. They would have to work harder to keep consumers. Right now they have a somewhat captive audience that in order to switch faces considerable hassle. Anything that allows consumers more freedom in controlling how they use the expensive devices they purchase I am for it. Too many companies want to force customers to operate in a commune. They are going to have to learn that just because they sell something to someone doesn’t mean they own that person and their future decisions.
Personally I’d like to see more laws prohibiting anticompetitive contracts that interfere with the consumer’s ability to easily switch services when dissatisfied. We see this in all kinds of contracts from rental agreements to cell phone service agreements. Businesses should not be protected from the dissatisfaction of their customers and customers should not have to bear the brunt of financial cost when they decide to break a relationship with a service provider. A consumer driven capitalist engine will drive higher quality, greater freedom, and higher value for all.
I do not think it is a coincidence that in the industries and organizations where consumers have the least real control that the service and the value is the least.
I'm not so sure about that. At the other end of the spectrum you would have a business model where consumer entry/exit costs nothing -- which means you end up with cheap, sh!tty service all around. Sort of like driving on public roads these days.
This should be sold as an environmental issue - I personally have 5 phones that are now nothing more than trash.
Hey, don’t discount the skeet shooting potential...
Thanks to the US CONgress, those of us who work out in the boonies are incommunicado.
It’s even more simple than that. Free all phone services from regulatory control and watch rates plummet and services increase.
The iPhone uses proprietary AT&T server software for it’s Visual Voicemail, among some of the other features. You won’t see Sprint, Verizon or any of the also-rans allowed to run it any time soon.
I disagree. Anticompetitive conditions in contracts that add additional costs above and beyond the cost of the equipment to utilize a service are not good. A person would still have to pay for the phone but I don’t think purposely limiting an individuals ability to use the equipment with any service is reasonable. Just because you sell me a TV should never mean I have to buy your cable service and only your cable service. If your service is worth having I will buy it.
Public roads are not a good example though in many areas they are very good. It is not as if the road system in a community is bid on wholesale by a road construction firm and then whether or not the road construction firm keeps the roads in good condition determines whether they get renewed.
What happens instead the road construction is managed project by project through an expensive slow bureaucracy.
If the bureaucrats jobs were tied to the publics opinion of the roads then the roads would improve.
I think all consumers benefit from having the freedom to use their electronic devices and media the way they see fit and to reject services and media they are unsatisfied with without losing out financially. The person providing the unsatisfactory service should be the one paying when the lack of service causes people to leave not the customers.
Most companies don’t need to develop what can only be termed parasitic contracts requiring individuals trade a their individual freedom for access.
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