No Wireless Net Neutrality Rules Needed, Entrepreneurs Say
Some wireless carriers may have tough rules to protect their systems, but that doesn’t mean the FCC should mandate net neutrality, at least now, a venture capitalist and the CEO of a high-tech wireless startup told an FCBA wireless lunch Thurs. Neither endorsed Skype’s call for a Carterfone rule for wireless (CD Feb 22 p6).
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“I personally would like to see the market play out for a while before looking for regulatory solutions,” said Michael Avon of Columbia Capital: “I think you see all of the U.S. carriers open to some degree of bringing down the walled garden and some degree of net neutrality.” Controls can have unintended consequences, said Jon Jackson, CEO of MobilePosse, which is developing an advanced network for mobile marketing: “This falls under the category of ‘be careful what you wish for.’ If we all say we need regulation, we might not end up with what we want… It’s a tough question. Carriers have a lot of power… But I'm a businessman, so I typically say, let the market figure it out.” Carrier rules can stifle innovation, Jackson said: “I would like to see other entrants in this space. Right now there’s a lot of great ideas out there that never see the light of day.”
Nokia, Apple and other gear makers are starting to offer handsets in the U.S. market directly to customers and not through carriers, said Michael Altschul, gen. counsel at CTIA: “And if you go to eBay on any given day you will find 8,000 or more handsets for sale that are not locked… For those consumers who are interested in bringing their own devices to a carrier network… there are choices now. There are going to be more choices depending on how the market responds.”
There are 230 million cellphones in use in the U.S., Altschul said. “There will be some people who will be early adopters and who will want the newest, most full-featured phones,” he said: “For them, being able to go directly to the handset manufacturer is going to be an attractive option. There are going to be other users who want everything put together so that it will be seamless and one-stop shopping. And there is every flavor in between.”
History shows that a Carterfone rule would discourage innovation, Altschul said. “We had a Carterfone-like rule for wireless and that’s the AMPS [advanced mobile phone system] standard,” he said: “The FCC required carriers to support the analog standard… As a result, analog phones do exactly what they did in 1982 and no more. They don’t support SMS. They don’t support video. They don’t support any of the advanced services that we're talking about today and that people are taking advantage of.”
“The Carterfone argument in the Skype paper has no grounding in the real world, since you can go out and buy phones on the open market,” said attorney Howard Symons: “It’s all kind of this seamless effort to try to commoditize the network operator and put all the intelligence into the handset at the edge of the network to the exclusion of also allowing the network operator to also offer some intelligence or content. I don’t know that that’s got a lot of uptake now whether it’s called ‘Carterfone’ or ‘end-to-end’ or ‘net neutrality.'”