People + Policy
= Positive Change for the Public Good
Apple’s iPhone looks good enough to eat.
I’ve yet to take a bite of this “smart” phone, but know that once I do, there will be no going back; I’ll be reaching for it before I get out of bed and updating my Facebook status from yoga class. (“I think I just found my chi. Wait—it was my phone on vibrate.”)
The temptation to join the growing legions of iPhone admirers is strong. So what’s stopping me from signing up?
Purchasing an iPhone means I have to become an AT&T subscriber. The company has an exclusive deal with Apple to provide wireless service to iPhoners—meaning I’m backed into a corner. If I don’t like AT&T, or it’s not available in my area, I’m facing a digital impasse: no service, no phone.
This is unfortunate, not because I’m missing out on the iPhone’s “bar finder” application, but because smart phones are setting the stage for the future of the mobile Internet. They are revolutionary because they free us from our home or office computers. We can catch breaking news, create and upload content, and navigate online social networks and movements from anywhere.
It’s the Internet—some might say “the world”—in our pockets. Or at least, it could be. But companies like AT&T and Verizon are getting in the way by shackling innovative devices like the iPhone and the BlackBerry Storm to closed networks.
These exclusive deals limit consumer choice and stifle innovation. Rural residents who can’t get cellular service from the wireless carriers holding exclusive rights to popular smart phones like the iPhone are left watching the commercials for them. If smaller, more local wireless carriers were allowed to service them, these phones could be available to rural America.
So much for innovation
So what does this “handset exclusivity” issue look like? Let’s revisit the iPhone.
People across the world have been welcoming Apple’s latest version, the iPhone 3G S, the way Twilight fans scream for movie number two. This new phone offers new applications, such as multimedia messaging, and tethering—the ability to connect a laptop computer to the Internet through the iPhone. But here’s the thing: AT&T doesn’t support these new features yet, though the company plans to eventually.
Americans can buy the new phone, but because iPhones are married to AT&T, frustrated users can’t abandon the telecom company for another, more savvy, carrier. So much for innovation. So much for consumer choice.
Other applications, like Skype and SlingPlayer, also won’t work on the American iPhone.
Is AT&T just slow to evolve to the changing technology? What else might be driving AT&T?
Tim Karr, of Free Press, offered one explanation in a blog post at Savetheinternet.com:
"Some clues might come from the company’s long and turbulent relationship with any new technology that threatens its control. For decades, the old AT&T telephone monopoly controlled every phone on its grid and banned other companies from connecting innovative devices—including answering machines, fax machines, cordless phones and early computer modems."
Thankfully, in 1968, the Federal Communication Commission’s “Carterfone Decision” pried open the telephone marketplace, giving consumers the power to choose both phone products and phone service.
AT&T/iPhone-type bundling is not happening in similar markets. We don’t have to subscribe to Comcast when we purchase a certain type of laptop (though monopolies may force our choice). If we’re springing for a flat screen TV, we’re not designated a specific cable provider. And we don’t have to fuel our cars with a particular brand of gasoline.
Yet nine of the ten most popular phones in the United States are chained to big wireless carriers, In fact, about 90 percent of cell phones purchased here are sold by a mobile service provider. (In Asia, 80 percent of cell phones sold are not attached to a carrier. In Europe, that number drops to 70 percent.)
Free my phone
Consumers should have the freedom to choose any phone on any network, to choose among many carriers in a competitive, low-cost marketplace and to access any Web content, applications or services they want.
Thousands of people have joined me and the organization I work for, Free Press, in protesting handset exclusivity and urging our lawmakers and the Federal Communications Commission to step in. Already, the FCC and Congress are responding.
Last month, Sen. John Kerry (D-Mass.) and three other senators sent a letter to the FCC urging the agency to investigate the issue. A few days later, acting FCC Chairperson Michael Copps announced that the agency would investigate handset exclusivity.
Copps wants the FCC to determine whether exclusivity arrangements “adversely restrict consumer choice or harm the development of innovative devices,” and said that his agency will “take appropriate action if it finds harm.”
There’s no doubt in my mind that these phone deals are harming consumers and smothering innovation—and that we need a policy change to unlock cell phones from our wireless carriers and unshackle us from corporations. Until then, “smart” phones like the iPhone are less than smart.
This article was first published on InTheseTimes.com.
People + Policy
= Positive Change for the Public Good