[Infowarrior] - Telecom's New Battleground: Carriers' Proprietary Controls

[Richard Forno]

A Call To Let Your Phone Loose
Telecom's New Battleground: Carriers' Proprietary Controls

By Charles Babington
Washington Post Staff Writer
Friday, February 9, 2007; D01

http://www.washingtonpost.com/wp-dyn/content/article/2007/02/08/AR2007020802
169_pf.html

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 groundbreaking 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 ring
tones or music from one provider only.

"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."