FCC to Cell Providers: Open Your Networks?
If you're new here, you may want to subscribe to my RSS feed. If you have any questions, please see my policies page or if you would like to contact me, you can do so here. You can find out more about me here. I sincerely thank you for visiting!
In what anyone that follows the cell phone industry hopes is an initial shot over the bow, FCC Chairman Martin has hinted that any company bidding in the highly anticipated auction of the old television spectrum will have to open the spectrum to any and all comers. The spectrum (known as 700 mhz because of the frequency of the waves used) is highly coveted because these frequencies can easily penetrate walls and can travel much farther than the current frequencies used.
The FCC seems to be getting concerned that innovation in the cell phone market has been stifled by cell carriers that lock phones down so that they can maximize revenues from their customers. For instance, AT&T and T-Mobile use the same technology but the only way you could take your phone from one to the other is by the grace of the company you are leaving. That’s because there is a software lock that will only accept SIM cards from the carrier from whom you purchased the phone. If you are on Sprint or Verizon, you can’t take your phone with you because there is no unlocking mechanism, the phones are permanently locked.
In Europe this is not a common practice. Sure, companies like Vodafone try to lock their phones down but consumers have largely rejected this model by buying unlocked phones that they can use on any network. This allows the consumer to purchase and install software from any vendor, not just the cell companies.
Unlocked phones also come without being crippled by the carrier. For instance, many smartphones have wi-fi installed by the manufacturer but AT&T makes the carriers rip out the wi-fi before they will carry the phone. T-Mobile usually allows wi-fi but that’s because they have a large number of hotspots and try to sell coverage in the hotspots to their customers.
Wi-fi is one of the big reasons that Martin is looking to eliminate the carrier locking system currently in place, according to the piece in the USA Today. He is concerned that this is a symptom of a problem of innovation in the US market and that the US market is falling behind the rest of the world because of the current system.
It is possible to buy unlocked phones in the US, but they are often European or Asian models that come with software and adaptors for those markets (especially if you buy off of Amazon.com). Nokia and Motorola have gone so far as to open their own shops in major markets to offer unlocked phones to American customers. The high-end Nokia models (including the drool worthy N95) will simply never be offered by the cell companies because they are too good.
Opening up markets is always a good idea and I really hope that Commissioner Martin takes a hard stance on this. It’s time to stop allowing cell phone companies to stifle innovation simply because they can.