Who knew the Federal Communications Commission (FCC) was getting ready to lead a revolution? Late last week, the Commission came out with its 352-page decision on the 700 MHz auction.
That's not bad considering the complexity of the subject, and the fact that most of the paper is taken up by summarizing, and then answering, the major arguments submitted in mounds and mounds of comments.
Buried within the order is some of the strongest language the FCC has ever uttered against a telephone company – even a wireless company. The FCC has on occasion had some harsh language for cable, but the telephone companies have been relatively sacrosanct.
In its discussion of the one pro-consumer part of its decision, the Commission wrote: “Although wireless broadband services have great promise, we have become increasingly concerned that certain practices in the wireless industry may constrain consumer access to wireless broadband networks and limit the services and functionalities provided to consumers by these networks.”
That's quite the revelation from an FCC that generally tries to be helpful to the industry when it can. What exactly are the commissioners concerned about? It seems that equipment manufacturers, acting at the direction of the carriers, “disable certain capabilities” in their phones, like Wi-Fi connectivity without “appropriate justification” without telling their customers.
That's a valid concern, but in the scheme of things, somewhat minor contrasted with the overall situation consumers face. There's nothing in the order about the inability of cellphone subscribers to take the phones they have purchased from one service to another – just that the phones are hobbled – without consumers even knowing it.
Unfortunately, it was all a tease. Having at least sort-of recognized the problem, the Commission then backs off from doing anything major about it in any meaningful way.
Rather than ordering that all of the spectrum up for auction, about 60 MHz, be subject to the consumer-friendly conditions for flexible phones, the FCC only said that about one-third had to be. Their rationale was that: “We cannot rule out the possibility that such a requirement may have unanticipated drawbacks as well.” Unfortunately, the Commission doesn't give any examples of what those drawbacks might be, or discuss whether any potential problems could be dealt with through the private-sector standard-setting bodies. Those would be the same standard-setting bodies that the Commission praises for its “rich history” and ability to use industry experts.
Instead of requiring all of the spectrum to be consumer-friendly, the FCC wants the marketplace to sort it out. That would be the same marketplace that, as the FCC said, has hobbled phones so far.
PC Magazine has a fascinating examination of how different carriers use the same phone, in this case Motorola's RAZR2. The article looks at how Verizon, AT&T, Sprint and Alltel configure the same basic phone. Reporter Sascha Segan's concludes that his tests show “exactly what's wrong with the US market.”
According to the article: “The RAZR2 platform is capable of running a variety of Web browsers, e-mail platforms, and, with the right APIs, throwing live video onto the external screen. Messaging software developers and video programmers should be able to compete and outdo each other at using that gorgeous external screen. That would be a truly competitive market, unleashing the hunger of hundreds of developers. Instead, we're stuck with the mediocre choices picked by our carrier overlords for us–and if you want something different, no soup for you!”
The half-steps the Commission took for phone equipment are disappointing by themselves, but are even more so in the larger context of what the FCC didn't do. By its own words, the FCC did not use the opportunity of the new spectrum to start from scratch and redefine the wireless world.
The Commission has no intention of creating new competition. It has no apparent interest in aiding the 250 million or so existing cellphone customers whose problems the FCC recognizes but declines to solve, as Skype asked the Commission to solve them many months ago by declaring that consumers had the right to use their own phones on any wireless service. Instead, the FCC was content to tease us with enchanting possibilities, and then give in to timidity.