We've got a serious problem with the way our wireless providers operate, and if we don't do something soon, we risk slipping behind the rest of the world in how we do business and how we innovate.
There are two major challenges. The first is that we don't have enough bandwidth in this country. Anyone who owns an iPhone on AT&T will happily tell you about it. Not only do we not have enough wireless bandwidth, but all of the companies who are trying to compete with one another want to compete with their own networks that they control — like making special roads that only certain cars can drive on.
The other issue is the lack of nationwide standards for the technology that cellphones use to transmit signals. AT&T and T-Mobile use a certain wireless standard, GSM, and Verizon and Sprint use another, CDMA. In theory, AT&T and T-Mobile's phones should work on each other's networks, and so should Verizon's and Sprint's. But the companies have purposely made them incompatible. Additionally, all of these services leave big portions of the country disconnected or poorly connected because they haven't sufficiently built out their networks.
His solution? "Washington should be aggressively regulating where and how private companies build wireless networks." Because when I think of what's wrong with the Internet, it's that it doesn't work enough like the federal government.
Topolsky isn't the first clever tech pundit to call for mandatory wireless network interoperability. Back in 2007, for example, Columbia law prof and tech-policy it-boy ("the voice of a generation"!) Tim Wu took a wide-eyed look at Apple's then-new-fangled iPhone and wondered why you couldn't just buy one and hook it up to any old mobile network you wanted. Wu's argument at the time was that carrier exclusivity was preventing innovation in the software and device markets.
In fact, as easily predicted, exclusivity and competition between carriers ended up spurring tremendous innovation in the wireless device sector. In the post-iPhone world, carriers quickly realized that there was a huge audience for fancy wireless gadgetry and customizable, consumer-friendly software and operating systems. With the iPhone locked into a single mobile network for the first few years of its life, carriers and device makers had to develop competing hardware—not just knock-offs, but products that people might actually want more than the iPhone. The result? More innovation, and more choice for consumers. Last year, the wireless industry counted more than 600 different devices available to attach to its networks. The shorter version: People wanted stuff. Companies made it for them. See how that works?
Hey, but what about those Europeans? Aren't they going to totally eat our wireless lunches? We have to compete, compete, compete with our international neighbors, and obviously that's going to require a whole lot of busybodying aggressive regulating from federal muckety mucks. Except that the U.S. is already the least concentrated wireless market in the OECD, is currently one of only two countries that has more than five wireless providers, and has substantially lower average per-minute wireless voice costs than Europe.
But guess what? Topolsky can probably go home smug and happy anyway. Because various local and federal bureaucrats already "aggressively regulate the where and how private companies build wireless networks." When mobile carriers want to build new cell towers to expand to new service areas, they have to navigate expensive, time-consuming local regulatory mazes. When wireless service providers want to expand their spectrum holdings—the virtual real estate required to expand speed, service, and capacity—they have incredibly limited options thanks to a slew of outdated federal rules regulating which entities are entitled to access wireless spectrum. And when one of those companies responds to those limits by turning to what is essentially the only remaining method of acquiring large amounts of new spectrum—buying a competing wireless carrier—the federal government attempts to block the acquisition by taking the company to court. But obviously the problem with the wireless industry is that the federal government just isn't. Doing. Enough.
Read "Internet Cop," my March 2011 feature on the Obama administration's multiyear quest to regulate the Internet.
