Congressional Hearing on Wireless Innovation and Consumer Protection
If you work in the Internet industry, you are familiar with the closest thing we have in America to a pure free market: countless competitors, zero barriers to entry, easy access to capital, and prices that drop so fast that sometimes we can’t find anything to do with the capital.
Most other industries are regulated to some extent, with both good and bad results. Take agriculture. Most people favor laws that make their food safe, but only Big Food and a few midwestern States love the Farm Bill. (If reading this in Europe, think Common Agricultural Policy.)
The cell phone market is unusual because it would not exist without enlightened regulation. Very early in the history of radio, people recognized that spectrum is scarce, a shared resource that requires some kind of collective oversight. The system they chose is that the people own it and the government parcels it up and leases it to private companies for different purposes: TV, radio, mobile phone service etc. (1)
The cell phone industry wouldn’t exist if smart regulators hadn’t carved out room for it in 1974. There are more than two carriers in the US because smart regulators made room for more in 1993, and banned the incumbents from the auction. But we are almost out of spectrum suitable for mobile phones.
Next year the government is selling off the electromagnetic equivalent of beachfront property – spectrum that happens to be perfect for cell phone service. It’s available because the government is taking it back from TV broadcasters who no longer need it. Because spectrum is so scarce, this may be the last chance we’ll get for a generation to increase competition in the cell phone market and to experiment with new ways of managing spectrum.
I’m one of those who believes that the mobile phone market ought to work more like the Internet market. I don’t have to ask Verizon DSL for permission to attach a computer to their network; why do I have to ask Verizon Wireless for permission to attach a phone to theirs? In the entirely new market for mobile applications and content, I don’t think that the law should protect companies as big as Verizon Wireless from competition with companies as small as Skydeck. Therefore I support some form of open access rules for the 700 MHz auction. I was honored to be invited to testify to Congress this week on the subject. My testimony is above; the entire hearing is archived here.
Why go to Congress? Because when it comes to mobile data, we don’t get to choose between regulations and no regulations. We can campaign for the regulations that we want or we can stay away from DC and let Verizon and AT&T write regulations for us.
It’s also because the Internet has changed the rules of debate. Ideas that were once discussed only in closed rooms we now debate online. We don’t just speak through canned quotes in press releases, we write blogs. If we’re prepared to say what we think on our blogs, then we ought to be prepared to go and say it in DC. And what we say in DC can now be heard around the world, because of sites like YouTube.
People in the Internet industry never understood the old rules, the game of politics that the telcos have played so well for over a hundred years. But we understand the new rules far better than they do. We should take advantage of that.
***
Full Disclosure: Skydeck believes that every company in the wireless data market would benefit from open access rules, so we support those principles as a company. But I did not testify on Skydeck’s behalf. Nothing that we are working on requires a change in the law, and it will be at least four years before a network gets built out and application developers benefit from this auction. We also reserve the right to speak through canned quotes in press releases in the future.
(1) New technologies like software-defined radio could in theory make much more efficient use of spectrum by allowing any transmitter-receiver pair to take up any unoccupied channel. But most engineers doubt that the technology is ready, and dismantling the current system would be like seizing all the property in Manhattan and redistributing it: unlikely.