The xPhone
It’s not complicated, it’s not expensive, and there’s an obvious market for it. So why doesn’t the xPhone exist?
Imagine a mobile phone that worked across every network in the US: a phone that allowed you to make a call from anywhere in America, so long as you could get a signal from at least one carrier. Let’s call it the xPhone.
It’s not hard to build an xPhone. Most new handsets support multiple wireless standards and frequency bands: 2G and 3G versions of GSM or CDMA, Wi-Fi, Bluetooth, GPS, FM radio, soon TV. Now that the old analog and TDMA networks have been decommissioned, to deliver the widest possible voice coverage the xPhone would only need to support the GSM and CDMA bands, and maybe iDEN. It would be quite cheap.
Who would buy the xPhone? Anyone who cares about coverage above all else. That means salespeople and executives and truck drivers and other people who travel a lot on business, but more importantly it means first responders: doctors, firefighters, law enforcement. The xPhone could save lives.
What do they do today? Most of them do without. A few who can afford it carry multiple phones.
Wouldn’t you need a contract with every carrier in America to use the xPhone? No. You could have a contract with one and pay roaming fees across the others, or you could have a prepaid relationship with all of them and just pay for the minutes you used on each. (New businesses would spring up just to manage those relationships for you.)
It’s not complicated, it’s not expensive, and there’s an obvious market for it. So why doesn’t the xPhone exist?
Because it is not possible to launch the xPhone without getting permission from all of the US carriers.
AT&T and T-Mobile let you use any non-harmful GSM device on their networks, so long as you don’t ask for any technical support. Verizon will let you bring your own CDMA phone to their network, but only if it’s a model that they have approved. Sprint won’t let you activate a phone on their network unless it was originally sold by them (you can use someone else’s old Sprint phone on the Sprint network, but that’s it). There are 90 smaller carriers and MVNOs in America, each with their own policies, and those policies can change at any time.
You could use the xPhone on AT&T and T-Mobile, but it wouldn’t offer any advantages over their own phones. Let’s say Verizon approved it. That starts to get interesting, although there would still be some places in America where you’d be better off with a Sprint or Alltel phone. But Verizon would not approve the xPhone, because Verizon’s entire marketing strategy is based around the quality and coverage of their network. By definition, the xPhone would commoditize that network. (1)
We don’t have this problem with landline networks. It doesn’t matter which telco you’re with or what technology they use behind the phone jack, a phone is a phone. Thanks to a series of decisions by the FCC and the courts known as the Carterfone rules and the standard interfaces that telcos were forced to adopt as a result, nobody needs permission to launch a landline phone.
Wireless carriers claim that their market is so competitive that regulations like Carterfone are unnecessary. Yes, they say, you have to ask permission to launch a mobile phone, but if one carrier says no you can always go to a competitor.
But this won’t work for the xPhone, because all the carriers have to say yes.
Skydeck is not building the xPhone. But we’d buy one if it existed. And if companies didn’t have to ask permission to innovate in the wireless industry, we believe that many other useful products would exist too. That’s why we support the adoption of Carterfone rules for the entire wireless industry, and at the very least open access rules for the upcoming 700 MHz auction. If you agree, sign the MoveOn petition.
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1. Verizon has launched several dual-mode CDMA/GSM handsets. But they are for customers who travel often to countries where there are no CDMA networks. The phones are locked so that you can’t put in a SIM card from AT&T or T-Mobile, and for good measure you have to turn the phone off to switch from CDMA to GSM. The xPhone would support all US bands and choose the network and frequency that offered the best coverage at any given time, without you having to think about it.
For more information on these issues, read Professor Tim Wu’s paper on cellular Carterfone.