French Carterfone may halt L’iPhone

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french-carterfone.jpgI love my iPhone. Despite what others might say, it is the most innovative mobile phone in a decade. I also think innovators should be rewarded, which is why I’m fine with the iPhone being locked to AT&T’s network. As a result, Apple gets a cut of my (and every other iPhone owner’s) wireless bill.

France might be left behind when it comes to this innovation, however. That country has laws similar to the wireless Carterfone rules Tim Wu, Skype, and others have advocated for the U.S. Locked phones in France must be unlocked by the carrier upon user request, and wireless carriers must also sell unlocked versions of their mobile phones. As a result, Apple is considering keeping the iPhones off French shelves indefinitely.

To me it’s clear that forced access laws limit innovation. I think folks who propose such rules want to have their cake and eat it, too. That is, they want the innovation that comes from entrepreneurs acting in a free market (and often fueled by exclusive deals such as the one between Apple and AT&T), and they also want the forced openness of networks. They think that the latter will have no impact on the former; that innovators will innovate regardless of the incentives. The iPhone snag in France, however, shows that incentives do matter.

Oct 9, 2007 | Comment | Tags: , ,

Cartefone for wireless?

Tim Wu will be presenting his paper “Wireless Net Neutrality” at an FTC workshop on network access tomorrow. (BTW: The workshop is free and open to the public.) Basically he’s arguing for Carterfone to be applied to the cell phone industry. The Washington Post has a write-up of the ideas behind the paper and reaction from both sides of the debate.

Until federal regulators issued a landmark ruling in 1968, Americans could not own the telephones in their homes, nor attach answering machines or other devices to them. Now, a growing number of academics and consumer activists say it’s time to deliver a similar groundbreaking jolt to the cellphone industry, possibly triggering a new round of customer options and technical innovations to rival the one that produced faxes, modems and the Internet.

Wireless carriers, which limit what customers may do with their phones, say the move is unnecessary and potentially harmful. But in articles, blogs and speeches, a number of researchers are asking why the companies are allowed to force consumers to buy new handsets when they change carriers, pay a specified carrier to transfer photos from a camera phone, or download ring tones or music from one provider only.

Carterfone was a great decision when it applied to Ma Bell, the quintessential monopoly, and wouldn’t compute for today’s wireless carriers. True, cell phones are locked (except when they’re not, as he article points out, because carriers will often unlock them for you when your contract expires). The one thing the article doesn’t mentionis that cell phones are also subsidized. You can always buy an unlocked phone for a premium. I would love to see a greater market in unlocked phones, but if there’s no demand from consumers, I’ll just have to wait along with the proponents of regulation. Question: Unlocked phones are the norm in Asia and Europe. How are they priced there? How do service plan prices compare to U.S.?

Feb 12, 2007 | Comment | Tags: , ,

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