Google, GooglePhone, 700 Mhz, OpenGardens, Innovation and carterphone

Synopsis:

The 700 Mhz spectrum discussions have a sense of Déjà vu .. with the Carterphone principle for landline networks. Historical evidence shows that it is just a matter of time before the networks will have to open up fully as we discuss below.

Background

Large telecoms companies like AT&T and Verizon control a major portion of the broadband market and also the wireless spectrum. Google is seeking to change the status quo by advocating that the 700 MhZ wireless spectrum recently vacated by analogue television stations be treated as ‘Open access’.

Open access, from Google’s standpoint, means four things which Google outlines in their blog.

1) Open applications: consumers should be able to download and utilize any software applications, content, or services they desire;

2) Open devices: consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;

3) Open services: third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and

4) Open networks: third parties (like internet service providers) should be able to interconnect at a technically feasible point in a 700 MHz licensee’s wireless network.

The carterphone principle

So far, Google has got agreement from the FCC about Open devices for 22Mhz of the 700 Mhz spectrum(A portion of the condition 2 above).

This is a step in the right direction since it leads to the Carterphone principle

(which opened up the landline networks many years ago).

In a nutshell, the Carterphone principle advocates that we don’t have to buy the landline phone from the network provider(specifically AT&T in case of that litigation). Prior to the carterphone regulation, customers were forced to buy the devices only from the network.

We take the benefits of the carterphone principles for granted today and we cannot imagine a world without these ideas

However, if we look back into history, we can see that devices like fax machines, modems, answering phones etc may not have been developed without such legislation which required the device to be network agnostic(i.e. any device can be connected to any network)

In that sense, from a historical perspective, the requirement for Open access does lead to innovation and benefits the customer.

Telecom companies do innovate – but that innovation is based on connectivity within their network as opposed to connectivity across networks. However, customers benefit from cross network connectivity and interoperability – hence the requirement for devices to be able to connect across networks.

Google

Google actually wanted all four conditions – especially open services(wholesale access) which would have opened up the door to competition from a whole raft of smaller vendors much like the dial up access in the early 90s.

They have ended up with open devices on a portion of the spectrum – only a fraction of what was asked for.

But a journey of a 1000 miles starts with one small step .. as the ancient Chinese proverb says ..

At this time, not much is know about a ‘Google phone’ – so it is not easy to tie these initiatives to specific objectives which Google may be trying to achieve – but the overall benefit to the customer is clear

Conclusion

So, as the creator of the OpenGardens blog, I support all of the four conditions especially because I believe that they benefit the consumer and lead to greater innovation based on the historical evidence of the Carterphone principle. Customers benefit from cross network connectivity and interoperability through the ability of devices to be able to connect across networks.

Comments

  1. George says:

    Great article. When do you see something like the carterphone principle actually being implemented within the wireless industry when companies like “the big 4″ control most of the market and AT&T is reconsolidating?

  2. Dag Holmboe says:

    Good going, Ajit. I have your book “Mobile web 2.0″ and I often read your blog.
    I agree with you that the current system of buying a phone that is tied directly to a carrier and a wireless network is old-business and needs to change. I foresee the day when I can buy a mobile phone and be able to plug it in (eg configure the phone) to any wireless network. I will still need to sign a contract (does not need to be 1 or 2 year contract) with a carrier in order to use their network. I think the idea is that the wireless business model becomes the same as the wired business model – it shouldn’t be harder than that. Obviously, making it world-wide would be even better but we are making strides in that direction as well.
    open = good;
    closed != good;
    Dag

  3. Ajit Jaokar says:

    Thanks George, Dag. I think this is a good first step – I think considering historical precendence, open is inevitable. We dont think of buying devices from networks for landlines any more! i.e. its long gone and we would never dream of going back. So, the same applies here. Thanks for your comments. kind rgds Ajit

  4. George says:

    Ajit,
    It appears that, currently, consumers go to where the phones are. They are attracted by the phone first and the network and plan are secondary. This seems to be how control of the consumer could be removed from the MNOs. Offer a devices, middleware and applications but press from the bottom up on the MNOs for open infrastructure?

  5. Ajit Jaokar says:

    Can you elaborate on this George? many thanks rgds Ajit
    his seems to be how control of the consumer could be removed from the MNOs. Offer a devices, middleware and applications but press from the bottom up on the MNOs for open infrastructure?