Notes From the "iPhone" Hearing
July 13, 2007
Filed under Internet Openness & Standards
Yesterday I had the opportunity to attend a Subcommittee on Telecommunications and the Internet hearing titled "Wireless Innovation and Consumer Protection," which focused on whether rules to promote consumer choice in wireless devices and applications would benefit the nearly 240 million Americans who are wireless subscribers. While some of the lawmakers and witnesses at the hearing supported federal action, others maintained that market forces in the competitive space would serve consumers better than government regulation. Tagged by many as the "iPhone" hearing, in reference to the controversy over Apple's hot new product, the event kicked off with Chairman Ed Markey (D-MA.) criticizing AT&T's exclusive service plan for the device, which he called a "Hotel California" service. "You can check out any time you like, but you can never leave: you're stuck with your iPhone and you can't take it anywhere." In addition to consumer welfare, the hearing considered whether the current wireless marketplace structure stifles innovation by would-be entrepreneurs. The subcommittee discussed Skype's March petition to the FCC to extend the landmark 1968 Carterfone decision -- which opened up a competitive, innovative marketplace for telephonic devices -- to the wireless industry. Separately, public interest advocates -- including CDT, in recently filed comments -- are pressing the FCC to apply "open access" principles to new licenses that will be granted to the winners of the upcoming 700 MHz band spectrum auction. Columbia law professor Tim Wu and Skydeck CEO Jason Devitt testified that the four major domestic wireless carriers were, in Wu's words, "locking and blocking," or crippling wireless devices so their owners cannot use their full functionality or take them to other carriers, and preventing new applications and services from reaching the market. While CDT has not focused expressly on the wireless telephone market, we think it offers interesting parallels to the Internet neutrality debate. Yesterday's hearing offers a glimpse into a sphere very different from the broadband Internet industry: even in a market with some degree of competition, wireless operators don't always choose to provide the same sort of openness found on the Internet. CDT supports rules to ensure the Internet stays open to innovative applications and devices, so that the sorts of issues with which lawmakers wrestled yesterday never have to come up in the broadband context in the future.