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Do Wireless Subscribers Really Want Mobile Net Neutrality?

Mobile VoIP provider Truphone this week came out against carriers blocking VoIP functionality on mobile phones. The company went so far as to claim that this act threatens mobile net neutrality. But is the mobile Web really a neutral network?

Truphone spoke out against moves by U.K. carriers Vodafone and Orange that blocked wireless VoIP functionality on the carrier branded version of the Nokia N95 smartphone.

This isn't the first time Orange and Vodafone have blocked mobile VoIP. According to a report from Red Herring, the two carriers are blocking other VoIP services too:

U.K. mobile phone network operators Vodafone and Orange have started blocking customers from using low-cost Internet telephony services such as Skype over their cellular phone networks, the latest sign that carriers are increasingly wary about the threat posed by third-party VoIP upstarts.

In a post earlier this week on Over The Air, my colleague Elena Malykhina argued that it's time to speak out against moves by carriers to block functions on cell phones, including VoIP access.

I agree with Elena and Truphone in principle, but pushing for a truly neutral mobile Web will require a few things. First, it will likely spell the end of carrier dominance in the wireless space. And frankly, the industry isn't currently set up for that. In the U.S., carriers spend a lot of money acquiring spectrum and the way that spectrum is managed -- both by the carriers and the FCC -- doesn't allow for a truly neutral mobile data experience. Why? Regulations, that's why. The FCC regulates what the carriers can do with their spectrum. This does apply to content, too. In practice, we haven't seen the FCC crack down on what happens on most users' mobile phones, but in theory, they could.

This is one of the reasons U.S. carriers are so reluctant to allow services like adult content or gambling over their networks. In order to open the mobile Web to the same degree as the wireline Web, regulatory reform will be required.

On top of that, carriers subsidize handsets, especially in the U.S. market. If subscribers want to insist that their cell phones be able to do everything they want, they'll have to pay full price for the devices. As Milton Friedman used to point out, there is no such thing as a free lunch (or cell phone, in this case). And since most Americans seem attached to cheap handsets, I don't see this changing. I suspect that for most users the tradeoff of a cheaper cell phone outweighs the prospects of unlimited applications -- especially since we know most users don't do use the Web on their phones anyway.

In theory, I too want a truly open and neutral mobile Web. But there will have to a lot of changes -- both to the regulatory environment and to carrier business models -- to make this happen. Without these changes, I don't see the mobile Web being open or neutral anytime soon.

What do you think? Can we have a neutral mobile Web in the U.S. with the current regulatory and business environment? Or will significant changes have to happen first?

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