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2/15/2007
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Law Professor Calls For End To Wireless Carrier Abuses

Columbia law professor Tim Wu says consumers are fed up with misguided, and in some cases, outrageous and perhaps illegal policies.

The mobile wireless industry in the United States, despite 200 million subscribers and more than $100 billion in annual revenue, isn't exactly popular with some customers. In 2005, some 31,671 complaints about mobile phone services were filed with U.S. Better Business Bureaus, more than any other industry.

And customer service may be the least of the wireless industry's problems.

In a report on the wireless industry released on Thursday, Columbia law professor Tim Wu argues that domineering wireless carriers are hindering innovation, to the detriment of consumers.

In the wired world, Wu says, the policies of mobile carriers "would, in some cases, be considered simply misguided, and in other cases be considered outrageous and perhaps illegal."

Wu sees four major issues: Carrier control of wireless device connectivity over wireless spectrum that is owned by the public; carrier-enforced feature crippling or omission; undisclosed wireless broadband limitations that violate basic network neutrality rules; and burdensome application development controls imposed by carriers.

Apple's upcoming iPhone is as an example of unwarranted network connectivity prohibitions, Wu points out.

"The iPhone is beautiful and innovative in its design," he says in the report. "But it also came with many surprising limitations. Most importantly, to the surprise of many, the iPhone only works on the network of a single carrier, AT&T Wireless. ...The question is why? Why can't you just buy a cell phone and use it on any network, like a normal phone?"

It's a fair question, though the courts answered it for AT&T's landline network decades ago. AT&T used to have a rule that disallowed any device not supplied by AT&T to be connected to its network. Challenged by vendors like Hush-A-Phone and Carterfone, the U.S. courts and the Federal Communications Commission eventually rejected AT&T's position that it needed to control all the equipment on its network to assure quality of service.

Yet today, wireless carriers operate in the same way. Verizon, Wu points out, only allows approved devices on its network. "This effectively makes Verizon Wireless the gatekeeper of market entry for telephones on their network, like the AT&T of old," he says.

The paper goes on to cite a litany of anti-consumer practices.

Wu makes four major recommendations in his paper: apply the Carterfone rules, which require telephone equipment interoperability, to the wireless industry; adopt the basic network neutrality rules that apply to cable and DSL service, which give consumers the right to run the applications they choose; require full disclosure of wireless plan rates and limitations, such as bandwidth usage caps; and abandon the "walled garden" approach to application development.

The wireless industry may not embrace these recommendations willingly. If so, regulators will have to push hard for change because in a few years unregulated wireless networks may become pervasive enough. Disrespected consumers will then be able to completely cancel their landlines and their mobile phone service for unfettered Wi-Fi voice-over-IP phones.

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