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Getting In
Sep 1, 2007 12:00 PM
, BRIAN QUINTON WEBSIGHT
If you have any doubts about how thoroughly geeky I can be — and believe me, I can provide testimonials from family and friends — please consider the nerd quotient of my summer beach reading. Jill Jonnes' “Conquering Gotham” describes the Pennsylvania Railroad's effort to get direct access to the Manhattan market in the early 1900s by building rail tunnels under the Hudson and East Rivers. Before that, the only railroad that could bring passengers into the city was the New York Central, which came down the east shore of the Hudson and crossed the Harlem River by bridge. New York-bound travelers on every other line had to disembark in Jersey City and cross the Hudson by ferry — dangerous in winter, and expensive year-round for the railroads. The New York Central's privileged access was a choke hold on traffic into the nation's biggest city. Its corporate arrogance was conveyed in the most famous quote attributed to CEO William Henry Vanderbilt: “Let the public be damned.” The tunnels were built, of course, with no help from Vanderbilt. They were a feat of engineering genius, but also one that required political will and a determination to buck a system that was ultimately bad for everyone's business. By coincidence, as I was doing my seaside-wonk thing, a similar walled-garden demolition was being mounted in the wireless industry. In July Google said it would take part in the upcoming auction of a large chunk of U.S. wireless spectrum — if the Federal Communications Commission required the winner to open those airwaves to all devices and to competing wireless providers. This is good low-frequency spectrum that could be used for both voice calls and surfing the Internet from a mobile phone. It's probably the last big slice of the airwaves to be sold for a while, and Google maintains its sale is the last chance to unlock the mobile channel's potential. For consumers, the change would mean being able to use whatever device they wanted on a network and to download whatever applications they wanted to that device. This isn't the case right now. Ninety-five percent of cell phones in this country are sold by the carriers themselves and are restricted to their networks. In Asia “unlocked” mobile phones constitute 90% of sales; in Europe it's 70%. In fact, because of the way wireless networks have grown up in the United States, even a mobile phone model that's accepted by two carriers can't be ported. Carriers also wield considerable control over the features their users can access, dictating, for example, which e-mail and search capabilities will be accessible on their “deck” or start page. They can get phone manufacturers to edit their designs and even disable features such as Bluetooth or WiFi. Manufacturers play along because carriers subsidize the cost of their phones. The vaunted Apple iPhone has yet to circumvent this closed system. Right now it's only usable over AT&T's network. If other major carriers open their networks to the iPhone, they may try to alter it so that it only works over their system. Without fair, full “interoperation” agreements, even a revolutionary device like the iPhone could get bogged down in the mobile mud and become a toy for early adopters. The broader market won't cough up $600 (with a two-year contract and a hefty termination fee) for a phone that becomes a touch-screen doorstop if they try to switch providers. The carriers say they need to control which phones run what apps over their networks because subscribers want high voice and data quality and virus protection. That's true; we just don't want to sign away our freedom of choice to get them. I don't want Chinese antifreeze in my toothpaste, but that doesn't mean I want the Food and Drug Administration to cut the market back to four approved brands. At press time, the FCC says it will go for the open device/open application requirements but stop short of reselling the spectrum to competitors. That's better than the status quo, but there's a chance that the carriers will refuse to bid under the open-access rules. In that case, another auction will be held without conditions. As for Google, it's still deciding whether it'll bid even without the wholesaling requirement. Google might then resell that spectrum to smaller, more nimble wireless companies that presumably are agreeable to its open-access stance. The company also has struck a deal with Sprint to run on that carrier's upcoming WiMax network, designed to spread wireless connectivity to entire cities with just a few cell towers. And The Wall Street Journal reports sightings of a Google phone prototype. When you're determined to break through to daylight, it helps to dig a lot of different tunnels. NL
For the latest on search engine marketing, subscribe to SearchLine, a weekly newsletter by Brian Quinton, at www.directmag.com/newsletters. |
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