Tim Wu: Current wireless telecom policies stifle innovation of wireless software and devices

Tim Wu has written an important paper about wireless net neutrality and how current wireless telecom policies stifle innovation and industry growth. He persuasively argues that current wireless telecom control over their customers and networks harms their customers and the overall growth of the industry. Wireless software and hardware innovation are particularly hard hit. Here is a short excerpt -- note point 4 describing the difficulties in introducing innovative wireless software:

This report finds a mixed picture. The wireless industry, over the last decade, has succeeded in bringing wireless telephony at competitive prices to the American public. Yet at the same time we also find the wireless carriers aggressively controlling product design and innovation in the equipment and application markets, to the detriment of consumers. Their policies, in the wired world, would be considered outrageous, in some cases illegal, and in some cases simply misguided.

Four areas warrant particular attention:

1. Network Attachments. Carriers exercise excessive control over what devices may be used on the public’s wireless spectrum. The carriers place strong controls over “foreign attachments,” like the AT&T of the 1950s. These controls continue to affect the innovation and development of new devices for wireless networks.

2. Product Design and Feature Crippling. By controlling entry, carriers are in a position to exercise strong control over the design of mobile equipment. They have used that power to force equipment developers to omit or cripple many consumer-friendly features, and also forced manufacturers to include technologies, like “walled garden” internet access, that neither equipment developers nor consumers want. Finally, through under-disclosed “phone-locking,” the U.S. carriers disable the ability of phones to work on more than one network. A list of features that carriers have blocked, crippled, modified or made difficult to use, at one time or another include:

*    Call timers on telephones
*    WiFi technology
*    Bluetooth technology
*    GPS Services
*    Advanced SMS services
*    Internet Browsers
*    Easy Photo file transfer capabilities
*    Easy Sound file transfer capabilities
*    Email clients
*    SIM Card Mobility

3. Discriminatory Broadband Services – In recent years, under the banner of “3G,” carriers have begun to offer wireless broadband services that compete with WiFi services and may competee with cable and DSL broadband services. However, the services are offered pursuant to usage restrictions that violate basic network neutrality rules, and pursuant to undisclosed bandwidth limits.

Most striking is Verizon Wireless, which prominently advertises “unlimited” data services. However it and other carriers offer broadband service pursuant to both bandwidth limits, and contractual limits that bar routine uses of the internet, including bans on downloading music from legitimate sites like iTunes, the use of Voice over IP, and on the use of sites like YouTube.

4. Application Stall – Mobile application development is by nature technically challenging. However, the carriers have not helped. They have imposed excessive burdens and conditions on application entry in the wireless application market, stalling what might otherwise be a powerful input into the U.S. economy. In the words of one developer, “there is really no way to write applications for these things.” The mobile application environment is today, in the words of one developer, “a tarpit of misery, pain and destruction.”