European-Style Cellphones for Americans?
Americans may finally get a taste of Europe on their cellphones, after the Federal Communications Commission decided Tuesday to force some carriers to let consumers use any device they choose, rather than only the devices preselected by the company.
U.S. cell users have watched jealously as some Europeans and Asians seem to enjoy the most advanced wireless devices, which they typically buy at electronics stores and then separately sign up for service from one of several carriers. With rare exceptions, North American cell users buy a phone that works exclusively with one wireless company, such as Verizon or Sprint.
The FCC decided yesterday to experiment with governing the nation's radio spectrum, the hugely valuable broadcast rights that enable TV and radio stations, cell carriers, and other wireless devices to operate without interfering with one another. The commission was setting the rules to auction a chunk of the spectrum that's becoming available because TV stations are moving to more efficient, digital transmissions of HDTV and other programming.
The federal government expects to raise about $15 billion from the auction, which will take place before the end of January. Private analysts have said the government could get considerably more.
The FCC decided yesterday to force the buyer of a third of the spectrum to enable consumer choice in handsets. The rules were a response to demands made by a group led by Google, the Internet giant, which has a growing interest in making sure its services can be used on wireless gear. Google fears that traditional wireless carriers have too much control over what their customers can access over the Internet and will cut Google out of the action.
Yesterday's action was just a partial victory for Google and its backers, including public-interest groups concerned about maintaining "neutrality" for the Internet. Despite getting only some of what it wanted, Google said it may still bid on the third of the spectrum with open-access rules. "The FCC made real but incomplete progress," said Richard Whitt of Google in a call with reporters.
While Internet access was part of the debate, questions about Europe's system were prominent in the spectrum talks. Europeans, with their wide-open system, enjoy better services because of greater competition, argued Columbia University law Prof. Tim Wu, who likened the U.S. wireless system to land lines in the 1950s, when customers had to lease their phones from AT&T.
But CTIA, a group that represents U.S. wireless companies, responded with a paper last week contending that Europeans pay more for their service and have fewer handsets to choose from. Some analysts also say it's wrong to say Americans use advanced wireless services less frequently than Europeans.
The perception of falling behind, however, was apparently enough to prompt FCC commissioners to experiment with this auction. It could prove costly, as CTIA argues that the open-access rules will make that slice of spectrum less desirable. The FCC set a $4.6 billion floor for selling the spectrum with the added rules. But even at that price, "Google could waltz in and win that spectrum at what might be a fire sale," says Joe Farren of the CTIA.