I first realized in 2004 that Asian mobile networks and services were leaps and bounds ahead of our own, especially in Korea and Japan. Even in China, where I was, it was incredibly simple to switch between mobile providers. A friend of mine recently returned to California from Korea and felt that she was in a third-world country because she couldn’t watch TV on her American cellphone. I’ve heard before the explanation that it is easier for cellular companies to profitably deliver high-speed cellular service in areas of extremely high population density like Tokyo or Seoul, but that argument should not matter in places like NYC, which is as dense and rich as anywhere else, or in Silicon Valley, the laboratory for many communications advances.
Walt Mossberg’s Free My Phone article has gone a long way in answering for me the longstanding question of why the U.S. is “the laughingstock of the mobile-technology world, just as the cellphone is morphing into a powerful hand-held computer.” This writeup falls into the category of articles that everyone is glad someone wrote because it successfully provides a unifying theory of why something is the way it is. The heart of why America has third-world cellular service is that the mobile carriers control the entire ecosystem of services and products. Verizon and AT&T and Sprint et al control what sort of phone you can use, how often you can change to a competing service, and how much you have to pay for almost every service you use on your phone – all of that on top of the only REAL service they provide, which is access to their voice and data networks.
Imagine if your internet provider also controlled what kind of CPU you could use, what kind of OS, network card, keyboard, mouse. They would effectively control everything “downstream” and, assuming there are three big ISPs, they could collude to spend less on improving the speed of their networks and focus on squeezing the maximum ROI out of their existing infrastructures. That’s essentially what cellular providers do, and that explains why we pay a lot of money for slow cellular networks with a minimal set of services. Crap!
The Wired writer who wrote 10 Reasons to Hate Cellphone Carriers must have read Mossberg’s article. All of his serious points fit into why these carriers constrain the cellular ecosystem, and he casts a few additional stones, such as the fact that carriers lock their locks and cripple their handsets to restrict what users can do with their phones. Verizon or Sprint or AT&T will actually take a RAZR manufactured by Motorola and lock out pieces of functionality. Again, can you imagine your ISP taking a screwdriver to your personal computer to constrain what you do on their internet network, or your state modding your car once you cross a state border? Our PC industry continues to fulfill Moore’s Law because it is a market driven by entrepreneurial capitalism of the kind that the mobile industry lacks.
This kind of top-down market control also hurts the development of mobile applications. Most mobile applications startups I’m aware of rely on deals with carriers. These app providers need to ingratiate themselves to this small pond of mobile carriers, who then call the shots on how much to charge for each application download, and even then these application providers gain access to only a percentage of the mobile consumer market (since each carrier effectively “owns” its customers).
It will be interesting to watch Sprint in the coming years with them developing a WiMax network and unlocking their phones. Assuming they implement successfully, guts should be rewarded.
