Net Neutrality And The Cellular Networks

While senators in Washington mull over issues of net neutrality as they pertain to the terrestrial cable and telco networks, eBay VoIP provider Skype has asked the FCC to open up the cellular networks to outside applications and devices. While obviously self serving, the petition stirs up the debate on just what kind of role consumer choice should play on the public airwaves.

Specifically, Skype is asking the FCC to apply the Carterphone ruling of 1968 to the cellular communications industry of today. Prior to that decision, AT&T determined what type of device could be hooked up to their network, typically a phone device that was sold exclusively by them.

As a result of the Carterphone ruling, the phone company's control of the network stopped at the telephone jack. Consumers could choose from an onslaught of new devices and technologies entering the market. From answering machines, to fax machines, and eventually the modem - a major factor in the Internet boom of the nineties.

Since the FCC began auctioning off the public radio spectrum in the 1990s, the growth of the cell phone industry has mushroomed, changing the very face of telecommunications and the way people communicate worldwide. New technologies flourished, and today, the cellular networks can only carry voice, but are themselves an extension of the Internet.

Developers and device manufacturers have come up with mobile applications such as text messaging, email, full blown internet browsing, music and video down and uploading, mobile office applications, VoIP and more. The new generation of cell phones are now called smart phones, and can do just about anything your computer can do. Handsets are built with multiple radios that can access cellular, WiFi and Bluetooth frequencies, and can seamlessly switch a call from a cellular network to the much cheaper Internet via VoIP over a WiFi connection.

U.S. Cell Phone Denial of Services

While many of these applications and capabilities are available on overseas networks, in the US it's a different story. As cited by Dr. Tim Wu in his paper Wireless Net Neutrality, "...the cellular phones widely available in the United States are just a small fraction of the phones available in the world."

As it stands today in the US, the cellular industry has boiled down to four major carriers based on two different technologies, and they all guard their networks jealously. Verizon and Sprint use the CDMA standard (Code Division Multiple Access), and AT&T (formerly Cingular Wireless) and T-Mobile employ the GSM standard (Global System Mobile), which currently enjoys about 73% world market share.

As with AT&T before Carterphone, all of the carriers sell their own phones, and block access to their networks from the others to varying degrees, using different methods. The CDMA phones use an Electronic Serial Number (ESN) that is registered by the carrier network. Verizon will not allow a phone on their network that is not sold by them. Sprint will allow you to register a non Sprint device, but strongly discourages it and offers no technical support for such phones.

GSM networks use a SIM card, a chip that contains subscriber information and is designed to allow phones to switch networks by inserting the SIM card of the appropriate carrier. Phones sold by AT&T and T-Mobile come with the SIM card disabled, effectively locking them to the network. It is possible, though not easy, to unlock these phones and is also legal to do so in the United States. Not wanting to push the envelope too much, AT&T and T-Mobile allow the unlocking of their phones after an initial period of ownership.

In an attempt to keep users on their networks, and thus revenues up, the cellcos have crippled applications that others enjoy world wide. The very popular activities of downloading music, pictures, and video are indeed available in the US cellular market, but try to email or upload to a location not approved, and you'll likely find your efforts blocked. You can, for an additional fee of course, upload and share your media to web sites approved by the carrier.

Bluetooth wireless technology lets devices communicate with each other over a low band short range radio frequency. Bluetooth enabled printers, computers, mobile phones and wireless headsets, allow users to up and download media, send files and photos to a printer, and talk on your cell phone hands free. Yet US carriers have at some time or another crippled many of the features available through Bluetooth technology.

Probably the most disruptive technology for the cellular industry is WiFi. The 802.11b/g standard allows for a broadband wireless connection suitable for email, web browsing, inter device communication, and the dreaded, extremely cheap, voice over Internet Protocol. Internet telephony can bypass the cellular networks by sending voice directly over the Internet through a landline or a WiFi connection.

Device manufacturers can and do incorporate WiFi technology into their handsets, but the cellular carriers in the US have resisted tooth and nail by crippling WiFi in their devices, and demanding that manufacturers make WiFi-less versions of their phones for the American market. While it is technologically possible to load third party applications such as Skype onto a mobile phone, to do so on a WiFi capable cell phone would threaten the very business model of the cellcos.

Today, you will find very few cell phones in America that are WiFi capable. Just now, cell phones are becoming available in Europe that can operate on the cellular network as well as corporate wireless LANs, integrating into the company IP/PBX telephony system.

In conjunction with AT&T, Apple announced recently that its premier iPhone coming out in June will have WiFi functionality, but to what extent is yet to be seen. Unfortunately for Skype and others, there will be no third party applications allowed on the iPhone.

The major carriers in the US also offer broadband Internet access over their networks, mainly through an antenna placed on a PC card plugged into a laptop. Cellular broadband access is in direct competition with the WiFi hotspots popping up in airports, hotels, corporate LANS, and other public facilities. The developing 802.16 WiMax technology also threatens to add the Metropolitan LAN into the competitive mix.

While WiFi is considerably faster than the cellular networks, it is mainly designed for short range networks and hot spots must be searched out. The cellular networks, on the other hand, can offer broadband access wherever their network reaches.

The U.S. carriers restrict what type of services, applications, and features are allowed on their network, and will terminate and charge users suspected of violating their contractual agreement. Basically, broadband services allow only email, browsing, and corporate intranet access. Downloading of music and video from unauthorized sites (iTunes and YouTube for example) and P2P file sharing is prohibited, and enforced in some cases by placing strict band width limitations on users.

How the Net Neutrality Movement Pertains to the Cellular Industry

If the early development of the Internet can be compared to the American Wild West, then the rise of the U.S. cellular industry can be likened to Stalin's Soviet Union. Carrier networks rule developers, device manufactures, and consumers with an iron fist, allowing only the services and features of their choice on their networks.

To be sure, there are some major differences between the Internet and cellular networks. U.S. carriers have spent billions for their share of the wireless spectrum, and maintain the right to determine what features are available to the consumer. Corporate executives contend that there is fierce competition in the cellular industry that should be the determining factor in consumer choice, as opposed to governmental regulation.

Whereas the early days of the Internet witnessed massive technological innovation from developers and manufacturers due to its inherent openness, American cellular networks were from the beginning proprietary and self serving.

The Net Neutrality concept sprung from a grass roots movement when cable and telco executives started talking about charging high bandwidth users such as Google, Vonage, and YouTube, for using their pipes. The fear that these companies could thus control what content would be available to consumers threatened the very foundation of a free and open Internet.

The cellular phone companies on the other hand, were from their inception businesses operating in a free enterprise society, and as such, have every right to dictate what services to offer. Absent any public outcry from consumers for the right to choose, regulation of the industry would seem to be anything but a foregone conclusion.

That said, the implementation of the Carterphone principals would seem to be a logical step to prevent monopoly like tactics from an industry that is entrusted with the public airwaves. The other players in the telecommunication industry, including the cable companies, must and do abide by the ruling.

What is puzzling is that cellular companies could actually open up more revenue streams by offering services that consumers would gladly pay extra for. Downloading music and video from iTunes for example could be charged by bandwidth usage, and cellcos could implement calling plans that would include minutes used to make calls over the Internet.

Of particular interest to the business community is the concept of Fixed Mobile Convergence, having one phone with one phone number that can traverse cellular and WiFi networks, allowing calls to be made through VoIP and traditional landlines, in addition to the cellular air waves.

Device manufacturers like Nokia already make handsets that integrate with corporate IP/PBX systems from Cisco, Avaya, Siemens and others, and will route calls over the best network available. While much progress in this technology is being made in Europe and other regions, the American market remains stifling for developers and manufacturers both.

It will be interesting to see how the Skype petition plays out with the FCC. Applying the Carterphone ruling could conceivably open up the floodgates for new development and technological innovation. If not, the U.S. cell phone industry will have to depend on sluggish market forces to catch up with the rest of the world.