The FCC is challenging the foundation of the wireless industry business model. Exclusivity agreements and billing practices serve the capitalist free market interests of the wireless providers, but conflict with what is in interest of public good and providing a stable infrastructure.
The wireless industry was already put on notice recently when Apple rejected the Google Voice app for the iPhone. That was not the first issue that woke up the sleeping giant affectionately known as the FCC, but it may have been the straw that broke the proverbial camel’s back. There are also potential FTC issues regarding the relationships between companies like Apple and Google which are both partners and competitors depending on the day and the market you look at.
One of the biggest issues being investigated by the FCC is the concept of exclusivity. FCC Chair Julius Genachowski committed during his confirmation hearings to explore the ethics of such arrangements and whether or not exclusivity is unfair to consumers. For example, the Apple iPhone has been a tremendous success, but requires that you switch to AT&T as your wireless provider to use it (unless you work some unlocking magic called ‘jailbreaking’ which also violates the warranty). Consumers in areas not serviced by AT&T are simply unable to use the iPhone at all.
It can be argued that nobody is ‘entitled’ to an iPhone. Granted. But, they may be at least entitled to wireless service and the ability to choose their provider and their mobile phone. The airwaves and the wireless frequency spectrum more or less belong to everyone. The FCC auctions off the rights to use the wireless bandwidth and the airwaves are part of the infrastructure that provides the backbone for commerce and services for the nation.
Five or ten years ago a mobile phone was a luxury reserved for those with frivolous discretionary income. The mobile phone has become virtually indispensible now and the FCC has an obligation to ensure that the wireless providers are playing fair and that the best interests of consumers and the nation are being met.
Like banking and finance, and like the healthcare industry, the wireless industry has been more or less left to police itself in the grand experiment known as free market capitalism. Free market capitalism is great when it works, but when the boards of directors get greedy and serve their own interests and the average consumer no longer has enough sway to affect the market, we rely on entities like the FCC and the FTC to reign the free market in for the good of the public interest.
Tony Bradley is an information security and unified communications expert with more than a decade of enterprise IT experience. He tweets as @PCSecurityNews and provides tips, advice and reviews on information security and unified communications technologies on his site at tonybradley.com.
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