Do wireless tubes need to be neutral too?

by on February 14, 2007 · 6 comments

I’ve got a write-up of Tim Wu’s paper over at Ars. Most of it’s a summary of Wu’s paper, but I do a bit of policy analysis near the end:

Surprisingly, Wu does not mention one reform that could alleviate what he identifies as the biggest barrier to entry in the wireless market: the high cost of spectrum. Various scholars have proposed that more spectrum be auctioned off to private firms for use in next-generation wireless services. That would make it feasible for more firms to enter the wireless marketplace, providing much-needed competition. Wu himself notes that the smallest of the national carriers, T-Mobile, also has the least restrictive policies. It is likely that if enough spectrum were made available to allow additional carriers to build nationwide networks, those carriers would tend to follow T-Mobile’s lead and build more open networks than the largest incumbents.

Wu also does not spend much time considering the feasibility of enforcing open access rules on wireless carriers. Although Carterfone is widely regarded as a success, some more recent attempts by the FCC to force incumbents to open their networks to competition have not been so successful. The FCC unsuccessfully attempted to force the Baby Bells to share their DSL lines with competitors during the Clinton administration, sparking nearly a decade of litigation that only concluded with Supreme Court’s 2005 Brand X decision. And the cable industry is fiercely resisting the FCC’s attempts to open up the market for cable boxes, a process that has has been raging for close to a decade with no end in sight. It is likely that the wireless industry would be equally resistent to any effort to forcibly open its network to new entrants.

With the debate over network neutrality regulations of wireline broadband providers sucking all the oxygen out of the room, it’s unlikely that Wu’s proposals will have an impact on the telecom debate during this session of Congress. But as wireless technologies become ever more ubiquitous, questions about whether and how to regulate the wireless industry will only become more frequent and more contentious.

I think the CableCard analogy would be particularly worth exploring in more detail. Wu actually cites it as a possible model for interoperability done right, but my reading of the situation is that so far, at least, it’s been less than a raging success. The first generation CableCard spec had an extremely limited feature set, and even more limited consumer interest. Approximately zero cable customers have actually requested CableCards from their cable companies. The FCC’s “integration ban” goes into effect this summer, which could enlarge the market for third-party CableCARD devices, but the jury is definitely still out, and it’s rather premature to be hailing it as a success. And remember that Congress first ordered the FCC to open up the set-top box market a decade ago.

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