At its meeting tomorrow, the FCC is expected to vote to commence a broad review of America's wireless sector. This is a terrific opportunity for the new Commission to take a fresh, comprehensive and clear-eyed look at a wide range of issues with high-stakes implications for our nation's economy, innovation community, and consumers.
The discussion is off to a good start with Chairman Julius Genachowski's recent comments that wireless is "an extraordinary opportunity for the country in terms of unleashing a new wave of innovation, a new wave of investment, jobs created here in the U.S. and bringing competition to the full communications marketplace."
As the FCC convenes to determine the range of issues they will explore, here are a few suggestions that go deeper than the headlines of the moment:
If you build it, will they come? Maybe. Here's a timely warning for anyone who wants to increase federal regulatory involvement in wireless: For all the talk about how Americans are desperate for more bandwidth, the realities of how we deliver it in a robust and sustainable way are pretty complex.
Sure, 4G wireless will blossom next year and go national by 2011. But is there a sure path for mobile innovators, companies, and entrepreneurs to recoup their investment and make money? Not necessarily. There's a lot of excitement around Clearwire as it rolls out WiMax nationwide. But a recent Merrill Lynch report, noting credit market constraints and the sour economy, gave this company a target stock price of just $3 a share, less than half its current price.
The dilemma: With billions of dollars at stake, competition rampant, and consumer habits changing faster than technology, there's hardly a guarantee of success. Will future policies help or hurt?
Apps, apps everywhere. "There are going to be more smartphone launches in the next couple of months than we've ever seen before," according to Gartner analyst Ken Dulaney, quoted in the current Fortune cover story on wireless. But the real impact isn't only in the hardware, it's also with wireless applications.
As Fortune's Jessi Hempel correctly reports, "consumer's expectations about what smartphones should provide are also evolving rapidly. Mobile phone users increasingly want to access the web more than they want to make calls. They're gravitating toward Tweeting rather than long e-mails. And they want applications, those programs that let you check the weather, play games, and even balance your checkbook."
Yes, Apple has the apps lead now, but watch for this competition to get a lot tougher, as developers quickly embrace new smartphone software.
Phones of the future. This summer, we saw a non-stop parade of new PDAs, each with their own "wow" factors. But here's why even these breakthroughs will be significantly outdated in the coming years:
- Nokia has developed a concept phone that is able to morph between a traditional phone and a bracelet with the help of flexible materials and nanotechnology. The Morph will even be able to measure environmental hazards such as carbon dioxide levels or sense the blood sugar imbalance of a diabetic using microscopic sensors.
- Ever run out of power during a call? The Atlas Kinetic concept phone uses weights and springs to draw energy from everyday motion, like a self-winding watch. So you'll never again have to plug in your phone each night.
- Earlier this year, LG unveiled a prototype touch screen Watch Phone that also texts, emails and shoots photos.
- Finally, Motorola deserves kudos for already creating the world's first carbon-neutral mobile phone. Called the Renew, it's made from recycled plastic and delivered in a box made from recycled paper. Former Vice President Gore, who spoke earlier this year at CTIA about the positive impact of wireless technology on energy efficiency, certainly would approve of such "green" innovations.
We'll also see the utility and power of spectrum-based services move beyond the communications realm and into sectors like healthcare, energy, education and other fields as a way to leverage the energy and power of the more than 3.3 billion people on the planet with mobile devices.
Choice will continue to expand. Current market trends continue to belie the claim that consumer choice is lacking in wireless. Metro PCS booked its best quarter ever this year, adding nearly 700,000 subscribers in the first quarter. Cricket subscribers rose about 40 percent year-to-year. What this means is that choices in calling and data plans are nearly certain to continue their expansion, probably in ways we can't project. That's another sign of vibrant competition, which is the foundation for greater innovation.
The FCC's examination will see the true success story of today's wireless industry - a sector that's continually evolving to include more powerful devices, robust networks and competitive pricing. But there's still a lot of uncertainty. The Commission is right to look at wireless. We hope they look beyond current headlines and take a deep dive into the range of factors that make the wireless sector a vibrant and competitive engine of American innovation and economic growth.
Jonathan Spalter, chairman of Mobile Future, served as chief information officer at the United States Information Agency and as an advisor to and spokesperson for Vice President Al Gore during the Clinton administration. www.mobilefuture.org
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