01/11/2008 06:56 am ET Updated Dec 06, 2017

Roadblocks to the Mobile Web

The introduction of the iPhone last year foretold a not-so-distant future where Internet access is a constant for those on the go. But the "mobile Web" -- a prospect made very real by the iPhone's raging popularity -- raised thorny questions about the policies that allowed cell phone companies to control our wireless experience.

iPhone in Chains
These questions spilled over onto the floor this week at the Consumer Electronic Show in Las Vegas, where a flood of new handheld Internet devices promise to compete with the iPhone and bring the mobile Web within everyone's grasp.

Whether they know it or not, millions of wireless consumers will play a part in a contentious public policy debate every time they pick up one of these new Internet devices.

The problem is that surfing the mobile Web will never be a true Internet experience as long as powerful wireless companies like Verizon and AT&T dictate policy in Washington and throttle Internet access over their networks.

While these same carriers lately made a show of embracing the idea of giving consumers more control over devices, they're still steadfastly reluctant to hand over real control. As long as this remains the case, the current buzz about "an Internet in your pocket" will amount to little more than hucksterism and hype.

Innovation vs. the Old School

At the close of 2007, many of the largest mobile carriers declared a newfound love for openness -- allowing customers to use any compatible device or software on their networks.

But their courtship of consumer choice is more of an arranged marriage -- the urging of policymakers, dogged public advocates and disgruntled consumers -- which pushed the carriers kicking and screaming to the altar.

And there's still a catch. Unlike the wired Internet, which operates on an open system, your freedom to access what you want on wireless systems is not guaranteed; it is granted or denied by your wireless company.

For years, the carriers lobbied Washington for control of wireless spectrum while pushing leased and subsidized handsets onto consumers. It seems like a great deal to get a cheap phone with your wireless plan. But it's a devil's bargain that charges you for your phone over the life of your contract and penalizes you with high termination fees, crippled applications and gated Web access.

It's a business model that Columbia Law School Professor Tim Wu calls anything but revolutionary. "AT&T is the oldest of the old school -- the most ancient major high-tech firm in the United States, founded in 1878," Wu wrote in an influential Slate article. "AT&T is back to its classic business model: own the largest networks and everything on them."

This belief extends beyond its entrenched land-line services into the world of wireless.

Internet over the Air

On Jan. 24, the Federal Communications Commission is preparing to auction off access to an invaluable chunk of public spectrum -- the "700 band."

Until very recently, most people hadn't heard that such valuable airwaves were going up for grabs. But these airwaves represent our last best chance to connect tens of millions of Americans to an open and affordable Internet.

This chunk of spectrum has the capacity to beam high-speed Internet signals almost everywhere in the country. With qualities that allow signals at this frequency to pass through concrete buildings and over mountains, this spectrum can connect people -- using laptops, cell phones, and other mobile Internet devices -- who are now bypassed by "wired" cable and DSL Internet providers.

But the promise of more universal access will only come to be if those who win 700 band licenses are actually interested in bringing choice to the market.

Companies like AT&T and Verizon hope to horde this spectrum and stifle competitive and cheaper alternatives to their closed networks. Letting them gain exclusive control over the 700 band would likely spell disaster -- a wireless world that's still dominated by a handful of carriers with a track record of price gouging and an aversion to innovation.

'Calcified' Carriers

After years of phone and cable company control over the Internet marketplace, the United States has fallen to 15th in the world broadband rankings, with few choices and some of the highest prices for the slowest speeds in the world.

We will continue to fall behind as long as we let a cartel of companies dictate Internet access for both wired and wireless connections.

These politically connected corporations don't see this new spectrum as a chance to blow open the marketplace. They see it as a threat to the very profitable status quo.

Their continued control has left the U.S. generations behind other nations, a failure that prompted New York Times blogger David Pogue to call American carriers "calcified, conservative and way behind their European and Asian counterparts."

Prying Open the Networks

The FCC moved last summer to change this, opening up the 700 band to inject competition and innovation into the frozen wireless marketplace. While its decision was a step in the right direction, it amounted to little more than a half-gesture toward true open access across all wireless applications.

At the urging of more than a quarter-million citizens, the FCC attached conditions to the 700 auction that would unlock cell phones and open them to all applications. But they didn't heed a proposal put before the agency by public advocates, consumer organizations and tech companies that would have made true openness a reality -- requiring that the spectrum be open to wholesaling where several carriers can compete against one another for consumers.

The end result is that despite the recent decisions at the FCC, the phone companies can still lock down the market and stifle openness. Ben Scott, policy director of Free Press, explains:

Let's say that Verizon Wireless wins the 700 MHz band licenses at auction that are required to connect any phone you like and offer any Internet application you choose. Great, in theory. But in practice, Verizon Wireless could use price-gouging to accomplish the goal of steering you to their preferred phones and applications.

If it costs five times as much to use a competitor's device and five times as much to use a competitor's application, most users will choose the path of least resistance. Suddenly promises of openness don't look so grand.

Why this Matters

Worldwide the cell phone market is reported to be nearing 3 billion units, with 38 handheld devices sold every second. Contrast that with the mere 1.2 billion people who have logged on to a fixed Internet connection. Add true Internet capability to cell phones, and the makings of the next digital revolution are at hand.

In America, the 700 auction could put this country one step closer to ensuring Internet access for everyone that President Bush promised but failed to deliver by the end of 2007. Though it won't dramatically change the status quo, it could be a precedent-setter that shifts consumer demand and public policy toward real openness.

The problem though is the closed model under which these devices still operate. With a few notable exceptions, we have been blissfully free of gatekeepers on the wired Internet. But that won't be the case in the wireless world -- unless we make it so.

A coalition of public interest groups and tech companies has joined to urge the FCC to open devices and applications across all mobile networks right away. That is the crowbar we need to pry open the closed networks of today and guarantee and open wireless Internet for future generations. These changes have to happen soon before an Internet-to-go becomes yet another walled garden.

While Las Vegas is buzzing over a "mobile Web," it's time we took stock of what that really means for innovation, competition and consumer choice.

It's not just about shiny gadgets and Vegas spin. It's about a future where handheld devices will be our No. 1 point of contact with the Internet. The iPhone is our wake-up call to get busy.