Mossberg Says Free The iPhone

Whether you are for or against hacking the iPhone, one thing everyone seems to agree on is that the iPhone would be a better product if it were unlocked, and the WSJ's Walt Mossberg agrees. He has recently posted an editorial bashing the cellphone industry for having closed networks and minds, and thereby crippling progress in the industry, and that includes the iPhone.

He proposes two models as a comparison; the PC market and the cellphone market. He describes the PC market as a prime example of digital capitalism. For instance, if you have one computer and you want to change the hardware, you can just go out and buy whatever computer you want; you don't have to clear it with your internet provider. The same goes for your web browser or music service. You can install or uninstall any software you like and subscribe to any software or service you like, without notifying your service provider or giving them a penny. This model has fostered what Mossberg calls "one of the greatest technological revolutions in human history, as well as one of the greatest spurts of wealth creation and of consumer empowerment".

Today's cell phone market is the exact opposite. According to Mossberg, "A shortsighted and often just plain stupid federal government has allowed itself to be bullied and fooled by a handful of big wireless phone operators for decades now." Limits imposed by wireless carrier companies like locking cellphones limit consumer choice and suffocates innovation. As a result, power rests sqarely in the hands of the giant wireless carriers, the cell phone market is stuck in the stone age, and the US is the laughing stock of the mobile phone world.

Mossberg makes the analogy of the cellphone carriers as "Soviet ministries" in the way they break the link between the producers of goods and services and the people who purchase and use them. "To some extent, they try to replace the market system, and, like the real Soviet ministries, they are a lousy substitute."

He notes that, as far as he is aware, Apple Inc. is the first company to be permitted to make a cellphone in which they have complete control over the hardware. Nonetheless, they had to "make a deal with the devil" to gain the freedom to do so, and therefore have locked and re-locked the iPhone to AT&T's network, making it less desirable.

And then there are the third party apps. Apple has since promised us the third party apps, but Mossberg notes that in his line of work he has met with several small companies who have been unable to get their software on mobile devices because wireless carriers usually demand a small fee to allow them on the phones. As a result, innovation is placed in a choke-hold.

The problem lies in two areas: the lack of an early standard in wireless technology led to two splits that are incompatible. You have CDMA used by Sprint, Nextel Corp., and Verizon, and GSM used by AT&T and Deutsche Telekom AG's T-Mobile. If one wants to switch between, say, AT&T and Verizon, they have to buy a new phone. Also, the government allows GSM carriers to lock cellphones to their networks, further restricting people's choice in carrier.

So it's a mess. How can it be fixed? Mossberg says that subsidies on cellphones that make them cheeper need to be lifted, along with the restrictions that follow with them, as a start. It would be most ideal to force all wireless carriers to standardize their technologies and unlock all of their devices, and fall into the role of just the service provider.

Interestingly, the US has been through this before already. Before the 1970's, people were forced to rent clumsy phones made by a subsidiary of -guess who- none other than the monopoly of AT&T. Luckily the government stepped in and opened up the market and the wireless industry became healthier, more useful and versatile. Mossberg speculates that the same would most likely happen if the same were to happen to this market.

[via the Mossblog]