Mobility Category Archives

April 15, 2008

Open Sesame

With all the "open" talk at at CTIA recently, Ali Baba might have thought Las Vegas was home of the forty thieves (not to mention casino odds). The FCC was concluding the 700 MHz auction, which included rules for the C Block that require "a platform that is more open to devices and applications." Google had agitated for such a requirement, but Verizon Wireless won the auction, bidding $9.4 billion.

How will Verizon Wireless comply with the openness rules? They revealed some plans in New York city, on March 19, when they unveiled their Open Development initiative. I arrived at the event with some skepticism. I've written before about how the Internet business model challenges the culture of the mobile industry (see Where Worlds Collide). But after an enthusiastic welcome by Tony Lewis, the vice president of Open Development, the Verizon chairman and CEO Ivan Seidenberg gave a keynote that addressed these issues directly. He recognized the intersecting megatrends of mobility and the Internet as prompting a new wave of applications, which no single company can create by itself. Instead, Verizon embraces an ecosystem approach, which motivates this new Open Development activity.

After his speech, he spent the rest of the morning participating in the meeting, including conversations during breaks with participants like myself. Senior members of the Verizon Wireless team also spoke, including president Lowell McAdam, chief marketing officer Mike Lanman, who described both retail and wholesale commercial models, chief information officer Ajay Waghray, who described self-service activation options, and chief technology Tony Melone, who along with members of his team, spoke about the device certification requirements. The main session concluded with remarks by James Piwowarsk of OnStar, which is built on the Verizon Wireless network. Many questions remain, but clearly this initiative arrived with much energy and attention at senior levels of Verizon.

What are their motivations? To some extent, they must want to seize the initiative in defining "open." Market-driven moves towards open mobile networks will yield more flexibility than top-down government regulation, as envisioned by the Skype petition to the FCC. The Apple iPhone terms with AT&T defined a new business arrangement, and Google Android promises more to come. But fundamentally, Verizon must expect the Open Development initiative will be good for their business. OnStar has generated millions of incremental dollars for Verizon, and they surely hope for similar innovation from the Open Development program.

This business motivation will disappoint some, who think "open" should mean "free" (as in, "no charge"). But it's unreasonable to expect that Verizon Wireless would give away its services after investing billions in spectrum and equipment (including some excellent Cisco products!). Verizon Wireless will need good return on investment, while leaving room to prosper for those using its Open Development program. Let me offer some guiding principals for this balanced openness:

1. Open means open. In other words, you can do what you want, unless you objectively harm others, presumably by harming the network.


2. Objectively harmful behavior will be discouraged or prevented, but competitive behavior will not.


3. When possible, excess resource consumption will be controlled by billing ("economics"), not blocking ("regulation").


4. Egregious behavior may result in immediate blocking or deactivation ("jail"), but the definition of such behavior will be technically objective and well documented in advance.


5. Compliance testing will be decentralized and competitive, to avoid bottlenecks and encourage reasonable costs.
   
6. You get what you pay for, with clear public commercial terms.


7. A network operator may offer value-add services (quality of service, text messaging, etc.). But such offerings are optional, not part of the base definition.

Whether Verizon and other operators embrace such principals will determine the real-world impact of all this talk of openness. With the right balance, the mobile industry could say "open sesame" to more riches than in Ali Baba's cave.

Posted by Larry Lang at 01:57 AM Permalink | Comments (0) | TrackBacks (0)

February 26, 2008

The End of Gs

Finally back on California time, after a busy week in Barcelona at the Mobile World Congress. The GSM Association, which owns the event, changed the name from the 3GSM World Congress, dropping the reference to 3G. In part, this represents the desire to attract participants from the information technology, financial services and entertainment industries (including Robert Redford). But dropping references to radio technology (2G GSM or 3G W-CDMA) also suggests the "end of Gs" for the mobile industry.

Not that new radio technology was ignored at the Congress. Many heralded the arrival of 3GPP Long-Term Evolution radios (although the impression of imminence is undermined by the LT in LTE), others exhibited WiMax (including Cisco), and femtocells generated much interest (including partner ip.access). But the notion of 4G replacing 3G, which replaced 2G, which replaced 1G, makes decreasing sense as a framework to describe the future.

Past evolution was driven by changes in radio technology, from analog to digital and then to CDMA. As the radio technology changed, the standards bodies (3GPP and 3GPP2) also changed the core. But future radio evolution is unlikely to come in tidy generations. Instead, mobile networks will use an increasing blend of radio access.

The ongoing evolution is now driven by a change in dominant payload, shifting from voice to data, with traffic shifting even faster than revenue. Data demands ever higher bandwidth. Fortunately, Moore's Law will unleash ever faster radios (and in more combinations), but business cases will spread their adoption over time, while history and regulation spread their adoption across geographies. Also, physics and economics dictates different radios for different applications, for slower speeds over longer distances, like cellular, and higher speeds over shorter distances, like WiFi.

Thus, mobile operators should expect not a monochromatic shift from 3G to 4G, with a simultaneous re-engineering of the core network. Instead, they should plan for a rich palette of radio access, with a core comprising a network of these access networks, that is, a core mobile internetwork. This change explains why so many mobile operators increasingly consider IP the foundation, around which to array the growing collection of radio technology. New radios should have no more effect on architecture and applications, than upgrading links from shared 10 Mbps to 1 Gbps Ethernet.

Of course, this focus on the mobile internet and IP is exciting for Cisco, but it also raises the challenge of accelerating our mobile gateways to meet the traffic growth. At the Congress, we demonstrated the SAMI platform for mobile gateways (GGSN, PDSN, content services), which Current Analysis recently tested up to 54 Gbps, making it the fastest in the industry by a factor of more than five times. With the growth in traffic from the iPhone and other devices, it comes into service just in time.

As always, Barcelona was full of beauty and fun. In a park near the Congress, I came across a huge outdoor sculpture by Joan Miró, called "Dona i Ocell" ("Woman and Bird"). While photographing it with my camera phone, I noticed the pigeons behind me squawking very strangely. Only they weren't pigeons, they were parrots living in the palm trees. More international arrivals, along with the Mobile World Congress participants, all trying the patience of the locals with our chatter.

Posted by Larry Lang at 09:44 AM Permalink | Comments (0) | TrackBacks (0)

February 19, 2008

"It’s the application stupid!"

Anticipation was building... show organizers even changed the event’s name to “Mobile World Congress” (MWC) to acknowledge the evolution of the industry. The stage was set for a technology debate around HSPA, LTE and WiMAX. Many were prepared to engage in the rhetoric and race for mobile access technology supremacy. There was plenty of hype as Intel, Ericsson, NSN, and other corporate titans attempted to increase mindshare for their particular solution or approach.

In the end, it was the small guys who captured the attention and headlines─the companies who focused on the delivery of a rich mobile user experience. "It’s the application stupid" was the theme that stole the show (see "Green Porno—a series of short films designed for cell phones and computers; provocatively named for search recognition). As Softbank CEO, Masayoshi Son and Vodafone CEO Arun Sarin pointed out in their keynotes, the Internet, entertainment and mobility are where the world is heading. Mr. Son even went so far as to say, "Voice will be offered for free" Wow... how times have changed.

So what is the killer app?

Well, you could say new search techniques from Yahoo!, Skype for mobile, fixed-mobile services, social networking, video chat, financial services, targeted advertising, or just the high-speed access to the Internet; the list goes on and on. Indeed, application innovation was a common thread throughout the MWC halls; big guys and little guys each demonstrating what is possible now that we have deployed high-speed mobile broadband (pick your access type). Combine that infrastructure with fast handset processors that support appealing graphics and one could confidently suggest that mobile operators are ready and primed to serve as a growth engine for their shareholders and the Connected Life economy at-large.

With all the excitement around new applications that use the high-speed data path of a mobile network, one has to ask, “How will the mobile operator make money on all this Internet traffic?” Is it the Apple-ATT over-the-top approach? Or Verizon Open access initiative? We have seen this movie before in the fixed world and the service providers’ ability to increase bandwidth and revenue from end-users (simultaneously) has proved difficult in competitive markets. My suggestion to mobile carriers: leverage the intelligence in your network. Turn these “smarts” into sustainable business advantages by allowing consumers to personalize services and offering tiered, premium services (for a fee) that consumers value and are willing to buy.

By all means, don't give it away.

Stay tuned for more.

Posted by Jeff Spagnola at 03:53 PM Permalink | Comments (1) | TrackBacks (0)

February 10, 2008

Paradigm Shift in IP Mobility (CMIP to PMIP)

Mobile operators and service providers have been looking for efficient solutions to the inter-domain IP mobility for the past fifteen years or so. The main motivation for this effort was the ability to continue an IP session when a host IP address had to change due to mobility. Client Mobile IP (CMIP for short) was introduced by Internet Engineering Task Force (IETF) to overcome this problem.

The CMIP allows a mobile terminal (e.g., a laptop or a PDA) to keep its transport connection opened and continue to be reachable while moving. The CMIP also provides a common IP layer mobility across different access technologies. This would be quite attractive for mobile operators who might own several access networks of different types such as WiMax, 3GPP2 High Rate Packet Data (HRPD), or 3GPP Long Term Evolution (LTE), etc.

While CMIP ensures seamless mobility for the user session but it introduces some deficiencies such as waste of airlink capacity due to signaling overhead and added complexity to the mobile terminal by requiring the client IP mobility software.

To alleviate this problem IETF NETLMM WG is currently developing a protocol so called Proxy Mobile IP (PMIP) based on a network-based mobility management approach. The PMIP eliminates signaling overhead, reduces software complexity/cost and poses no requirement for a network interface to change IP address when the mobile node changes to a new router. The IETF standards for PMIP (PMIPv4 and PMIPv6 drafts) are primarily authored by Cisco IP mobility experts and SP network architects. Both drafts are near completion and will be published as new RFCs soon.

Posted by Rajiv Kapoor at 11:01 PM Permalink | Comments (1) | TrackBacks (0)

January 25, 2008

Coherent Experiences

"Seamless mobility" is a trendy industry buzz phrase, promoted by Motorola, Microsoft, Intel and many others. Any content available on any device across any network...sounds magical! Often this idea arises in discussions of fixed-mobile convergence. Yet systems that successfully span fixed and mobile are usually not seamless at all. On the contrary, fixed and mobile remain distinct, each optimized for its own constraints.

Consider two highly successful systems, the Apple iPod and the RIM BlackBerry.

First, neither system attempts to create a universal experience for accessing any content. On the contrary, each is optimized for a particular compelling experience, listening to music or podcasts on the iPod, and tending to business email on the Blackberry. Each experience is concrete and easy to understand, not abstracted into universal techno-speak. "Listening to music" and "tending to email" are much more tangible than "a new world where consumers are mobile, informed, entertained, secured, connected and empowered" (sorry, Motorola). Future examples might include "watching television," "playing games" or "attending meetings." Focus on experience seems central to Apple and RIM's success.

Second, neither attempts to create an identical, "seamless" fixed and mobile experience. Using an iPod is different than using iTunes, and using a Blackberry is different than using Outlook. And the experiences should be different. With iTunes and Outlook, the user is sitting down, gazing at a full screen, and using both hands on a keyboard and mouse. With an iPod or Blackberry, the user is on the move, glancing at a small screen, and often using only one thumb on small buttons. Rather than seamless, these experiences are coherent. They are the same in ways that make sense, and they are different in ways that make sense. My songs and podcasts in iTunes also appear on my iPod. When I delete email on my Blackberry, it's also deleted when I look in Outlook. Much of the art of such systems goes into designing every detail correctly, maintaining this coherence. Hand-waving about "seamlessness" neglects these all-important details.

Finally, the coherence of each system flows from a single source of definitive data. For the iPod, that source (of song files) resides on my Mac or PC with iTunes, and coherence is maintained through syncing the iPod periodically. For the Blackberry, that source (of emails) resides on my Exchange server, and coherence is maintained through the cellular data network. As Internet connections become faster and more ubiquitous, I expect that such sources will increasingly reside "in the cloud," that is, in professionally maintained data centers, rather than a personal computer (more like the BlackBerry than like the iPod). That way, maintenance and back-ups don't burden the user, and data stays current rather than drifting into obsolescence between syncs (particularly noticeable with podcast subscriptions). In fact, if I were the Microsoft Zune product manager, I'd shift towards the cloud model and away from the sync model, in an effort to differentiate from its current imitation-iPod positioning.

Both these examples require specialized mobile devices, but with the emergence of more open mobile devices, perhaps developers will create new experiences on such platforms instead. Either way, the key question is not whether they support seamless mobility, but rather whether they create a coherent experience. With offerings from big companies, like Cisco's Unified Mobile Communicator and Qualcomm's MediaFLO, to start ups, like MobiTV and Danger, users have many new experiences to try.

Posted by Larry Lang at 05:36 AM Permalink | Comments (0) | TrackBacks (0)

January 07, 2008

The Mobile Web in 2008

The Internet and Mobility have been the two biggest trends in the communications industry over the last several decades and both are now on a clear collision course. Companies are also starting to collide as the legacy mobile handset world has to deal with the likes of Apple and Google. It will be interesting to see how this plays out being that these two industries have so little in common.

-- The Mobile world tends to be fairly closed: operators are in control, voice is the primary app, there is limited innovation, and end users are controlled through subsidized phones and early termination agreements. The mobile industry also seems to be hitting saturation in much of the developed world.

-- The Internet world is very open, end users are in control, there are many different types of applications, lots of innovation, and customers stay because they like what they get.

How will these two industries come together?

Here is my top 10 list for the mobile Web in 2008:

1) Everything starts with the device. With the arrival of the iPhone, we have the world's first truly useful mobile computer with a modified MAC OS X operating system, a Safari Web browser, and a very innovative UI. Compelling new devices from other vendors are certain to follow and will allow the world to finally embrace a truly useful mobile Web experience. In time, most Internet access will be via mobile devices (not the PC). Look for a tremendous amount of innovation in the mobile device space in 2008.

2) The mobile Web will need apps….and lots of them. Developing apps for the mobile world is more challenging then in the wired world as there are more OS options. In 2007, we saw Apple and Google join a list that includes Windows Mobile, RIM, Symbian, Linux, and Palm. The Google Android option promises to be the most open of all. The big question here is just how much traction they will get in the market?

3) Need bandwidth... and lots of it. In the voice world, the average user consumes about 12 kbps. As we move to a mobile Web experience, consumption will increase by between one and two orders of magnitude. Where will that bandwidth come from? New modulation technologies (like OFDM) and antenna technologies (like MIMO) will help. Auctioning off analog TV bands is another possibility. However, to really increase the bps per square kilometer we will need smaller cells... much smaller cells. Options here include femtocells and WiFi.

4) FMC = femtocells or WiFi. Femtocells offer a very compelling solution to the challenge of delivering a lot more bandwidth without a lot more cost. It accomplishes this by creating a very small UMTS cell that covers an area about the size of the average home. The home unit would cost around $100, connect to the mobile network via broadband links (DSL or Cable) and the Internet, and support all standard UMTS mobile devices. The subscriber would get a vastly enhanced user experience and the operator doesn't have to pay for power or backhaul. Everyone wins! Look for this technology to rollout in 2008.

WiFi also has great potential in enabling the mobile Web. This technology has struggled in the mobile world as operators have never cared for WiFi. But things are starting to change. As operators have become more positive about WiFi, it has started to appear on more devices. WiFi is the world’s most popular indoor RF technology and has a great future in mobile devices.

5) MIMO and OFDM offer great promise in increasing the airlink efficiency. These technologies will be implemented first in Wimax networks. Success here will play a crucial role in pushing the 3G world more rapidly toward OFDM and MIMO in the guise of LTE. The future will see UMTS/LTE as the dominant licensed RF technology for paired spectrum and Wimax will hold the same position for unpaired spectrum. Wimax should start to gain a solid foothold in 2008 with such high profile deployments as Sprint-Nextel Xohm network which is set to rollout in selected US cities.

6) Lots of gateway capacity required. Today, most mobile traffic is circuit switched voice. That will change as networks begin the migration to all IP end-to-end. EVERYTHING will then go through the IP network, which implies much bigger packet gateways (GGSNs, PDSNs, and ASN GWs). Next-gen packet gateways need to have at least two to three orders of magnitude more capacity and be even more reliable. Look for larger and more robust mobile GWs in 2008.

7) Mobile networks need to "open up" in order to enable the mobile Web. Closed architectures worked in the voice world where there was really only one application that mattered. Such a closed approach will NOT work in the mobile Web where we will see thousands of companies developing all sorts of new applications. We can trust that the Web 2.0 community will try EVERYTHING and the market will decide what works and what doesn't. The "open" Internet business model has always been a bit unsettling to mobile operators as it is difficult to monetize. Tim O'Reilly, in a recent Op Ed piece in the NY Times, made the case that open systems engender a "winner takes all" environment. History would seem to back that up. His argument implies that whichever operator can master the new world of the mobile Web can win.... and win really BIG. VzW is starting to move in this direction. We will see the mobile operators struggle with this transition in 2008.

8) The enterprise will be a key constituent in the mobile world. RIM's early lead is now being challenged by Microsoft with their recent Mobile Device Manager release. Device management is crucial to a successful enterprise deployment and the vendors that get this right will do very well in the market. Today, most of these systems are optimized for a specific OS. A great opportunity going forward is to develop a multi-OS mobile device manager. A variety of different vendors are chasing this opportunity.

9) The emergence of mobile Web will create all sorts of backhaul challenges. As all traffic moves to IP, look for technologies like metro Ethernet to become the primary mechanism for cost effectively backhauling the huge amount of traffic that these networks will generate.

10) IPv6's time may finally have come. The emergence of mobile Web and the huge number of people worldwide that will be introduced to the Web via a mobile device should finally overwhelm IPv4’s much more limited address space. IPv6 offers all sorts of added capabilities that make it very compelling in a mobile environment, including the potential to separate a user’s location from their identity (one of the big limitations of IPv4 in a mobile environment). Look for lots of IPv6 related activity in 2008.

Posted by Jeff Spagnola at 07:29 AM Permalink | Comments (1) | TrackBacks (0)

November 16, 2007

Google and the Open Mobile Phone

I participated in the Rutberg Wireless Influencers conference last week. Various interesting sessions, but the biggest buzz was about Google's announcement of the Android mobile device platform and the Open Handset Alliance. Some industry watchers expected a new device, like the Apple iPhone. Instead Google proposed a software environment that would allow any company to create new applications, including Google of course.

Android joins multiple existing mobile device platforms, including Symbian supported by Nokia and others, Qualcomm's BREW, the fading Garnet OS (formerly Palm OS), and Microsoft Mobile Windows for Pocket PCs and Smartphones (and some cars). The Google proposal seems most aligned with the open source mindset, and certainly illustrates the colliding worlds of the mobile industry and Internet industry. The concept is promising, but will it attract a critical mass of application software and device developers? And will mobile operators allow such devices to connect to their networks?

When asked at the conference about the Google announcement, Lowell McAdam, president and CEO of Verizon Wireless, raised concerns about risks such openness might pose to users. For example, what if malware infected an Android-equipped phone and started relaying your exact location to a stalker? Such scenarios are frightening, of course. But Verizon Wireless might also have business concerns about losing their ability to monetize services beyond basic mobile IP connectivity, if they lose control of mobile device software.

Google's motivations are not entirely philanthropic, either. Surely they understand the potential power of mobile advertising. And they must worry that the current mobile ecosystem doesn't lend itself to their participation, at least not to the dominant degree they enjoy with the fixed Internet. So when Google says "open", remember they especially mean "open for Google."

Mirroring such business maneuvering on a small scale, the conference also featured a friendly Texas Hold'em poker tournament. The dealers kept funding losers with more chips, so risk aversion disappeared and valuations for bad hands soared. I'll leave the obvious analogies to the dotcom bubble as an exercise for the reader.

Posted by Larry Lang at 08:23 AM Permalink | Comments (0) | TrackBacks (0)

October 29, 2007

Location, Location, Location

Nokia recently announced plans to acquire NAVTEQ for $8.1B. At first glance, it's no surprise that a leading mobile device company would want such valuable map data. When you're on the move, you often want to know where you are and what's around you. But consider this comment of Olli-Pekka Kallasvuo, president and CEO of Nokia: "Location based services are one of the cornerstones of Nokia's Internet services strategy. The acquisition of NAVTEQ is another step toward Nokia becoming a leading player in this space." Hold the phone...what's this about location based services and their Internet services strategy? Aren't mobile operators—Nokia's customers—usually considered the service providers?

Indeed, mobile service providers have long anticipated new profits from location based services, built using subscriber location information mandated for emergency services. So far, those profits have proved elusive, perhaps because of stringent privacy concerns and regulations, or perhaps because such information is currently too expensive or too difficult for creative location application companies to flourish.

Such services expect that location information is captured by the service provider, in their network, and is theirs to sell. But what if the location information is captured by the mobile device instead of the network? Many mobile phones, particularly those using the CDMA standard, already include a GPS chip. (Its location fix might be augmented by the mobile network for more exact location.) Software on the mobile device could read this location information, send it across the mobile network in IP packets, and trigger some independent location service (built using NAVTEQ data?), with no involvement by the mobile service provider (aside from carrying the packets). If that happens, no new profits from location services accrue to the mobile operator.

This business challenge has not gone unnoticed by mobile operators, prompting some to block access to the APIs that would allow software to read location information. Now Nokia seems ready to challenge the operator's sole hold on location information. Perhaps they are emboldened by the success enjoyed by Apple, in creating a full iPhone experience with relatively minimal operator involvement.

Personally, these new location services can't be ready soon enough for me, because, of course, real men don't ask for directions. (And here's one theory why.)

Speaking of men's foibles, have you noticed a decline in men wearing ties? Recently, I was surprised when some Japanese visitors, usually dressed quite formally, arrived at our customer briefing center without ties. Then, during a fairly formal meeting at the CTIA conference last week, I counted: of 42 men in attendance, 34 wore jackets or blazers, but only 4 wore ties. Neckties seem to be headed the way of men's hats, into the back of the historical fashion closet. Of course, women always knew better than to wear a silk noose!

Posted by Larry Lang at 06:53 AM Permalink | Comments (0) | TrackBacks (0)

September 27, 2007

Ecosystems at WiMax World

This week, I had the privilege of speaking on a panel at WiMax World in Chicago. My fellow panelists and I spoke about the advantages and challenges of WiMax, with a particular emphasis on the ecosystem surrounding the technology. In fact, "ecosystem" (as defined by Dr. James Moore) was the key buzzword at the conference, as participants realize the advantages of this technology will only impact the market if a critical mass of companies work together. We did our part, with the Cisco ASN gateway interoperating in the booths of several WiMax radio vendors.

Berge Ayvazian of Yankee Group moderated the panel, and he lightened the mood by bringing three foam balls on stage, bearing the Sprint WiMax brand XOHM. He challenged panelist Jeff Thompson, founder and CEO of Towerstream to juggle them, and Jeff rose to the challenge with several deft cycles. Not to be outdone, Atish Gude, another panelist and senior vice president of Sprint Xohm, juggled at least as well. Both earned a round of applause from the audience. Clearly, my conference speaking skills need to move towards circus tricks, perhaps fire eating or sword swallowing.

While WiMax still faces a long road ahead, one service provider with whom I spoke has already completed successful multi-vendor interoperability tests. He showed me a USB-based "dongle" used to connect laptop PCs to WiMax service. (USB seems poised to displace PCMCIA as the PC connection of choice, in part because it works with desktop PCs, not just laptops.) Not yet a full WiMax ecosystem, but good first steps.

Posted by Larry Lang at 09:38 AM Permalink | Comments (0) | TrackBacks (0)

September 19, 2007

Where Worlds Collide

My group at Cisco works on mobile Internet products, so I follow the news in this area closely. A common theme is the stresses that arise along the boundary between two business models: that of the mobile industry and that of the Internet industry. Analogies that come to mind are crystal grain boundaries (I live in Silicon Valley) or platectonic boundaries (near the San Andreas fault ), regions of dislocation and instability. While some might argue about which business model is superior, a more useful observation is that both have proved fabulously successful, even though each is aligned differently. As these two successful industries increasingly intersect, their distinct directions drive many news stories and trends we observe.

I think of the Internet as aligned "horizontally," with a multitude of players adding value in distinct layers, with competition and partnering happening around de facto standards. For Cisco, the most important standard is the Internet protocol (IP), which allows many kinds of information (web pages, MP3 files, phone calls, YouTube videos) to flow over many kinds of links (Ethernet, phone lines, WiFi). The broader Internet has many such standards, including HTML, Flash, BIOS, PCI-e, and so forth. Because of this variety, new players emerge easily and evolution happens rapidly. While this change and innovation create a vibrant and stimulating industry, they also cause some chaos as a byproduct.

Meanwhile, I think of the mobile industry as aligned "vertically," with fewer players taking on larger roles. The small number of spectrum licenses constrains the number of mobile operators (compared to the explosion of Internet service providers), while the rapid growth of mobile networks developed a small set of highly integrated equipment providers. Despite many standards, the radio interface between handsets and base stations is the main focus of interoperability, and even there, operators choose the handsets they offer their subscribers. One could lapse into polemics that this approach is "too closed," but by constraining chaos, the mobile industry has reached the largest scale of any communications technology around the world.

Enough theory, time for an example. In February 2007, Skype (now part of eBay) petitioned the FCC to declare that the 1968 Carterfone decision applies to mobile networks. Just as Carterfone allows connecting any non-damaging device to the public telephone network, Skype would like to connect any compliant device to mobile networks, even if operators object. (Currently, the operators alone decide what devices may connect.) Presumably, Skype would like to create a device that carries voice-over-IP phone calls, mobilizing their existing PC-based service, leaving the operators just to shuttle IP packets. Also presumably, the operators would prefer to maintain control over all voice calls on their networks.

Each side of this argument cites logic from their respective worlds. In their petition, Skype recalls the wonderful innovation that the open Internet has brought forth, adding "in stark contrast to open development standards that exist on the Internet, wireless carriers have exerted control over devices as well as the mobile operating systems upon which they run." They cite Columbia Law professor Tim Wu, whose corroborating paper on "wireless net neutrality" was conveniently published less than a week earlier. Meanwhile, the CTIA mobile industry group responded with warnings of the chaos that such unconstrained choice would unleash, claiming "the entire network suffers, [by] subjecting all wireless users to the experimentation of the few subscribers interested in alternative devices..."

Who's right? Some mobile operators have disabled features they find threatening, including voice-over-IP, WiFi, and some Bluetooth profiles. But opening the Pandora's box of government intervention is a blunt weapon to brandish. As Senator John Sununu (R-New Hampshire) emphasized at a recent CTIA gathering, Carterfone was imposed when the Bell System enjoyed a strong, government-supported monopoly. The mobile industry is much more competitive, and the forces of competition seem likely to generate attractive consumer choices.

The recent Apple iPhone introduction gives good evidence of the power of competition. Apple took advantage of its enormously popular iPod to negotiate an agreement with AT&T Wireless allowing them unprecedented control of the mobile device, its software, and even the split of revenues. In exchange, AT&T Wireless enjoys a period of exclusivity to offer the iPhone, encouraging existing customers to renew contracts and prompting customers of other operators to switch to AT&T. Real innovation, in both technology and business model, with no government intervention at all. And an example of the intriguing shifts along the boundary between the mobile industry and the Internet.

Posted by Larry Lang at 08:53 AM Permalink | Comments (1) | TrackBacks (1)