I Heart the New FCC ChairmanThank Julius Genachowski for giving us a better mobile Internet.
Posted Friday, Oct. 9, 2009, at 4:53 PM ET
It's not every day that AT&T does something unambiguously good for its customers, so let's not skimp on the praise. This week, the mobile carrier announced that it would finally allow iPhone users to run Internet phone services like Skype over their cellular connections. Skype and other voice-over-IP apps have been allowed on the iPhone for a while, but AT&T only let them work when your phone was connected to a Wi-Fi network. This was a hassle—it effectively meant that you could only use Skype at home or at the office, not as a mobile app. That's why AT&T deserves a pat on the back for its policy change: Skype lets you call people anywhere in the world for free, and now iPhone users can do so from wherever they please (or, at least, anywhere they can get decent coverage, which means not my house). And because Skype sends its data over the Internet, you won't even run up airtime minutes while you're gabbing. Good job, AT&T!
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StumbleUponBut, wait, there's more. AT&T's announcement was not the only pro-consumer news from a cell carrier this week: Verizon said that it's teaming up with Google to offer customers the search company's Android phones. This is also huge news; in the past, Google and Verizon have been at odds over the question of "openness" on wireless networks. Google has long pushed for rules that would force Verizon and other cell companies to let customers run any hardware or software on wireless broadband lines. Verizon has long been in favor of certain restrictions on what customers can do. But now the carrier seems to be changing its tune. Verizon has vowed to let Google Voice—the free long-distance and voicemail service that Apple rejected from the iPhone—run on the new Android phones. Indeed, on a conference call announcing the deal, Verizon CEO Lowell McAdam suggested that customers would be allowed to run pretty much anything on their Android phones: "Either you have an open device or not," he said. "This will be open."
Close observers of the wireless industry might be wondering whether this was opposite week. Since when do mobile carriers go out of their way to offer their customers more functions and substantially cheaper service? That's easy: Since the end of June, when Julius Genachowski became chairman of the Federal Communications Commission.
Genachowski, a lawyer who worked for many years in Silicon Valley, is the most technologically aware FCC chairman ever to occupy the job. In particular, he understands what has made the Internet such a successful platform for innovation: It was designed to avoid favoring any particular application. In the few months since he took over the FCC, Genachowski has set a new tone for the agency, promising to rein in any companies that try to restrict what people can do on their Internet lines. In August, he surprised the tech industry by demanding an explanation from Apple for its rejection of Google Voice. Late in September, he argued for new rules to make sure Internet service providers obey the FCC's network-neutrality principles. In an interview with CNBC the other day, Genachowski was asked whether telecom companies should think of him as the new sheriff in town. The chairman dodged the question. But he's being modest: Genachowski didn't have to pass a single new regulation before carriers began to transform their business practices. Whether or not he wants to be known as the sheriff, they're already scrambling to avoid his six-shooter.
Why is it such a big deal for Skype to finally get a place on the iPhone? It only has to do with the future of the Internet. As Genachowski explained in a speech at the Brookings Institution recently, the Internet was purposefully designed to be a kind of "dumb pipe"; in other words, the network doesn't use any "intelligence" to decide whether a certain application is worthy of using network space. "Instead, the Internet's open architecture pushes decision-making and intelligence to the edge of the network—to end users, to the cloud, to businesses of every size and in every sector of the economy, to creators and speakers across the country and around the globe," Genachowski said.
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It is great news for consumers that wireless companies will allow Internet phone service providers access to cellular networks. But it accelerates a debate over how to subsidize rural phone access, and this debate will be a tough one.
Urban and business users have been subsidizing rural telephone access, but as the urban and business users shift to Internet-based voice calls the whole subsidy model will break down. Fewer urban users mean that AT&T and other wireline providers eventually won't be able to support rural telephone access, or that access will become prohibitively expensive.
Regulators will be faced with a difficult set of options. They won't want to let the telcos raise rates to the true cost of providing rural service, so they'll have to choose between forcing Internet providers to subsidize rural access and taking the subsidy out of public funds. This is likely at the heart of the FCC's investigation of Google's free Google Voice service.
-- cornholio
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Wouldn't the simplest answer be to force rural residents to pay the true cost of their utilities? It's expensive to provide telephone, electricity, water, etc. to areas with a very low population density.
A sizable minority of the US population feels that everything from the Post Office to public universities are a socialist conspiracy. Maybe we should placate them and do away with regulations that artificially deflate the cost they pay for their utilities.
-- KB01
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OK, I think positive reinforcement is good for children, so tell the boys at ATT they did a good thing. But let's not get carried away, and don't think for a minute that the carriers are on board with the idea of selling dumb pipes. That is what they should do, but they have delusions about being entertainment retailers and brokers that take a cut of each financial transaction performed over the phone. If they focused on providing the fastest, most reliable access to the internet, and stopped degrading the quality of voice calls, they would be loved, even by me.
And as far as Verizon getting kudos for allowing the google voice app to run on their android phones when they have that, keep in mind that t-mobile already allows that. VZ only seems like a great company when they are mentioned in the same paragraph as ATT, but then so would a bank. OK, maybe not a bank.
-- kgsbca
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