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CTIA Spreading Lies Again

CTIA LogoBack when I actually watched football on a regular basis, Steve Largent was a wide receiver for the Seattle Seahawks. Despite the fact I live in the area now, I am not a Seahawks fan. My blood bleeds [red and gold][1].

Now Steve Largent is the frontman for the [CTIA][2], the lobbying group representing the mobile carriers here in the US. And guess what, Mr. Largent, I’m still not a fan of your work.

[His latest post on the CTIA blog][3] was a response to [Walt Mossberg’s tirade about how phones here are locked][4]. Now I’m not a high-profile guy like either of these two, but maybe you’ll like my opinions on Steve Largent’s statements all the same, which I will present after the jump.

From

[Largent’s post][3]:

If Mr. Mossberg were here at CTIA’s Wireless I.T. & Entertainment 2007® show in San Francisco, he’d see what the wireless world really looks like today. Instead of writing about the old 2G world, he’d see firsthand how we have moved into the 3G broadband world, where options open up for consumers.

Obviously, Steve doesn’t actually use the 3G service. Where I live, I am on the fringes of 3G service for Sprint and AT&T. Verizon doesn’t even offer 3G service in my area. Gig Harbor, WA isn’t exactly a household name, but it’s right next to Tacoma, which is one of the major cities in this region, and oh by the way, it does have 3G.

He would see that there are more than 600 different wireless devices available to consumers in the U.S. today, from carriers, manufacturers, and third-party retailers. Wireless customers in the U.S. can exchange voice, text and photo messages, can download or watch streaming videos and listen to radio programs. There are more than 150 wireless companies providing service across the country, from nationwide to regional and local providers. And dozens more companies have entered and exited the marketplace, driven by entrepreneurial vision and ambition to make their mark. If those things don’t define the meaning of a free market, what does?

This is a bunch of self-serving bullshit. There may be 150 service providers in the US. Do I have a choice of that many service providers? I have a choice of four: AT&T, Verizon, Sprint, and T-Mobile. All other “choices” I might have utilize one of these four networks. Does a major portion of the population have a choice between more than four different carriers?

Oh, and those 600 different devices? Due to the fact that carriers pretty much demand customized versions of handsets for their own needs and handsets portability is not a reality for most American consumers, it’s probably not 600 different device but more like half that.

The wireless marketplace is not static or stodgy. Wireless service providers are not the soviet ministries of old – they are dynamic players in a competitive market, working with partners to ensure that devices deliver what consumers expect, without bringing down cell sites. They are not dumb pipes, trying to substitute for the competitive marketplace – they are marketplace players. They are many things at once, but what they are today is not what they will necessarily be tomorrow. Maybe in the digital world, wireless and computing are evolving towards each other. If so, it’s because wireless devices are offering consumers more choices and capabilities, not because the computer industry offers a better market structure.

The carriers are not dumb pipes, and that’s the root of the problem. They need to stop trying to do things far beyond their core competency and get the basic service solid. I can use my GSM handset throughout most of Europe–voice and data–and not drop a call. No way one can do that in the US, no matter which carrier you use.

Handset subsidies have lowered the barriers to adopting wireless service for more than 240 million Americans. Fifteen percent of customers use prepaid or pay-as-you-go service plans that don’t involve contracts. That’s different from many other countries, true enough, but wireless service and wireless handsets cost American consumers a lot less than they cost consumers in most other countries. American wireless consumers pay less per minute and use more minutes than consumers in every European country – that’s a good equation for American consumers. And there are more network operators providing more choices for consumers in the U.S. than in most other developed countries in the world.

He’s completely missed the point. There is nothing wrong with a carrier subsidizing their handset. The problem is that in most cases, that subsidized handset cannot be used on another network.

The real problem here is that your phone and your service are not separate entities. It’s impossible for me to buy a “generic” CDMA phone and use it on any CDMA carrier I choose (Verizon, Sprint, and a number of regional carriers). Educated consumers on GSM carriers (AT&T, T-Mobile, a few regional carriers) can do this, but the phones are not as easy to obtain.

For the average consumer, you can only use the phones the wireless carrier says you can use. Can’t use that cool Nokia phone you bought from T-Mobile on AT&T’s network, even though they are both GSM. Furthermore, most carriers tell me I either have to go pre-paid or agree to a 2 year contract even if I bring my own phone to the party.

That’s where the U.S. wireless industry is today, but that’s not where we will be tomorrow. We won’t stop pushing the boundaries to give consumers more and better products and services. It’s unfortunate that Mr. Mossberg has fallen for the hollow argument that the U.S. is behind in wireless. In fact, wireless in the U.S. is dynamic, innovative, and working to deliver for consumers.

The wireless carriers need to get out of the handset business entirely. They have no business selling handsets. Would you go to your local landline provider to buy a telephone handset?

Wireless carriers also need to get out of the content business entirely. Wireless carriers don’t know content. [They are offering content everyone else is selling for too much money][5].

The way the wireless carriers can innovate is to do less. Focus on providing reliable, affordable service. Quit wasting your time and money on everything else. Become the dumbest pipe. Become device-agnostic. Let people use your network. That isn’t to say don’t make money because I guarantee if you can make a fat, dumb, reliable pipe, you’ll be making money hand over fist.

What do you think about this? Leave your comments below.

*Disclaimer: While [I do work for a company][6] that has an opinion about the subject, these opinions are mine. *

[1]: http://www.49ers.com/ [2]: http://www.ctia.org/ [3]: http://www.ctia.org/blog/index.cfm/2007/10/22/Largent-to-MossbergWish-you-were-here-in-San-Francisco [4]: http://mossblog.allthingsd.com/20071021/free-my-phone/ [5]: http://feeds.gawker.com/~r/gizmodo/full/~3/173302207/att-sells-napster-songs-over-the-air-for-2-each-313400.php [6]: http://www.nokia.com/


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