While Internet access was part of the debate, questions about Europe's system were prominent in the spectrum talks. Europeans, with their wide-open system, enjoy better services because of greater competition, argued Columbia University law Prof. Tim Wu, who likened the U.S. wireless system to land lines in the 1950s, when customers had to lease their phones from AT&T.
Is this right? It sounds like a conflation of why mobile phone companies sell locked devices with why the U.S. has been a late adopter of mobile phone technology. The latter first:
My understanding of the situation was that European countries have better systems because the landline system under state monopolies was so atrocious there, that customers flocked to mobile systems as soon as they became available. By contrast, in the U.S., the breakup and regulation of services improved landline services enough that it took considerably longer for mobile phones to penetrate the market.
Not to mention that the U.S. has this problem with very low population density that makes it difficult to cost-effectively roll out new infrastructure for any kind of communication service. If mobile providers are spending billions pushing out mobile phone towers to cover small townships in the countryside, they can't very well direct that money to developing new services.
Now, the former, with a caveat: I'm a strong advocate for net neutrality, and having a mobile phone locked to a given provider is annoying, particularly when you want to travel internationally and buy and use minutes at the local rate instead of whatever your mobile phone company gouges from you.
But that just means I don't buy mobile phones that are locked. Any locked cell phone you can also buy unlocked, with no long-term contract requirement, from a thousand different online and offline stores. It costs more because it's not being subsidized by the mobile phone company. And I can use any GSM-enabled, unlocked phone on any other GSM network with no problem.
For a case-in-point, walk into any mobile phone store in Hong Kong, and jot down the prices on any phone you like. I'll wait.
Back? Okay, now look up the same phone with any U.S. carrier. Add the rebate they give you for signing up for a service plan back into that price. Compare. Every time I've done this, the prices are exactly the same.
If there's a problem, I don't think it's that the mobile phone companies sell locked phones. It's that U.S. consumers don't want to buy phones for their full retail price. There is already the choice to buy unlocked phones, and the additional choice to buy locked and subsidized phones. That looks like more choices, and the Free Marketeers love choices.
If the argument is that mobile service providers are locking their services so that you can't use even unlocked phones on them, that's a legitimate complaint. But I've never heard of a company doing such a thing. If the argument is that even paying full retail prices to a mobile phone company, you still get a locked phone, that's just a case of unsophisticated consumership. The options are out there, and they are really not hard to find.
One last point: is there really not enough competition in cell phone companies here? Assuming everything Wu says is right, there is still competition, only a less granular one: you can't change providers month-to-month, but you certainly can year-to-year. The fact that your phone is locked to a given provider is moot if 1) it was free and 2) after a year you can get another free phone from anyone you want. Right now I can go with T-Mobile, which has amazing customer service and well-priced packages, or with Verizon, which has amazing coverage, or with AT&T, which has the iPhone. Differentiated services despite the presence of locked devices.
