August 19, 2009
Posted by Timothy Karr

The telecom sector is too important to be allowed to hold back the U.S. economy, writes Andy Kessler in Wednesday’s Wall Street Journal. But that's exactly what it's doing by overcharging for voice calls, eliminating network choice and stifling mobile phone innovation.

Kessler cites AT&T’s recent blocking of the Google Voice application (in apparent collusion with Apple) as evidence that the "135-year-old Alexander Graham Bell era" needs to come to an end:

"AT&T clings to the old business of charging for voice calls in minutes. It takes not much more than 10 kilobits per second of data to handle voice. In a world of megabit per-second connections, that's nothing--hence Google's proposal to offer voice calls for no cost and heap on features galore."

The market seems ripe for cost-cutting competitors. But the carriers have a plan: By owning the network and locking down all devices on it, they can block new technologies and stifle any innovation that they don’t control.

"It's inexcusable that new, feature-rich and productive applications like Google Voice are being held back, just to prop up AT&T," writes Kessler. "How many productive apps beyond Google Voice are waiting in the wings?"

The FCC's recent inquiry into AT&T's blocking is just the beginning. According to Kessler, we need to completely overhaul our telecom market to spark economic growth and open the airwaves to an explosion of game-changing innovations.

Kessler’s prescription follows many of the recommendations we have been making at Free Press:

1. End phone exclusivity. "Your broadband provider doesn't decide what kind of computer you can connect to at the end of your DSL or cable wire," Senator John Kerry (D-Mass.) wrote for Free Press in June. Why should mobile carriers tie down devices? The bottom line is that exclusivity isn't a technology problem; it's an abuse of power problem. Get rid of that, and innovation will bloom.

2. Promote unlicensed access to the airwaves. Great advances in technology have created a need to modernize how we use spectrum. It’s time to shed closed networks that have placed the airwaves under lock and key in favor of open access for everyone.

3. End municipal exclusivity for cable companies. More mobile and fixed line Internet competition keeps prices down and networks more honest. Local monopolies allow few options for consumers who want to go elsewhere should their network provider, say, abuse Net Neutrality, the nondiscrimination principle that protects digital choice.

4. Speed up connections to homes and phones. Kessler says that data speeds should more than double every two years. Free Press has repeatedly called for a faster minimum requirement for all connections classified as "broadband" at the FCC. For too long, U.S. providers have gotten away with charging too much for connections that are a fraction of the speed available to users in Western Europe and parts of Asia.

President Obama and others have identified an open information economy as a main driver of America's economic recovery. We can't afford to let companies like AT&T apply the brakes.