Wireless Competition and Mobile UC
The newly appointed FCC Chairman Julius Genachowski took up a number of issues in the wireless market on the agency’s first open meeting in over seven months last week. While the potential of new regulations typically isn’t something we cheer about, after the dysfunctional reign of Kevin Martin, almost any change at the FCC has to be for the better. We who are involved in Mobile UC are watching these developments carefully as the issues under discussion could have a major impact on how our area progresses.
The FCC voted to initiate notices of inquiry in three areas of the wireless business. The first deals with how to promote innovation in the wireless industry, the second on how to analyze competition in the industry, and the third on how best to provide consumers with information about their mobile service plans. All three initiatives were adopted unanimously by the five-member commission.
A lot of this is technical groundwork looking into what metrics and data the FCC should focus on as it seeks to increase innovation. Given the policy wonk nature of the Beltway set, this is the first step in actually taking meaningful action. The probe will also focus the role the commission should play in repurposing radio spectrum and how to use that spectrum more efficiently. They are also seeking comment on what developments have been made in the move toward IP architectures and the increased use of smartphones and location-based services.
The Google Voice Flap
All of this is set in the context of the growing question of contractual arrangements that provide specific carriers exclusive distribution rights for popular handsets. The most recent flap came with Apple’s refusal to approve a Google Voice application for the iPhone. While names like “Apple” and “Google” draw press coverage, that same rejection was visited on similar applications from GVDialer, GV Mobile and VoiceCentral. In response to inquiries from the FCC regarding who killed Google Voice on the iPhone both Apple and AT&T responded “Who, me?”
Apple stated that it hadn’t actually rejected the application, it just hasn’t approved it. In their words, the concern was that ”The application … appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface, for telephone calls, text messaging, and voicemail.” I guess user choice doesn’t count for much in Cupertino, but wait a second, who “owns” that iPhone anyway?.
AT&T’s response was a 16-page letter to the FCC, the long and the short of which is that the agreement with Apple doesn’t preclude VoIP applications that operate over Wi-Fi, only those that would use the 2G/3G data capability. However, the poor wireless data coverage AT&T has been providing in markets like New York and San Francisco may result in their losing that exclusivity next year.
Impact on Mobile UC
Like most issues in the wireless area, this one is focused primarily on the consumer market, which leads to the obvious question, why should enterprise users care? The answer is that if these kinds of deals are throwing a wrench into the consumer markets, they are creating even greater havoc for the enterprise, particularly initiatives like WLAN voice, fixed-mobile convergence and mobile UC.
The mobile operators’ marketing plans were shaped by the requirements of the consumer market, which are counter to the needs of business users. The three fundamental tenets of those plans are:
- Competition driven by the selection of popular handsets offered rather than the quality of the network service provided.
- Curtailing customer choice by tying the handset to a long-term contract with significant early termination fees
- Defining the rules under which the handset can be used (e.g. no voice over 2G/3G)
This is a game plan that runs completely counter to what we look for in an enterprise contract. Our goals are:
- Secure the best service in each area where we operate
- Arrange the best pricing plan for our actual volumes of usage
- Have the ability to deploy applications, which may call for specific applications or handset models in any of those locations.
We have certainly seen these conflicts in enterprise mobility planning, particularly where RIM is concerned. The RIM experience is most illustrative in that they have far and away the most successful enterprise smartphone in North America (I, for one, still do not consider the iPhone and “enterprise-ready” device). However, RIM’s customer is the mobile operator, not the actual end user, and all too often it appears they are making decisions that serve the immediate customer, not the eventual customer. A few cases in point:
- RIM is fully immersed in the exclusivity game with AT&T getting the Bold, Verizon getting the Storm, and T-Mobile getting the Flip.
- While several BlackBerry models support Wi-Fi, enterprise VoWLAN capability is not supported anywhere in the product line.
- In most cases, Wi-Fi support is limited to data access, but with T-Mobile, there is a voice over WLAN capability, but it only works with T-Mobile’s carrier-based unlicensed mobile access (UMA) service.
- The Storm touch screen model sold through Verizon has no Wi-Fi capability at all, and that one is supposed to compete against the iPhone (there are rumors that a Wi-Fi capable Storm may appear within the next year).
Conclusion - So What Should Mobile UC Vendors Do?
For those of us who were around prior Divestiture, all of this should have a depressingly familiar ring. Once again monopolists (or more correctly “oligopolists”) are defining the agenda and the key tenet is: don’t kill the goose that lays the golden eggs. The mobile operators have had an amazingly successful run under the current plan and change is scary, but the FCC has to look after the interests of consumers as well as the providers.
Just like the old Bell System, the mobile operators will fight tooth and nail to maintain the status quo and with their considerable lobbying budgets, the outcome is far from certain. However, there are some steps mobile UC vendors and wannabes should be taking today:
- Stay appraised of developments on the regulatory front.
- File your own comments with the FCC stating the enterprise case
- Hope for the best; plan for the worst.
- In terms of “planning for the worst”, continue to develop options that do not require dependence on a particular carrier.
- Focus on delivering the best overall user experience in light of the obstacles that have been laid in you path.
We hope the FCC will move quickly but judiciously on their initiatives in the wireless area, but they need to look at the whole market and not just consumer services. There was plenty of needless, government-mandated waste that accompanied Divestiture, but when the dust settled users had more choices, lower prices, and technologies that would have languished for decades in Bell Labs were delivering benefits to millions. So good luck Mr. Genachowski, and please exercise good sense. The goal of enterprise mobility is increased productivity, and our economy desperately needs a boost.