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News

Mossberg: Cellphone Carriers are Soviet Ministries

The federal government has been bullied by the big wireless carriers, and, as a result, the U.S. is the laughtingstock of the mobile technology world, according to Walt Mossberg at the Wall Street Journal on Monday.

Mr. Mossberg compared the PC industry, which is a model of digital capitalism to the mobile phone system which has "trapped its citizens in a backward, stifling system when it comes to the next great technology platform, the cellphone," the noted WSJ writer observed.

While ISPs in the U.S. simply charge for bandwidth, the big wireless carriers control every aspect of the mobile phone usage. "Whether you are a consumer, a hardware maker, a software developer or a provider of cool new services, it’s hard to make a move in the American cellphone world without the permission of the companies that own the pipes," Mr. Mossberg lamented. "While power in other technology sectors flows to consumers and nimble entrepreneurs, in the cellphone arena it remains squarely in the hands of the giant carriers.

As a result, Mr. Mossberg refers to the big cell phone carriers as the "Soviet Ministries." Like those old bureaucracies, they break the link between the producers and the consumers.

"...Apple had to make a deal with the devil to gain the freedom to offer an unimpaired product directly to users. It gave AT&T exclusive rights to be the iPhone’s U.S. network for an undisclosed period of years. It has locked and relocked the phone to make sure consumers can’t override that restriction," Mr. Mossberg noted.

The federal government, according to Mr. Mossberg, deserves the blame here. Not only have they failed to insure a free market, but they failed to set a single wireless standard, such as [Europe did with] GSM, didn’t requires CDMA phones to have a removable SIM card, and have allowed the carriers to lock the SIM card to their service.

Mr. Mossberg recalled the time when AT&T controlled the land lines in the U.S. and customers couldn’t connect their own phones to it. Eventually, the federal government broke up that market, and it didn’t collapse. If the federal government, or another disruptive technology, were to do the same with cellphones, a free market would also thrive, Mr. Mossberg said.

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