TCS Daily


Why Regulate Web Phones?

By Adam D. Thierer - September 11, 2000 12:00 AM

We've been hearing seemingly endless calls for "open access" regulation throughout the telecommunications sector in recent years. Everybody wants a piece of their competitor's property on terms set by the government. Open access for the local loop; open access to cable systems; open access to the telecom systems in privately-owned buildings; and so on, and so on. Communications industry socialism seems to be all the rage these days.

But the most recent call for open access regulation (let's call it "forced access," which is what it really is) illustrates just how out of control these forced access proposals have become. The USA Today editorial page recently suggested that American policy makers follow the example of their European colleagues and adopt forced access regulations for wireless Web phones services. The USA Today claims that companies like AT&T, Sprint, and Verizon are needlessly restricting user's access to Internet content over their cell phones. Their proposed solution: FCC regulation to dictate to these companies how, and on what terms, they provide Internet access to Web phone users.

Before we let the supposedly benevolent bureaucrats of the Federal Communications Commission take a stab at regulating Internet access through our cell phones, let's ask a simple question: are things really so bad? Cell phone prices are cheap and constantly falling, there's a dizzying array of service plans for consumers to choose from, and the pace of technological innovation in this industry is just stunning.

So what's the problem here? What once were pie-in-the-sky high-tech gadgets that only James Bond supposedly had access to now sit in the pockets of millions of Americans. Teenagers today are more likely to be carrying a cell phone than wearing a watch. And many Americans are now adopting a virtual "wire-free" lifestyle, replacing their old wired telephone and entertainment systems and services with cellular or satellite-based alternatives. In fact, if there's anything consumers lament about today's cell phone industry it's that there are too many options to choose from and that we have to buy new phones every few years to keep up with the latest improvements.

True, Web phones are in their infancy, and users can't expect to get the same sort of Web surfing experience they do at work or home. And companies do restrict content in some ways on their phones, but just how much content can we expect them to carry on a one-inch by one-inch screen? Moreover, you always have the option of switching carriers if you don't like the current Web configuration your cell phone company provides.

Regardless of the current limitations of Web phone access, is this any reason to ask Beltway bureaucrats to start regulating this fast-paced sector? Does anybody really think the same city that brought us $600 hammers and toilet seats can improve the efficiency of America's cell phone industry? Worse yet, if we give the feds the chance to regulate web access over our cell phones, how long will it be before they try to regulate the Internet in other ways?

Let's face it. We Americans are a picky and demanding lot. We expect the best for our money and we usually get it. The same is true for Web phones. With time and a little patience, savvy entrepreneurs will perfect these systems and give us high-tech gadgetry and options that would make 007 drool with envy. Alternatively, turning this responsibility over to Uncle Sam and his FCC G-Men is a recipe for how to destroy a great American industry.

Adam D. Thierer is the Walker Fellow in Economic Policy at the Heritage Foundation in Washington, DC.
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