global moves toward mobile ‘openness’: unpacking the concept, honing a frame

Global moves toward Global moves toward mobile ‘openness’:mobile ‘openness’:

Unpacking the concept, Unpacking the concept, honing a framehoning a frame

[PRELIMINARY VERSION: PLEASE DO NOT CITE][PRELIMINARY VERSION: PLEASE DO NOT CITE]Russell Newman & Cara WallisRussell Newman & Cara Wallis

(with input from Wally Baer & Francois Bar)(with input from Wally Baer & Francois Bar)

GLOBAL MOVES TOWARD MOBILE ‘OPENNESS’GLOBAL MOVES TOWARD MOBILE ‘OPENNESS’

Introduction: FCC Chairman Martin makes an announcement

Skype: Petitions the FCC in 2007 to allow attachment of any device to a wireless network (not full net neutrality of any stripe)


Introduction: FCC Chairman Martin makes an announcement

"In light of the industry's embrace of this more open approach, I think it's premature for the commission to place any other requirements on these networks," Martin said. "Today I'm going to circulate to my fellow commissioners an order dismissing the petition by Skype that would apply Carterfone requirements to existing wireless networks.” (AP, April 1)

Regarding Skype’s request:


“Openness” has been in the news a great deal

• User to user: Verizon restricts NARAL ability to message its members

• User choice of applications and content: Comcast restricts BitTorrent traffic

• Driving user decisions: Verizon’s own ‘error’ page online for malformed web addresses sought

• Restricting provider-provided content: AT&T censors Eddie Vedder’s anti-Bush comments in “Blue Room” concert


Unpacking ‘openness’: a start

• Devices: What can I use aboard a network? What devices might developers offer to users over a network?

• Functionality: What can my device do? What services can be offered that complement or extend device capabilties?

• Connectivity: What can I access? Can users access services of alternative providers?

• Customization / Content: What can I create or obtain from others? What can application developers offer for particular devices aboard particular networks?


Three levels of mobile ‘openness’

• Technological: What is possible with a device.

• Strategic: What do providers of that service/device permit or restrict me from doing with a device.

• Policy: What regulations or regulatory structures permit or restrict me from doing with it.

• (Others: Cost, technical know-how, accessibility…)


‘Openness”: Tacking a concept down

• Effectively, the wireline world is evidencing movements toward “closure”

• In the meantime, the wireless world is, in some ways, ‘opening up’. But to what extent? Is there a ‘convergence’ in the offing, or is this best theorized as two realms developing in parallel and in reaction to events in each one?

A couple narratives are thus in play, particularly in the US.


Evolution of openness in U.S. wireline networks

• Carterfone (1968) opened AT&T network to other devices

• MCI decision (1969) opened competition in long-distance

• Telco Act of 1996 sought to increase wireline competition

• Brand X decision (2005) said cable operators don’t have to open their networks to competitors

• SBC/AT&T, Verizon/MCI merger conditions (2005); AT&T/Bellsouth (2006)

• Net neutrality debate centers on broadband openness

A set of openings, then movements toward consolidation and potential closure:


The wireless world: movements toward ‘open’?

• Verizon’s November, 2007 / March 2008 announcements

• Google Android

• AT&T’s announcement of November 2007

A couple developments in the last year:


The state of play: wireless v. wireline

We may compare, first, the state of play in wireless to that of wireline; this is a conception as of early 2007, as described by Wu (2007).



1. Devices: What can I use aboard a network?

Wireless (Wu, 2007)Wireline

Technical barriers: network standards

Interface with modem provided by provider;

ethernet

Standards non-interoperable and inconsistent

[CDMA (Verizon), GSM (AT&T, T-Mobile), PCS (Sprint)]

Strategic barriers: device controls

Modem does not limit attachments; Carterfone

applies

Carriers approve/disapprove devices. "Whitelisting"; phones

locked by provider

Consumers unaware



2. Functionality: What can my device do?


Strategic: Physical barriers

Carriers do not exercise control

Carriers allow/disallow features (e.g., crippling of WiFi); add

undesired features.

Strategic: Physical/software interface barriers

Device features not directly controlled…

Functionality (photo-sharing - device-to-device control, data limits)

controlled by carriers

Strategic: Software barriers

Unrestrictive in theory, depending on need to

connect to network

Carriers control software driven capabilities of devices



3. Connectivity: What can I access?


Technical: standards barriers

TCP/IPGSM and CDMA providers utilize

different, non-interoperable systems (EVDO/EDGE, HSDPA)

Strategic: bandwidth usage

Present billing model: unlimited (to a limit) Bandwidth limits on all usage

Strategic: service access

Unrestricted in theory; in practice, determined by

provider motivations

Carrier determines accessible features; perhaps blocking /

degrading



4. Customization / Content: What can I create or obtain from others?


Technical/strategic:access to underlying

technology

No permissions required (putting aside DMCA)

No access to underlying hardware; selective access to Application

Programming Interfaces; cost of 'shortcode'

Strategic/Technical:platform standards

Readily accessible; in Web development, quirks between browsers

Multiple standards across providers; some prequalifications, testing

Strategic:permissions

Cost of server space

Developer qualifications/approval requirements expensive;

negotiations and requirements not standardized; lengthy waits for

permissions

Strategic:developed feature

usage

Open to degree decided by developer, cracked, or

reverse engineered (DMCA too)

Alternative uses of features disallowed by provider; decency restrictions; fees of feature use


Verizon’s Nov. 2007 announcement

• Verizon holds conference for developers, issues preliminary expectations

• Verizon to determine what devices meet ‘minimum technical standard’ in new “$20 million lab”

• Current average wait time for approval at present: 20 months (BusinessWeek, Mar. 20); Verizon claims will now be 4 weeks

• November 2007: “Any application the user chooses will be allowed on these devices”; March 2008: “Will not approve, test, or service third-party applications that customers load onto their Open Development Devices” (BusWk, Mar 20)

• Will continue providing own services; pricing schemes for new, approved devices not revealed


Considering the 700 MHz auction:

• Verizon won the prime “C-Block” which had open-devices / applications stipulations applied

• Recall: Verizon sued; then backed off, Cellular Telecommunications and Internet Association takes up the cause

• Skeptics on the requirements: Susan Crawford notes “reasonable network management” allows some locking/blocking; approval process controlled by provider

• Verizon essentially matching these requirements, it seems…


Google / OHA’s Android

• New platform Google and the “Open Handset Alliance” will ‘give away’ to mobile providers; leaves it to others to bring devices to market

• Open Handset Alliance: major mobile operators, semiconductor companies, handset manufacturers, software companies, “commercialization companies”

• Linux kernel, but developments under ‘permissive’ license: can make applications proprietary

• Java will be the language utilized via this interface; offers access to underlying features (SMS, calendar, maps, etc)

• Encourages ‘mashups’ across applications

• To jumpstart, $10 million challenge issued


AT&T makes an announcement

• Announces in November it has “flung its network wide open” on heels of Verizon’s announcement

• No real change: reflects GSM standard already in use


Comparisons: Early 2007 vs. new initiatives

1. Devices: What can I use aboard a network?

Wireless (Wu, 2007)Verizon,

Nov 2007 / Mar 2008Google/OHAAndroid

Technical barriers: network standards

Standards non-interoperable and inconsistent

[CDMA (Verizon), GSM (AT&T, T-Mobile), PCS (Sprint)]

Little change. Will publish 'own standards' to interact

with network (on top of CDMA standard?)

Potentially more open. Android intended to be

applicable across cellular telephony standards

Strategic barriers: device controls

Carriers approve/disapprove devices. "Whitelisting"; phones

locked by provider

Consumers unaware

Little change. Reserves right to 'test' devices and

approve

Little change. Device manufacturers still at whim

of provider



2. Functionality: What can my device do?



Strategic: Physical barriers

Carriers allow/disallow features (e.g., crippling of WiFi); add

undesired features.

Little change. (VZ retains right to change its specs) No change.

Strategic: Physical/software interface barriers

Functionality (photo-sharing - device-to-device control, data limits) controlled by carriers

No change.

Potentially more open. Willingness of providers to

allow platform uses to proliferate to be seen

Strategic: Software barriers

Carriers control software driven capabilities of devices

Potentially more open. Allows unaffiliated content and applications, subject to

approval

Open to all comers in theory; connectivity

determined by provider motivations



3. Connectivity: What can I access?



Technical: standards barriers

GSM and CDMA providers utilize different, non-interoperable systems

(EVDO/EDGE, HSDPA)

No change. Requires interoperability determined

by VerizonPotentially open.

Strategic: bandwidth usage

Bandwidth limits on all usage No change. No change.

Strategic: service access

Carrier determines accessible features; perhaps blocking /

degrading

No change. (Verizon will wholesale

access to device makers for resale, however)

No change.


Comparisons: Early 2007 vs. new initiatives4. Customization / Content: What can I create or obtain from others?



Technical/strategic:access to underlying

technology

No access to underlying hardware; selective access to Application

Programming Interfaces; cost of 'shortcode'

No change.API gives direct access

to certain underlying features.

Strategic/Technical:platform standards

Multiple standards across providers; some prequalifications,

testingNo change. Standardized and open.

Strategic:permissions

Developer qualifications/approval requirements expensive;

negotiations and requirements not standardized; lengthy waits for

permissions

No change.Barring others changing

development process, same issues apply; likely waits for

permissions.

Potentially open in theory, subject to desires

of host provider

Strategic:developed feature

usage

Alternative uses of features disallowed by provider; decency restrictions; fees of feature use

No change. No change.


Verizon complicates the story, but only a little:

• Verizon announces it will accept Android as a platform, late 2007

• But this means little


Adding some other nuance:

• AT&T: While they do lock down phones, it is possible (with effort) to swap out SIM cards between devices

• Mobile Virtual Network Operators [MVNOs] such as Boost do make it possible to upload software to phones.

• Key takeaway: Current ‘openness’ requires effort many won’t undertake

• Key takeaway 2: MVNOs themselves are a dying breed…


So we ‘open’ a bit…

• Some baseline shift toward openness aboard wireless networks: more access to networks for device makers (Verizon), more access to interfaces for applications developers (Android)


But it’s no sea change by any stretch

• No new access to new providers

• Providers can continue crippling devices (even wireless auction aside: rules not yet set in stone for Verizon, and practicalities are important there)

• Bandwidth limits remain, limiting functionality

• User agreement restrictions remain

• Underlying networks still able to degrade traffic of ‘undersirable’ applications, content

• Does nothing to resolve questions of expanding access and other dimensions of equity.


Closing thoughts: at one level

• ‘Openness’ is inextricably linked to underlying networks. Owners of networks still exercise ultimate control; whatever ‘convergence’ is happening is on providers’ terms

• Markets play a role… Influence of international business at play too? Google’s moves, iPhone factors for sure…

• …but it’s not just ‘market forces.’ Cannot ignore public involvement: 26,000 comments in FCC auction-rules proceeding; comments to legislators. Chairman Martin calls advocates to office to “back off”

• Pre-empting regulation? Moves to ‘self-regulate’ before overt regulation?


Closing thoughts: moving to other levels

• Nonetheless, establishing a normative “most open” delineation remains a challenge

• “Openness” contained herein is largely technologically-driven: is this even the appropriate frame as we expand our view?

• What should drive notions of ‘openness’?

• A look to China: what do we see there?


The View from ChinaThe View from China


Some Basics about China’s Wireless Industry:

• Mobile communication is the most profitable subsector of the Chinese telecommunications market.

• China has the largest number of mobile phone subscribers in the world: 556.23 million as of the end of February 2008; about 42% of the population.

• Up from 398 million at the end of 2006.

• 592.1 billion text messages sent last year (an average of 1.6 billion per day), generating $22.2 million for the two mobile operators.


Some Basics about China’s Wireless Industry:

• Two state-controlled companies:

• China Mobile (the incumbent) with 373.4 million subscribers as of Feb. 2008, with about a 68% share of the mainland mobile phone market. It is the largest mobile phone operator in the world.

• China Unicom, with about 182 million subscribers. It is the third largest mobile phone operator in the world.


Openness: Devices

• China Mobile and China Unicom both run a GSM network.

• China Unicom also has a 2.5G CDMA network, accounting for about 25% of its total customers.

• China Unicom sells dual band handsets, but they are pricey: about $500.

• Almost all phones in China are sold unlocked (and CDMA phones in China also use SIM cards).


Openness: Devices

• For the most part, you can use any phone with either operator.

• But sometimes this can depend on whether the customer uses pre-paid or a service contract.

• Increasingly there is mimicking by both operators of the U.S. method of bundling subscription services with certain handsets:

• e.g. Research in Motion Blackberry deal with China Mobile.


Openness: Functionality, Connectivity

• Carriers do not disallow features that are in phones.

• Carriers do not control functionality (e.g. photo-sharing).

• Most users do not use high-end features, services.

• SMS, voice calling, games, and (increasingly) mobile music are the most widely used functions.

• Bandwidth limits.


Openness: Content

• Mobile operators attempt to block spam, porn

• “Text-message gate”

• CEO of China Mobile Wang Jianzhou’s recent comment at the World Economic Forum in Davos.

• Communications Short Message Service Management Regulations


The Future?

• China Mobile is a member of the Open Handset Alliance.

• Impending restructuring of China’s telecom industry in anticipation of rollout of 3G technology, in particular China’s own 3G standard: TD-SCDMA.

• China anticipated to have 30 million 3G customers by 2011, of which 17 million will use TD-SCDMA.


China’s telecom industry restructuring:

• China Unicom’s CDMA network will be acquired by China Telecom (a fixed-line provider).

• The remainder of China Unicom will merge with China Netcom (another fixed-line provider) and operate a GSM network.

• China Mobile will merge with China Tietong (a small fixed-line firm).

• The result will be three full-service telecom operators (each with fixed-line and mobile).


China’s telecom industry restructuring:

• Each of these three full-service telecom operators will then be ready to receive a license for one of the 3G standards.

• China Telecom - CDMA2000

• China Netcom/Unicom - WCDMA

• China Mobile - TD-SCDMA (which is undergoing trials in major cities in China right now, raising concerns about “technology neutrality” since other 3G technologies are being delayed while this one “matures”).


Perhaps another way to imagine openness:

• User resistance:

• iPhone example: Though talks between Steve Jobs and China Mobile stalled, according to China Mobile, by the end of last year there were as many as 400,000 iPhones (cracked and unlocked) being used on the company’s network, over 10% of total worldwide iPhone shipments.


Perhaps another way to imagine openness:

• Creativity at the margins:• Domestic handset manufacturers and innovation (e.g. 2-SIM card phone)

• Brandless phones

• Repair shops


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global moves toward mobile ‘openness’: unpacking the concept, honing a frame

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