SCOTT INSKEEP, host:
Now that we've got your mind and your investments in the right place, let's talk about technology, as we do every Monday.
Today we have a story about the rules that govern wireless technology. Here's how the rules work now. If you sign up for service from Verizon, you have to buy a cell phone that Verizon has approved. If you want to switch carriers, you have to buy a new phone.
NPR's Laura Sydell reports that all of that could change.
LAURA SYDELL: This isn't the first time that phone companies have had a say over the phone you'd use. For those old enough to remember, before 1968 you had to get your phone from Ma Bell, and she didn't offer many choices. But that changed, says Google's Chris Sacca.
Mr. CHRIS SACCA (Google): The FCC passed some rules called the Carterfone principles, which allowed you to bring any phone that's complied with the jack standard to go ahead and plug that in, and all of a sudden you saw a boon of innovation. We saw all kinds of cordless phones come into our houses, fax machines. We saw dial-up modems invented.
SYDELL: Sacca thinks there could be just as much innovation in the cell phone market if only the wireless companies didn't have to approve. He's not alone. Dr. Amol Sarva is the CEO and founder of Txtbl. His startup is trying to build an inexpensive mobile device for e-mail but he needs approval from one of the big phone companies or he won't be able to sell it.
Dr. AMOL SARVA (CEO, Txtbl): I've got a big hurdle I have to get over if I want to bring a device like mine to market. I need to prove to the networks that I won't steal their business. I've got to prove I'm big enough to be worth their time.
SYDELL: Sarva thinks customers, not corporations, should decide if they like his device. He's a member of the Wireless Founders Coalition. His group, along with Google and several consumer rights organizations, are asking the FCC to require the winning bidders in an upcoming auction of wireless spectrum to open up their networks to all devices. The existing phone companies and likely auction bidders think openness is a bad idea.
John Walls is with CTIA, a wireless industry trade group. He says that a company like Sprint has to be able to approve devices that use its network.
Mr. JOHN WALLS (Vice President, Public Affairs, CTIA): If I have an application that's running on my device that causes an iota of disruption or interference, I very likely run the risk of interfering or disrupting the service of tens or hundreds people in my immediate vicinity or maybe even more down the line.
SYDELL: But consumer groups don't buy Walls' argument. Back in 1968, the phone company claimed that if you could use whatever phone you wanted, it would mess up their network, and it didn't happen.
There's another issue. Google and other consumer groups want there to be more than the big four in the market: Verizon, T-Mobile, Sprint, and AT&T. In the upcoming auction they want the FCC to require winning bidders to rent parts of their networks to competitors. Gigi Sohn is president of the consumer rights group, Public Knowledge.
Ms. GIGI SOHN (President, Public Knowledge): We're saying on this chunk of spectrum we want openness, openness of every kind and the ability for competitors, no matter how big or how small, to come in, lease capacity at wholesale rates, and provide a variety of services.
SYDELL: There is competition, says Walls of the wireless industry group. And this auction is an opportunity for more companies to enter the market.
Mr. WALLS: Wireless broadband space, as far as a competitive space is concerned, is alive and will be doing quite, quite well in the very near future.
SYDELL: Walls says if wireless carriers are forced to open up their networks, they aren't likely to bid as much for them, and so the taxpayers will make less money from the auction. So Google has offered to bid at least $4.6 billion if the FCC requires open networks. Chris Sacca, head of special initiatives at Google, admits they don't want to have to go to wireless companies for approval if they want to reach customers on their cell phones and PDAs.
Mr. SACCA: What we fear is that in an uncompetitive environment where the carriers control the destination sites that you the user choose, you won't have the opportunity to choose us. In that situation, we suffer and you suffer.
SYDELL: The FCC is expected to announce the rules for bidders tomorrow. The auction will take place early next year.
Laura Sydell, NPR News.
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