Sharing the Risks of Wireless Innovation

October 19, 2009
Should wireless handset manufacturers like Apple and Palm be forbidden to share innovation risks with network operators? Congress and the FCC have been besieged by advocates seeking a ban on the marketing arrangements that make risk-sharing possible, but the technology mandate necessary to accomplish the goal would impair innovation.

Advocates of net neutrality took the battle for control of the Internet into the wireless space in 2007 with the publication of Tim Wu’s “Wireless Carterfone” paper on barriers to wireless application development. 100,000 applications later, the FCC and Congress are once again besieged with demands for free access to wireless data networks by all kinds of devices. Is the battle to put all devices on all networks beneficial (not to mention practical)? The use of diverse cellular technologies in the United States suggests that it’s not, and the large trend in the wireless space from simple phones to smart, software-intensive platforms like the iPhone and the Palm Pre suggests that it’s yesterday’s war. ITIF Research Fellow Richard Bennett analyzes trends in mobile technology and finds current regulations more than sufficient to promote continued innovation.