Opening the Wireless Internet: The Importance of Carterfone

Posted by: Spencer Ante on August 03, 2009

Federal Communications Commission chairman Julius Genachowski has come out swinging. You have to applaud his boldness. In the FCC’s first major inquiry since Genachowski took over the agency on June 29, the FCC has launched an inquiry into AT&T Inc. and Apple Inc. over the rejection of Google’s voice application for the Apple iPhone and App store.

On Friday, the FCC sent letters to executives at Apple, Google and AT&T, which is the exclusive carrier for the iPhone in the United States, saying it was “interested in a more complete understanding of this situation.”

The future of the wireless Web may be at stake. As Erick Schonfeld noted in a good TechCrunch post, there are two different Internets: the open landline Internet and the controlled wireless Internet. In the letter, the FCC’s acting Chief of its Wireless Telecommunications Bureau said that the inquiry was being made in conjunction with the FCC’s “ongoing proceedings regarding wireless open access and handset exclusivity.” In those inquiries, companies, including Skype, have asked the FCC to issue a declaratory ruling that the FCC’s so-called Carterfone rules apply to the wireless Internet.

In November of 2007, I wrote about Carterfone and the law professor, Columbia’s Tim Wu, who is trying to get the FCC to follow its landmark precedent requiring that communications networks remain open to any device or application. Wu is the professor who helped inspire Google to form its wireless strategy and petition the FCC to get it to force new wireless spectrum to follow rules of openness.

In February 2007, Wu published a paper in the International Journal of Communication proposing that the FCC apply the industry’s “Carterfone” rules to wireless.

It’s a fascinating case that carries huge implications for today. For decades, AT&T had prohibited consumers from attaching anything but its own phones to its network. In 1968, AT&T tried to bar the use of a “Carterfone”, which linked a mobile radio to a telephone.

But the FCC labeled AT&T’s move “unduly discriminatory” and allowed consumers the right to install devices of their choice. That decision enabled the creation of the fax machine and the Internet modem. Wu wrote: “The same rule for the wireless networks could…stimulate the development of new applications and free equipment designers to make the best phones possible.”

Now it looks AT&T could be getting embroiled in another historic shift. And history, and perhaps popular opinion, do not seem to be on their side once again. Decades ago Carterfone changed the future of communications. Today, Google Voice could stand for another watershed moment.

- Spencer Ante also publishes the Creative Capital blog. Click here to see more.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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