In June, 2008, my colleague Berin Szoka and I wrote a short piece urging the FCC to refrain from prohibiting the sorts of wireless handset exclusivity deals that brought us innovative "smart phones" like the Apple iPhone (AT&T), Samsung Ace (Sprint Nextel) and Samsung Katalyst (T-Mobile), as well as the recently announced Google (T-Mobile) G1. Some rural cellular companies, through the Rural Cellular Association (RCA), have been trying to prohibit such exclusive deals, and have not only petitioned the FCC for a rulemaking aimed at prohibiting these contractual arrangements, but have also raised the issue in several unrelated proceedings, including the FCC's reviews of the proposed merger of Verizon Wireless and ALLTEL and joint venture of Sprint Nextel Corporation and Clearwire Corporation.

The complaint of the rural cellular companies is that the exclusives have the effect of essentially shutting them out of the burgeoning market for advanced wireless services and equipment, and that they need government intervention to compete. We urged the FCC to refrain from taking action on the RCA petition, suggesting instead that rural wireless players get together, pool their resources, and work with handset manufacturers to develop their own smart phones. RCR Wireless now reports that small carriers may be doing just that by forming NextGen Mobile, LLC, a consortium of more than two dozen existing GSM mobile operators and winners of advanced wireless services (AWS) and 700 MHz licenses in recent FCC auctions.

According to the report, all members of NextGen Mobile operate, or anticipate operating, networks based on the Global System for Mobile (GSM) family of technologies, including 3G Universal Mobile Telecommunications System (UMTS) technologies and eventually the next-generation Long Term Evolution (LTE) technologies. In addition to achieving economies of scope and scale for its members in terms of RF optimization, billing, customer care, roaming and network operations, NextGen Mobile will enable the smaller operators to influence the development of smart phones:

"Hasn't Steve Jobs learned anything in the last 30 years?" asks Farhad Manjoo of Slate in an interesting piece about "The Cell Phone Wars" currently raging between Apple's iPhone and the Google's new G1, Android-based phone. Manjoo wonders if whether Steve Jobs remembers what happen the last time he closed up a platform: "because Apple closed its platform, it was IBM, Dell, HP, and especially Microsoft that reaped the benefits of Apple's innovations." Thus, if Jobs didn't learn his lesson, will he now with the iPhone? Manjoo continues: Well, maybe he has--and maybe he's betting that these days, "openness" is overrated. For one thing, an open platform is much more technically complex than a closed one. Your Windows computer crashes more often than your Mac computer because--among many other reasons--Windows has to accommodate a wider variety of hardware. Dell's machines use different hard drives and graphics cards and memory chips than Gateway's, and they're both different from Lenovo's. The Mac OS, meanwhile, has to work on just a small range of Apple's rigorously tested internal components--which is part of the reason it can run so smoothly. And why is your PC glutted with viruses and spyware? The same openness that makes a platform attractive to legitimate developers makes it a target for illegitimate ones. I discussed these issues in greater detail in my essay on"Apple, Openness, and the Zittrain Thesis" and in a follow-up essay about how the Apple iPhone 2.0 was cracked in mere hours. My point in these and other essays is that the whole "open vs. closed" dichotomy is greatly overplayed. Each has its benefits and drawbacks, but there is no reason we need to make a false choice between the two for the sake of "the future of the Net" or anything like that. In fact, the hybrid world we live in -- full of a wide variety of open and proprietary platforms, networks, and solutions -- presents us with the best of all worlds. As I argued in my original review of Jonathan Zittrain's book, "Hybrid solutions often make a great deal of sense. They offer creative opportunities within certain confines in an attempt to balance openness and stability." It's a sign of great progress that we now have different open vs. closed models that appeal to different types of users. It's a false choice to imagine that we need to choose between these various models.

Portland's muni wi-fi experiment has failed. [Add it to the list of failures]. According to Broadband Reports, taxpayers are going to be on the line for $60K:

Portland had high hopes of being one of those cities where citywide wireless networks might actually work but those hopes did not pan out. Earlier this summer, Wi-Fi provider MetroFi announced that the company could not afford to continue operating the network there. Attempts to sell it off failed and the network was shut down. That's not the end of the story, though. In order to launch the network, MetroFi had to set up 600 (arguably unsightly) antennas throughout the city. The company had claimed that these antennas would be removed by the end of July but they remain up; MetroFi says that they still plan to follow through on removing them but city staff members report fears that the company is too strapped for cash to keep their end of this bargain. Estimates for removal are around $90,000; subtracting out a $30,000 bond for removal that was part of the MetroFi contract would still mean that Portland's taxpayers could pay up to $60,000 to get those antennas taken down.

A few days ago, I posted an essay about the recent history of "moral panics," or "technopanics," as Alice Marwick refers to them in her brilliant new article about the recent panic over MySpace and social networking sites in general.

I got thinking about technopanics again today after reading the Washington Post's front-page article, "When the Phone Goes With You, Everyone Else Can Tag Along." In the piece, Post staff writer Ellen Nakashima discusses the rise of mobile geo-location technologies and services, which are becoming more prevalent as cell phones grow more sophisticated. These services are often referred to as "LBS," which stands for "location-based services."

Many of phones and service plans offered today include LBS technologies, which are very useful for parents like me who might want to monitor the movement of their children. Those same geo-location technologies can be used for other LBS purposes. Geo-location technologies are now being married to social networking utilities to create an entirely new service and industry: "social mapping." Social mapping allows subscribers to find their friends on a digital map and then instantly network with them. Companies such as Loopt and Helio have already rolled out commercial social mapping services. Loopt has also partnered with major carriers to roll out its service nationwide, including the new iPhone 3G. It is likely that many other rivals will join these firms in coming months and years.

These new LBS services present exciting opportunities for users to network with friends and family, and it also open up a new world of commercial / advertising opportunities. Think of how stores could offer instantaneous coupons as you walk by their stores, for example. And very soon, you can imagine a world were many of our traditional social networking sites and services are linked into LBS tools in a seamless fashion. But as today's Washington Post article notes, mobile geo-location and social mapping is also raising some privacy concerns:

Oakland Wireless appears to be in trouble. Add it to the list.

[Actually, is anyone out there keeping a running tally of the muni failures? If so, let me know so I can just start linking to it instead of all the random blog links. ]

Global handset manufacturing giant Nokia has purchased the shares they didn't already own in Symbian, Ltd., the company formed in 1998 as a partnership among Ericsson, Nokia, Motorola and Psion and the developer of the Symbian mobile operating system, by far the world's leading OS for "smart mobile" phones with 67% of the market, followed by Microsoft on 13%, with RIM on 10% (source).

But wait, there's more (per Engadget)!

Here's where it gets interesting, though: rather than taking Symbian's intellectual private for Nokia's own benefit, the goods will be turned over to the Symbian Foundation, a nonprofit whose sole goal will be the advancement of the Symbian platform in its many flavors. Motorola and Sony Ericsson have signed up to contribute UIQ assets, while NTT DoCoMo (which uses Symbian-based wares in a number of its phones) will be donating code as well.

Other Symbian Foundation members include Texas Instruments, Vodafone, Samsung, LG, and AT&T (yep, the same AT&T that currently sells precisely one Symbian-based phone), so things could get interesting. The move clearly seems to be a preemptive strike against Google's Open Handset Alliance, LiMo, and other collaborative efforts forming around the globe with the goal of standardizing smartphone operating systems; the writing was on the wall, and Symbian didn't want to miss the train. Total cash outlay for the move will run Nokia roughly €264 million -- about $410 million in yankee currency.

Other reports note that the Symbian Foundation will eventually take Symbian open source, and that this move is as much as response to Apple's closed iPhone platform as it is to Gogole's open Android and LiMo platforms. (Although it is intriguing to note that AT&T, Apple's exclusive U.S. partner for the iPhone, is among the backers of the new Symbian Foundation, perhaps indicating that even AT&T is hedging its bets.)

The fact that we will soon see three open source platforms (counting Google's Android and LiMo) competing for market share provides yet another measure of the exceptionally high degree of competition in the wireless industry.

One should avoid clichés like the plague. But there is little in ecclesiastical wisdom that can match the old saw about there being no such thing as a free lunch. Goods and services come at a price. If a consumer wants to impress her friends with her high-end mobile phone, she had better be willing to part with cash sufficient to compensate the maker of that phone. A football fan with dreams of sampling all of the different games available each Sunday on DIRECTV should not be surprised to find that a good deal of equipment must be installed before he will ever see the first kickoff – equipment that DIRECT does not provide gratia placenti. Consumers must pay for what they would consume.

This simple truth appears to have been lost on a few “consumer advocates” who object to the imposition of early termination fees, or “ETFs,” when consumers cancel service contracts without having fulfilled the terms of their bargain. For, in fact, the use of service contracts and associated ETFs is merely a mechanism for spreading costs over an extended period rather than requiring consumers to bear them in the form of a one-time fee.

To extend the examples above, smartphone and DBS service both require consumers to have fairly sophisticated end-user equipment. If one were simply to purchase a high-end mobile device, the retail price would run into the several hundreds of dollars. Similarly, the need for a parabolic antenna, set-top box, and the labor for installation required to receive DBS service suggest a substantial upfront consumer investment before any actual service can be received.

Service contracts and ETFs provide an alternative. A smartphone that may have cost our hypothetical consumer $500 had she purchased it as a stand-alone device might be provided for only a few dollars in conjunction with a one-year commitment to a particular carrier’s service – allowing the carrier to recover the full cost of that smartphone over the period of the contract. Rather than pay DIRECTV an initial equipment and installation charge of several hundred dollars, our football fan can instead amortize those costs over a year or more in conjunction with a service contract. Naturally, however, to the extent a consumer wants to opt out of any such contract, he or she should reasonably expect the affected service provider to demand recompense for the upfront investment necessary to provide service.

In a new PFF essay, my colleague Barbara Esbin and I address a recent petition filed by the Rural Cellular Association (RCA) asking the FCC to prohibit exclusive arrangements between wireless handset producers and carriers. The RCA petition claims that large wireless companies have an unfair market advantage by giving their customers exclusive access to certain advanced smart phones, such as the Apple/AT&T iPhone—and that this anticompetitive practice is harmful to rural consumers served by RCA members.

In the piece, we debunk RCA's arguments premised on a supposed lack of competition in wireless markets. RCA will likely now redouble these arguments by pointing to Verizon’s planned acquisition of Alltel (by far the smallest of the “Big 5” carriers), which was announced the day our piece was published. But even with four large carriers instead of five, the wireless market remains vibrantly competitive—especially as compared to 1992, when the FCC decided that even the two-carrier market was “extremely competitive,” and rejecting arguments that it ban exclusive handset arrangements.

With yesterday's big iPhone 3G announcement, we continue to see an acceleration in wireless innovation. Apple's Steve Jobs gets the headlines, but don't forget how these mobile phone miracles affect the macro productivity of the U.S. and world economies.

A new Ovum study by economist Roger Entner estimates the existing productivity enhancements of broadband wireless. He also projects that by 2016 "the value of the combined mobile wireless voice and broadband productivity gains to the U.S. economy -- $427 billion per year -- will exceed today's motor vehicle manufacturing and pharmaceutical industries combined."

More from the executive summary:

• In 2004, mobile voice services generated productivity gains to the U.S. economy worth $157 billion per year.

• In 2005, mobile wireless broadband services generated productivity gains to the U.S. economy worth $28 billion per year.

• In 2005, the productivity value of all mobile wireless services was worth $185 billion, greater than the total value of the U.S. pharmaceutical industry (according to
BizStats.com).

• Between 2004 and 2005, the productivity enhancements generated by the use of mobile wireless broadband tripled in value.

• In 2005, 68.8 million US enterprise users had mobile wireless services, with only a quarter using mobile wireless broadband. By 2016, the US is projected to have 81.9 million mobile enterprise users, with 83 percent using wireless broadband.

• Health care and small businesses are the big winners. In 2005, productivity
improvements due to use of mobile broadband solutions across the U.S. health care industry were worth almost $6.9 billion. By 2016, that number will triple to $27.2 billion, or twice the size (according to Bizstats.com) of the current vocational rehabilitation sector of the health care industry. As demonstrated in several case studies provided in this Report, small businesses are uniquely empowered by implementation and use of wireless broadband technologies and applications.

• To put this information into context, consider that by 2016, the value of the combined mobile wireless voice and broadband productivity gains to the US economy -- $427 billion per year -- will exceed today’s motor vehicle manufacturing and pharmaceutical industries combined.

With wireless already a key driver of U.S. economic growth, and about to bring radical new efficiencies to huge industries like health care, all the more reason the FCC should stop its bizarre new spectrum policy of dictating specific business plans and micromanaging content, services, applications, and technology platforms.

The irony keeps pouring in. On a day when the nation's two largest wireless phone companies announced new unlimited flat-rate calling plans...

Verizon Wireless unveiled an unlimited flat-rate calling plan on Tuesday in a bid to attract high-end customers.

Rival AT&T Inc. announced a similar effort hours later.

Under Verizon Wireless's plan, for $99 a month subscribers can use their cellphones to call anyone in the U.S. at any time. AT&T will charge $99.99, with the plan available on all devices and roaming charges being eliminated.

...we also get word that Rep. Ed Markey is circulating a draft of a bill that would comprehensively regulate the wireless industry to protect consumers from this gross competition and unconscionably low prices served up by the providers of mobile communications services. Markey thinks mobile phones are menacing. I study this stuff for a living, and I still think they are pretty miraculous.