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An Inconsistent Mandate

Would you rather see bad policy applied uniformly or selectively? That’s the question raised by a letter from four House Democrats to the FCC proposing a “single technology mandate” for some cell networks but not for others.

We’ve previously written and filed FCC comments on cell phone mandates in the 700 MHz band, explaining the reasons that the Verizon and AT&T branded iPhones and Androids aren’t fully interoperable; we’ve also suggested things the FCC can do to increase the range of handset choices for subscribers to small, rural cell companies. Technology mandates amount to under-the-table subsidies paid by the customers of big cellular companies and received by the customers of smaller ones and therefore aren’t desirable as they simply rob Peter to pay Paul.

Adding support for additional bands and channels in a cell phone adds to the recurring cost of hardware in the form of additional circuits and antennas, increases power consumption, increases size and weight, and exposes the phone to more interference, especially from TV channel 51. If there were a regulatory requirement for interoperability among all phones sold by all carriers, consumers would not only pay more for their phones, they would also wait longer for upgrades, as each new phone would need to undergo a much more lengthy and costly test and certification process before it could be made available to the market.

The folks who design the leading smart phones for Apple, Samsung, and Motorola Mobility know this, and therefore build in some specialization. Instead of one super phone that’s all things to all people, they produce a small number of variations on a basic design that will work well on specific networks. The cell phone isn’t simply an adjunct to the cellular network as the rotary dial handset was for plain old telephone service, it’s an integrated component of the network. The smartphone’s transmitter and receiver perform the same functions that the transmitter and receiver on a cell tower perform. Neither works without the other, and both need to perform to specification for the network to work.

In case you’re wondering whether the race for smart phone leadership is going to be won by Apple, Samsung, or Motorola in 2013, you’ll need to consider the new entrants: House Democrats Anna Eshoo, Ed Markey, Mike Doyle, and Doris Matsui are taking on the role of smart phone designers as well. Their letter to the FCC asks the Commission to impose a “single technology mandate” in the lower 700 MHz band that would primarily affect LTE phones sold by AT&T for their network in the B Block, but not the LTE phones sold by Verizon for the 700 MHz C Block. So this single technology mandate isn’t really what it says it is, and is in fact arbitrary in its scope.

If it actually were a single technology mandate, we’d be able to analyze it according to the results of Europe’s “single technology mandate” that makes all networks run GSM. Like this Gang of Four, European regulators decreed that cross-network roaming was more important than all other factors and forbade operators from adopting advanced technologies as they came out of the lab. The result? The United States leads the world in LTE adoption, and Europe is a mobile broadband backwater that undergoes a recurring regulatory crisis around each generation of smart phone technology. Nokia, the European company that was once the world leader in smart phones, is a shell of its former self that can no longer sustain its own software platform, for example. It adapted to the dysfunctional European cellular market and lost its ability to compete in the wild.

So single technology mandates are not good, but I doubt the Gang will ever agree to this, regardless of the facts. Some policy positions are immune to facts that are hard to prove, but they shouldn’t be immune to logic, which is designed for proof, after all. If the lawmakers genuinely believe that a single technology mandate is good in the lower 700 MHz band, why stop there? Surely the same logic applies in the upper 700 MHz band, in the 850 & 1800 MHz bands as well as in the 2.5 GHz band and the all-new, super-shareable 3.5 GHz band, doesn’t it? In for a penny, in for a pound.

I suspect that the lawmakers didn’t go for an across-the-board technology mandate because they know that no serious case can be made for one. So the fall back is a divide-and-conquer strategy that imposes additional costs on the purchasers of the more expensive B block licenses in 700 MHz, while providing free benefits to the purchasers of the less costly A block licenses.

This mandate is technically unsound, but more than that it’s arbitrary and superfluous. I’d really like to see the lawmakers withdraw this ill-considered notion before it becomes a precedent that sets the US on the road to a European-style, innovation-killing mobile regulation regime. But maybe they just want to see the FCC get its wings clipped in court again. Whatever the motive, the Congressional proposal seeks to micro-manage a perfectly functional market, and for that reason alone it’s unnecessary.

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