Tying, subsidizing, and IMS

In response to my post a couple of days ago about the possibility that VZ might not plan to comply with the 700 MHz “open platform” rules, someone wrote:

would you have the FCC mandate that every mobile device must be capable of running every operating system? If Verizon sells me a BlackBerry, should the device allow me to install Android, Palm OS, Windows Mobile, or Symbian OS? Obviously, Google believes the answer is yes (they will make the most money if they can install their OS on every device). Is it good for consumers if the FCC starts managing software specifications for computers and mobile devices?

Here’s the problem that the question doesn’t aknowledge: VZ controls its network AND markets devices, and would like to tie the two together. The Google petition suggests that VZ plans to give its subsidized devices exclusive “better” access rights to its network (we don’t know in what way) than other, non-VZ-connected devices. VZ also plans to “cripple” the devices it provides (or “optimize” them) to run only the applications and operating systems and everything else it wants to offer. This isn’t good for anyone other than VZ, and puts VZ in control of innovation in both devices and applications.

Marketing differently-abled devices is obviously fine in the abstract. The problem here is that if VZ can say “only our devices will work well with our network,” “only our devices can be subsidized in the way you’re used to,” and “you can do only X, Y, and Z with these devices, but don’t worry, they’re cheap,” they will have successfully returned us to the pre-Carterfone days. Without Carterfone, we wouldn’t have had modems. Without modems, we wouldn’t have had the commercial internet. That’s why we should be deeply concerned about VZ’s plans.

The problem is that VZ is a dominant, vertically-integrated network operator and device-provider. This isn’t any old new-gadget-maker — it’s Ma Bell, reconstituted.

VZ will say: Trust us. We’re here to provide the best possible consumer experience. Why would we ever do anything that would interfere with all possible uses of our network? Don’t force us to allow all devices to use our network — that will squelch our wildly-innovative nature.

Well, VZ has every incentive to compete with the open internet. They can’t adequately monetize the open internet. So the point of the “open platform” conditions, weak and game-able as they were, was to de-link network provision from both device-provision and application-provision. Now it appears that VZ may argue that those links are necessary in order for their network to work properly.

Now, I’m not saying that government drafting specs is generally a good idea — but to characterize the certification of Part 15 devices (say) as the drafting of specs is unfair. To the extent there is a need for ANY specifications for attachment to internet access, and perhaps there may be for wireless access, there is a role for government to come up (in cooperation with all netops) with a standard set of specs for devices that are permitted to attach to highspeed networks, to work to ensure that those specs don’t allow the network operators to discriminate in ways that serve its revenue plans, and then to police an effective de-linking of devices from network-provision.

Here’s why this is so important: VZ plans to overlay on all of its networks, wired, fiber, and wireless, a cell-phone-like-billing-system called IMS. IMS comes in many guises and isn’t fully baked yet (I believe, but who knows), but it’s a child of the mobile phone system. It allows for discrimination and billing and other “management” efforts that VZ thinks are appropriate. Add IMS together with network-provision and subsidized-device-provision, and you’ve achieved the traditional telephone model: a fully-managed network, where everything requires permission and can be billed for perfectly.

That’s not the internet.

Cross-posted from Susan Crawford blog.