Cell Phone Company Cronyism

Cell Phone SC Cell Phone Company Cronyism

When my late father (a card carrying member of America’s greatest generation) came home from World War II, there was a new industry being born.

Television was just waiting for the resources that were being taken up by the war effort to spread its wings.

Imagine, radio with pictures!  It must have really been amazing at the time.

I was born about four months before the end of the Korean war, and I have no memory of living in a house without a television (although I do remember that the first television I watched was a Magnavox console model with a radio and a phonograph built in.  Black and white, of course.)

Today, I carry not one but two little television sets in my pocket, almost at all times.

Oh, I’m sure that most people don’t think of their iPhones or their Android smartphones as TV sets, but they are.

The other night, Louisville won the NCAA tournament in a great game over Michigan.  The game was on CBS.  And also on my little pocket TV sets masquerading as iPhones.

Had I happened to be in rural Nevada, within reach of a cellular tower, I could have watched that game just as I watched it on Channel 2 on my big screen in my living room near Reno.

This sort of cross platform video brings with it two problems that need to be sorted out; and, as usual, it is competitors lobbying the government to stop progress which is standing in the way.

Let’s start with that cell tower.  And AT&T. (They’re the good guys in this story.)

Now AT&T is the company that brought you the Bell System.  And when the government decided that its network had grown too big, it ordered the company split up.

So AT&T reinvented itself as AT&T Wireless.  The same company that once built a network on which you could dial Peoria, Illinois from Brooklyn by yourself and talk to your kids like they were in the next room became the company that put that phone in your pocket allowed you make that call from almost anywhere.

But there would be more.  This thing called the internet came along, and it was only natural that one of the big players should be the company that developed the telephone network and got too big doing it.  After all, networks are networks, right?

So AT&T started combining a new network with pocket telephones; and over a long period of time, we got to where we could watch the Final Four on an iPhone from one of their cell towers in the middle of nowhere.

There are only two problems with that.

The first is that some lesser competitors want to tie AT&T’s hands in places like rural Nevada by forcing them to keep the old telephone network intact, thus stopping them from building more wireless systems until the little guys can catch up.  How stupid is that?  Stop a company that wants to invest in rural Nevada from investing until it’s too late.

And the second problem is that the television stations and the networks that own the programs don’t want any new competition, so they want to pretend that an iPhone or an iPad getting its signal from a cell tower somehow isn’t the same as a TV set getting its signal from a tower in Reno.

Last week at the National Association of Broadcasters convention, Fox said that if the courts didn’t stop a start-up in New York called Aaero from broadcasting TV stations to iPhone over the air, they would convert Fox to a pay channel and simply get rid of their affiliates.

I need to remind you that these were the guys who decided that three networks were not enough and started a fourth one.  And that CNN wasn’t enough, so they started Fox News.

Something tells me they protest way too much.

Two things about progress.

One is that even if you throw your body across the railroad tracks, it won’t stop the train.

And the second is that the government can’t stop it either. Not for very long, anyway.

But that doesn’t mean they won’t try.  In Nevada, T-Mobile and Sprint would like to use technical provisions in an outdated law to slow down AT&T or stop them from building out a network that only stands to benefit rural Nevada.  And, interestingly enough, most of the other phone companies and internet providers big and small—including Verizon—have sided with AT&T.  It is, in 2013, a reasonable question to ask why the state should regulate this stuff at all.

At the national level, the legacy broadcast networks want the definition of a radio or TV set to be whatever they say it is at any given time to suit their purposes.

The truth is that it’s time for them to come into the 21st century, the same way that the newspaper industry is going to have to.

Using the legislative process to try and slow down or stop progress is not only bad public policy but make the taxpayers losers every time.

If you don’t believe it, here’s an interesting fact.

Cellular telephones were actually invented in the 60s by Bell Labs.  They weren’t rolled out until the late 80s because the FCC spent that long trying to determine who the winners and the losers were going to be.

Think about that the next time some legislator starts telling you how you need to be protected from private companies with new ideas.

Photo Credit: Mobile Cell Phone Review (Creative Commons)

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