January 2011 Archives

January 8, 2011 11:21 PM

Real Consumers Aren't Afraid of "Walled Gardens"

. . . especially "Walled Gardens" that are tiny, and easy to leave.  Apropos of nothing, I would also add that real men don't "Facebook".  Seriously, does anyone think Chuck Norris has a Facebook page?  I looked it up, and the answer is "no".  To Chuck, Facebook is probably nothing more than a catalog of 500 million needy, attention-seekers whose asses just aren't worth kicking . . . .  

But I digress . . . back to my original point.  A few days ago, Free Press attempted to create a tempest in a teapot over the new mobile broadband Internet offerings by Metro PCS.  Basically, as explained by Ars Technica, Metro PCS offers some, limited functionality, service plans over its new 4G network at discounted prices.  Less access to applications costs less, more functionality costs more.  Simple, right?  You'd think.  But Free Press is angry over the FCC's decision to allow mobile wireless broadband providers to block some content.  As a result, it--not surprisingly--is calling for an investigation of Metro PCS.

Free Press seems most disappointed that, despite all their efforts, they got basically an empty Net (pun intended) out of the FCC's Net Neutrality rules.  Once you get past the FCC's aggressive, but confusing (and confused) rhetoric in the Net Neutrality Order, it becomes apparent that the actual "rules" (see Appendix A) are pretty much a restatement of the Commission's 2005 Policy Statement (the principles in the 2005 Statement, minus the "competition" principle, and more "subject to reasonable network management" caveats).  The Order also notes that wireless service providers will be granted more latitude than wireline providers, due to the bandwidth constraints resulting from more limited wireless data capacity and spectrum scarcity.  

After the Commission adopted a predictably generic set of rules, Free Press was predictably disappointed.  The frustration of Free Press is understandable, but their ire over an additional market offering--over an upgraded network--by Metro PCS is sadly, and mistakenly, misplaced.

I have no connection to Metro PCS, and no opinion of the company.  I do, however, have a genuine admiration (gained firsthand) for the guts, intelligence, and skill of the company's early investors--particularly, Columbia Capital Partners and M/C Venture Partners.  Look at these investors' portfolio companies, and you will see that they have been successful by making it their business to bring competitive capacity to all parts of the communications and Internet industries.

Nonetheless, the only "facts" I know about Metro PCS are those in the public domain, and here are the ones that seem most relevant to this matter.  Around 6 months ago, the FCC couldn't give a spit about Metro PCS' presence in the wireless market.  In the Commission's Wireless Competition Report, the FCC didn't even credit Metro PCS with having a wireless broadband network (see p. 30, Table 2), much less a 4G network.  Metro PCS now has both, and is actively offering consumers a variety of service offerings over this upgraded network.  On the other hand, some would have us now believe that Metro PCS is the "Big Bad Wolf"?  But who's really "crying wolf?"  

Adding consumer choices is the sine qua non of a competitive market.  Moreover, the creation of additional broadband capacity--regardless of technology--has been identified by the President, the Congress, and the Commission as a strategic national priority.  If Metro PCS is successful with its offers, it will gain a toehold in the mobile broadband market--if not, then it will have to change its service offers.
Thus, if a "Walled Garden" is so scary to consumers, it's hard to believe that a new entrant would attempt to serve demand that doesn't exist.  Nonetheless, consumers that are scared will just go somewhere else, or opt for another Metro PCS service offering.  It is disappointing that a group called "Free Press" is asking the Commission to deny consumers "free choice."  It kind of makes you wonder who Free Press is trying to set free . . .