Until recently, the Digital Millennium Copyright Act prohibited most digital locks on copyrighted material, including the computer firmware and software in wireless handsets. Last week, the Library of Congress published an Order exempting several classes of copyrighted works from this prohibition, including wireless handset operating systems and firmware or software “locks.” (See Order at pages 4-7.) Advocates that favor a regulated broadband access device market hailed this as a victory. (See Free Press statement here and Public Knowledge statement here.) These advocates believe that imposing Carterfone and Computer Inquiry obligations on wireless devices will produce results that are superior to those consumers currently enjoy in the competitive wireless market. Unfortunately for these advocates, the actual data (as opposed to ideology) supports the opposite conclusion.
It’s usually quite difficult to prove a negative – i.e., that consumers would actually be worse-off if Carterfone and Computer Inquiry regulations had been applied to wireless devices. But, because Carterfone and Computer Inquiry regulations do apply to wireline service providers, we have an analogous market to which we can compare the development of devices pursuant to Carterfone and Computer Inquiry regulations with the market-based approach applicable to wireless devices. That comparison indicates that the lightly-regulated mobile device market is more competitive and consumer friendly than the heavily-regulated Carterfone and Computer Inquiry era wired Internet and PC markets have ever been.
In the Carterfone and Computer Inquiry era, Internet service was provided using a relatively static, monopoly-controlled network. Because it was a monopoly, the Commission required separation between the network and services and devices. A few providers also dominated market segments related to the personal computer (“PC”), which came of age together with the Internet in this regulated environment. (In this blog, I use 50% or greater market share as a (perhaps crude) proxy for dominance.) Similar to the network to which it was typically attached, the PC relied almost exclusively on a single, dominant operating system (“OS”) – Microsoft Windows, which had 93% of the market share of the client operating systems for usage on the wired Internet as of June 2010 (according to StatCounter) – and a single, dominant chip-maker, Intel, which had over 80% of the central processing unit (“CPU”) market for PCs in 2009 according to IDC (via PC World). Microsoft also dominates the PC market for productivity applications, with Microsoft Office currently controlling 80% of the enterprise market and Microsoft Explorer controlling more than 60% of the browser market (95% at its peak in 2002-2003). And, according to netMarketshare, Google controls nearly 85% of search engine market share. Thus, in the context of the wired Internet, which was subject to strict separation of network, services, and devices in the Carterfone and Computer Inquiry era, the PC device and applications markets have been dominated by a single operating system, a single CPU manufacturer, a single suite of core productivity applications, a single web browser, and a single search engine. In short, virtually everything of significance that happens on the device and applications side of the wired Internet is dominated by a company with over 50% market share. If you are the average consumer, you are (like me) probably reading this post using an Intel-based PC running Microsoft Windows that defaults to Google as the search engine of choice.
The last thing the government should try to do is make the innovative and highly competitive mobile devices and applications segments look more like the moribund PC environment.
The highly competitive and lightly regulated mobile industry has produced completely different results than the Computer Inquiry and Carterfone era of the wired Internet and the PC. There is no dominant device, operating system, or suite of applications in the world of the mobile Internet. The mobile device and applications industry is instead one of relatively equal competitors, without any one company dominating any particular part of the mobile broadband platform. A primary example of this highly competitive environment is the smartphone OS segment – the OS is “the most important software in any smartphone.” Given the importance of the OS to the smartphone experience, innovation and competition among smartphone OS is critical to the future of the mobile broadband platform. Fortunately, the current structure and light-handed regulation of the mobile platform market is increasing innovation and competition among smartphone operating systems.
The chart below depicts Q1 2010 smartphone OS market shares worldwide (according to Gartner via Wikipedia) compared to personal computer OS market shares (according to StatCounter). When looking at the chart, it’s important to remember that in Q4 2006, Nokia’s Symbian OS still held more than a 70% share of the smartphone OS segment. Due to fierce innovation and competition enabled by business model innovation and the competitive structure of the mobile broadband platform market, however, the Symbian OS has fallen to less than 50% market share today (i.e., has gone from dominant to non-dominant). In that time, two completely new smartphone OS, Apple’s iOS and Google’s Android, have been able to enter the market and gain significant market share using the managed device platform (“MDP”) approach in partnership with operators around the world. The ability of a new smartphone OS to gain significant market share against a dominant competitor is astonishing when compared to the PC, where Microsoft leveraged early success into sustainable dominance of the OS segment.
Why has the mobile smartphone OS segment been so much more dynamic than the wired PC OS segment? One possibility is that smartphone OS vendors have used vertical relationships to mitigate network effects in the mobile broadband platform market, an option that was unavailable in the PC context. Like physical networks, OS (and business software) are subject to network effects, and markets subject to network effects are monopolistic in nature. These network effects have been mitigated in the smartphone OS segment through partnerships among device manufacturers, OS vendors, and network operators, who are building integrated mobile broadband platforms. In the PC segment, OS vendors were unable to leverage partnerships with ISPs because vertical relationships were prohibited by Computer Inquiry and Carterfone regulations. The inability of these OS vendors to pursue partnerships with ISPs may have been instrumental in preventing new entrants from making significant gains in market share against Microsoft Windows. The model used by Apple to launch its iPhone successfully against a dominant competitor in the mobile market simply wouldn’t have been legal in the PC market.
For example, when Apple launched the iPhone in 2007, it was entering a mobile market segment in which Nokia’s dominant Symbian OS held more than a 50% share, and the success of the iPhone was unclear – at that time, many believed the iPhone would be a flop (see a contemporary report here). The ability to enter into an exclusive arrangement with AT&T, however, mitigated Apple’s risk and increased Apple’s chances of success with the iPhone by ensuring that AT&T would make iPhone-specific investments such as marketing support, handset subsidies, and modifying its network to accommodate bandwidth-intensive applications.
In addition to enhancing Apple’s opportunity for success with the iPhone, the partnership between Apple and AT&T enhanced innovation and competition throughout the mobile industry. After the iPhone’s successful launch, the industry scrambled to develop competitive alternatives. If the iPhone had been initially available for use with all networks in the United States, there would have been less incentive for device manufacturers to create rival products with similarly advanced features. For example, T-Mobile, like several other carriers, would have had less reason to invest in the development of Android-based devices (which was also a new smartphone OS). It is likewise no coincidence that Verizon entered into its exclusive arrangement for the Blackberry Storm shortly after AT&T partnered with Apple for the iPhone. The sale of the BlackBerry Storm exclusively through Verizon marked the first time that a CDMA BlackBerry device reached the market ahead of a GSM version.
If Apple had been allowed to partner with AT&T for use of the Mac on AT&T’s wired broadband networks, Apple’s OS X might have taken a larger share of the PC OS segment, and Windows may have been less dominant. Perhaps Apple would have created a touch-based PC before it created a touch-based smartphone. But this type of innovation was thwarted in the wired Internet context by Carterfone and Computer Inquiry decisions that prohibited such partnerships. As the Windows OS gained market share in the 1990s, potential competitors were unable to leverage vertical relationships with Internet service providers. Thus, as noted above, the business model that provided Apple with its opportunity to enter (and ultimately, transform) the smartphone OS segment was unavailable to competitors of Microsoft Windows on the PC. Without the opportunity to explore such innovative business models, new OS for PCs lacked an important tool for launching a competitive challenge to combat the network effects that sustain Window’s dominance even today. The result was a relatively stable Windows market share of over 90%, which Microsoft has leveraged into dominance of its core business productivity and web browsing applications. As a result, the PC OS segment has remained one of slow evolution, not revolutionary innovation.
If smartphones and other mobile devices are to avoid the same fate, the government should reject (rather ironic) calls to impose through regulation the PC model on mobile broadband platforms. The last thing the government should try to do is make the innovative and highly competitive mobile devices and applications segments look more like the moribund PC environment. Hopefully, the FCC won’t fall into the same trap as the Library of Congress.
I’ve continually thought it would be best to accept those not ring true show off shoes for when I do alfresco sports such as canoeing and dragon boating. These certain sports shoes pamper to water outside sports in specific because of the heavy water thick mundane it is made of. When I go canoeing, I used to either decamp a return to with my uncover feet or slippers, but was forever having problems with both. Being bare footed meant that I might learn burn by any debris that may cut when I prance on the sand or in the not ring true while getting in or escape of my canoe. When I wear slippers, again it indeed gets in the road when my feet sink in the sludge during low-lying tide. It was when my slipper got stuck when I knew I had to after an outdoor sports relaxation shoes. I decided to think of it as a great investment as it would agency more safely a improved and cleaner feet. I don’t recollect why I didn’t over of getting such gambol shoes in the senior place. I guess it was because my teachings of deride shoes was many times in compensation meet, and not for other out of doors sports.
So when I maxim the FiveFingers Open-air Lark Shoes – Ebon (Dimensions 42) on DealtoWorld.com, I was truly steadfast I wanted it. Not merely can I wheedle a inordinate double of outdoor shoes in place of my still water sports, I can beget a fivefingers one! Not unswerving why they standing by it fivefingers though, since indeed the sport shoes is in the guise of your five toes. This enables a better dominion on where you walk, which is especially renowned in the interest of walking on the beach and shelf waters. I’ve always been a adherent of “fivefingers” or toe socks, so this green open-air shoes of well-spring is making me more fervent with my weekend open-air sports endeavor.
DealtoWorld.com sure made me a delighted camper this notwithstanding, letting me own this best doublet of sport shoes well-founded when I needed it. I’ve bought other lifestyle gadgets from DealtoWorld.com but this is the oldest time I bought sport shoes from any online shopping site. I always rationality it best to try on any shoes, be it sport shoes, leather shoes, slippers, etc. or else you won’t recognize whether it’s a great fit. Extent, I couldn’t at the end of the day stumble on good water alfresco sports sport shoes, so this get back has categorically enhanced my DealtoWorld.com shopping happening, or my online shopping as a whole.
Immediately when I blend with seeking my weekly canoeing or dragon boating, my teammates are all pretty amused nigh my fivefingers humour shoes, and gawp at them against some time. I conjecture the toe-shaped flaunt shoes makes it look like a trap of some subgenus, but it’s not like I can swim in these fivefingers shoes. I’m finding the alfresco sports shoes exceptionally comfortable, and although I cannot depreciate with it as I would with typical management divertissement shoes, at least I can walk along the pontoon or bank area in hearten, unlike when I occupied to boogie barefooted. My feet old to hurt or collar scorched from the hot ground, but not with these fivefingers recreation shoes I don’t. Treat a look at the pictures to be wise to persevere how the fivefingers out of doors sports sport shoes look like from the exceed and bottom.
although it won’t be an exaggeration to say that this phone is really a mini entertainment gadget, offshore iPhones software developers are almost hell bent to make it much more comprehensive by their acts of adding much more to this gadget.
`’; I am very thankful to this topic because it really gives up to date information “-: