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Westminster Forum: Mobile market regulation

Presentation to the Westminster Forum on mobile market regulation

Mobile phones are, with the advent of the smartphone, effectively small computing devices.

Yet they do not operate like computers. We are not free as users to make the same choices as we can with our other devices.

We are often constrained as to the choice of device we use with our phone contract.

We are constrained, usually by contract, to stick with a device, an operating system, and to only install ‘approved’ applications.

They do not allow us to use the internet exactly as we like.

The activities and services I use are therefore often subject to the interests of the mobile operator.

Now, a mobile operator, may have good reasons, or bad, for wanting a market like this, but as a customer, this feels pretty bad.

If I have a smartphone, I want to choose the applications I use. These are likely to be the same ones I use on my work computer. If I rely on Skype, I need Skype on my phone.

The same goes for Flash or Google products or anything else I need to use.

Demand should drive what gets developed, not what the interests of the mobile operator or device manufacturer are.

I’m going to make another point here. I hope I don’t offend too many people by saying that for many years mobile devices have had absolutely terrible user interfaces.

The iphone was perhaps the first mobile device that felt was designed for a user, yet this innovation came from outside of the established mobile market.

Why was this? Well, part of it may lie in the way that phones have been specified and manufactured to the demands of mobile operators, who try choose what to supply to their users.

It didn’t work in Soviet Russia, I’m not sure why cwntral planning it would work for mobile phones.

Forget control. Let the users choose. Let the users choose how to use their devices, let them drive demand, and regulation needs will reduce.

We’ve heard previously about the problems Skype have had with companies preventing legitimate software from being used on their networks. Google, too, have been prevented by

Apple from distributing Google Voice and are under investigation by the USA Federal Communications Commission.

Mobile operators are charging twice for data use on the iphone. They are able to prevent use of the iphone as a dongle, and insist on an expensive bolt-on package. Yet as a smartphone user, I have paid for my data, and should be able to use it – within whatever fair usage guidelines my contract has.

As data becomes more ubiquitous, and the need to connect devices and applications more common, it becomes more important to let users do what they want.

What should we be aiming at?

Broadly, we want competition in applications and freedom to use the services we choose. Mobile operators can and should charge for their provision of a data channel, but should essentially leave us to choose how to use that data.

First we could rely on competition law. This is the default position, but seems a very dissatisfactory approach. Competition complaints take years to resolve, but we have a market that moves extremely fast. Resolution would generally take place well after damage could be ameliorated.

Secondly, we could look to Ofcom. This may be better, as Ofcom could act more quickly than competition law, but it still requires retrospective action, and it is still more likely that abuse will occur and damage will be done.

In any case, at the moment Ofcom is not well set up to receive and deal with consumer complaints about abuse of market position.

Consumers are expected to try to resolve problems with their suppliers before Ofcom takes up complaints, but this is entirely inappropriate when thousands of customers are suffering because a service is blocked or not present.

The public needs a direct route for complaints straight to the regulator in the modern mobile market.

And the regulator should have a presumption that if customers pay for data traffic, they can do what they like with it, within the law.

Thirdly, we should aim create an inherently open market.

The internet has been an example of one of the most free, innovative market places the world has ever seen. And everyone has benefited from that.

In many ways, the mobile market’s problems are the problems of lack of openness. And the new sucesses are the result of greater openness.

The mobile market bears many of the features of a closed market, in a network that is restricted and controlled by the owners, and the result is that the public – you and me – don’t get what we want and often have paid for.

A presumption, perhaps legal or by regulators, that the public should be able to do what they want within the law with their devices and data would be a good starting point.