Locked Cells

According to Mike Elgan at Computerworld, one of the benefits of the iPhone might be that it will make US consumers aware that their cell phones in fact ARE locked.

Locked cell phones, and phones that are otherwise crippled, is something that folks from outside of the US would never put up with. We were living in Milan last Spring, and we needed to live in Valencia for 6 weeks. I just took the Telecom Italia SIM card out of my Nokia GSM phone, and put in a different one from a Spanish cell phone company. It took me all of 4 minutes and cost me all of 5 Euro, and the new SIM card came with 10 Euro worth of minutes anyway.

In the US, your cell phone and your cell phone service come strictly bundled. This raises switching costs which therefore keeps prices high for service.

The FCC is running an auction in late January 2008 for the spectrum vacated by TV channels 52-69, known as the 700 MHz spectrum. As part of the conversion to digital TV, by law this spectrum reverts to the FCC on 17 Feb 2009. The FCC is proposing that part of this spectrum be reserved for an open network, i. e. Internet-like, where any device or hardware can use it. So how did Verizon react to this exciting news? They sued the FCC (They have since decided to drop the suit).

It will be interesting to see whether the 700 MHz auction will enable someone (Google?) to free US mobile users from their locked cells. In the meantime, E' meglio essere in Italia (It's better to be in Italy).