Thanks for all the innovation, Verizon!

June 11, 2008

This column is hilarious. First, the Washington Post’s business columnist reveals that he’s never bought a smartphone. Then he holds out the WIRELESS PHONE SERVICE INDUSTRY—a highly regulated field dominated by a handful of companies rapidly consolidating into a duopoly—as a bastion of competition in the free market! This is especially funny because the industry had been characterized by stagnancy until an outside (Apple) essentially strong-armed it into the slightest hint of innovation. And what’s the result? Windows Mobile still sucks. Blackberry and Palm are paying lip service to handset improvement, but haven’t demonstrated any in the last year.

C’mon, Pearlstein. Get real. The cell phone industry is big business at its most conservative. If Apple hadn’t exposed them as anti-innovation charlatans, they’d still be foisting brick-sized, unusable smartphones on us all. The big innovation in mobile media is that every company involved is trying to figure out a way to charge consumers even more for access. Things are getting more, not less expensive (yes, even the iPhone, when you account for the extra $10/month you will have to pay for data). And until Google forced the issue, all cell phone service providers were THRILLED to regulate, bottleneck, and charge users through the nose for access to their networks (and, in fact, it remains to be seen whether Google’s intervention will make any meaningful difference at all).

Now it’s possible that change, in the guise of improved hardware and cheaper/better service, is coming to the industry. But one handset that’s sold fewer than 10 million units (worldwide) is not nearly enough to convince me that things have changed for the better.

After these enlightening observations, Pearlstein goes on, in a transition that can only be described as “forced,” to compare the high-paced competitive cell phone industry with intellectual property law reform in Congress. Apparently, reforming a cornerstone legal doctrine from top to bottom isn’t a speedy process. I, for one, am shocked and scandalized that the legislature isn’t acting as quickly as private companies (most of whom are well on their way to bankruptcy, incidentally)!

If this were an isolated case, you might write it off as a bit of bad luck or a testament to the political clout of drug companies with too much money to spread around. Unfortunately, however, it is the norm. Immigration reform, a major energy bill, global warming legislation, the housing bill, overhaul of the aviation system and fixes for the alternative minimum tax have all been bottled up in the Senate, thanks to those quaint rules that effectively require 60 votes even to take up legislation, let alone pass it. As long as this arrangement persists, it will be impossible for the country to simplify the tax code, reform the health-care system, restructure financial regulation, fix the tort system, rebuild the nation’s infrastructure or put a brake on runaway entitlements.

Hmmm. It’s almost as if the legislative system were intended to be conservative, to prevent overreaching by self-serving political bodies who don’t have the perspective to make good long-term decisions!

Patent law is kind of a mess, but it’s a lot easier to cry out for reform than it is to actually put together a proposal that will improve matters. And it’s a lot easier to complain about the speed with which the legislature moves than it is than it is to actually think about why it might work that way.

Posted in Media, Tech