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Static on the Dream Phone

This morning, the New York Times published my op-ed about the need for an open phone ecosystem under the title Static on the Dream Phone. I had originally titled it Openness is not a fig leaf. In it, I argue for Verizon (and by extension other major cell carriers) to embrace the vision of Google’s Open Handset Alliance:

Verizon announced last month that it will open its network to “any application and any device” by the end of next year.

But while Verizon’s pledge sounds promising, the language in which it is couched makes me wonder whether Verizon understands what a true open platform looks like. The announcement states that … “devices will be tested and approved in a $20 million state-of-the-art testing lab.”

…Tim Berners-Lee did not have to submit his idea for the World Wide Web in 1991 to a “state-of-the-art testing lab.” All that he needed to unleash a revolution was a single other user willing to install his new Web server software. And the Web spread organically from there.

I go on from there to talk about ideas that will be familiar to readers of this blog, namely that open systems don’t mean the end of competitive advantage, but instead simply move the competition to new ground.

For the current generation of Internet applications, sometimes referred to as “Web 2.0,” the data collected from users is the true source of competitive advantage. And the first movers, the companies that understand and apply this insight, have services that get better fast enough that their competition never catches up.

The power of a social network like MySpace or Facebook isn’t in its software or its control over which applications get on its platform. It is in the critical mass of participating users. Ditto for eBay, Skype or YouTube. Even less obvious cases like Amazon, where user annotation makes for the best product catalog in the world, and Google, whose search index and ad auction are both driven by user participation, show the power that comes from harnessing the collective activity of everyone who uses the service.

Cellular carriers need to embrace this insight. Winner-take-all profits can be achieved by opening up their networks and then harnessing community contributions (including the contributions of software developers) to improve — or invent — new services.

There was one very important bit that was, unfortunately, cut from the printed piece, which opens:

THE Internet and the cellphone are on a collision course.

In the future, the cellphone and similar wireless devices, not the personal computer, will be the primary interface to the cloud of information services that we now call the Internet. The demand for Internet-style applications on the phone — e-mail, maps, photo and video sharing, social networking and even Internet telephony — is exploding.

The next two lines in my original draft, which didn’t make it into the final version, were:

This is why Google’s announcement that they intend to bid in the 700 MHz spectrum auction and their launch of the Open Handset Alliance are among the company’s most important strategic initiatives. If the internet model, in which any device, application, or service can be brought to market without restriction or approval by the network provider, does not take hold in the wireless ecosystem, the growth of internet information providers like Google will eventually grind to a halt.

Whether or not the open cellphone model takes off is important not just to cell carriers like Verizon. It’s critical to every Web 2.0 company as well, which is why Yahoo!, Amazon, and the host of innovative web startups ought to be on board with the open handset alliance as well.

Finally, I wanted to make a note about my assertion that IBM “published the specifications for a personal computer that anyone could build,” since the NYT fact checkers probed me on this point. Technically, the PC was not an open system — in fact, cloners had to reverse-engineer the BIOS (Basic Input-Output System) in order to make PC-compatible computers, and IBM sought to protect part of the design with patents — but it was open enough. It was built largely with off-the-shelf commodity parts, but most importantly, came with detailed specifications that made it easy for people to extend and copy. Perhaps I’m showing my bias as a publisher, but I’ve always thought that detailed, transparent documentation is one of the key factors that make open systems work.

There’s a great summary of this point in a short history of the IBM PC that was published as part of the burst of 20th anniversary reminiscences back in 2001:

One of the best parts of the IBM PC—its Technical Reference manual—went unmentioned in the press release. This manual provided a wealth of information that exposed the PC’s hardware and software to scrutiny by developers. Release of such a cache of data was unthinkable for a company based on closed systems and proprietary hardware and software. Yet the Technical Reference manual provided 362 pages that laid bare the PC, from 82 pages of assembly-language BIOS listings to 50 pages of schematics. By using the Technical Reference as a guide, almost anyone with a grasp of software and digital electronics could produce an add-in board for the PC. And many people did just that.

And of course, it was first add-in boards, and then complete clones, leading to the commoditization of the entire computer hardware industry, the rise in the importance of software, the fertile ground in which the internet model took hold, and all the other themes that I have written about at much greater length in The Open Source Paradigm Shift. It’s time for the phone to go through the same paradigm shift, and become a first class internet citizen.

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  • http://www.wayner.org/ Peter Wayner

    Openness is a nice word, but the real question seems to be finding the right amount of openness. If pure openness were the measure of Internet success, we would have stopped with USENET and everyone would be posting their craig’s list and ebay items there.

    But it seems like people like some policing and they like some amount of centralized power. Even the example of the PC is a difficult example because it’s success encapsulated the tight monoculture of the OS with the freewheeling hardware business. In fact, even the hardware is pretty much dominated by Intel. The only true wide openness is in the marketplace for USB gadgets.

    To complicate matters even more, the most successful hardware company lately is Apple and everyone knows how open they are in practice. They seem to be backing away from their tightness, though, after the complaints that greeted the iPhone and the AppleTV.

    So yes, it would be nice in many ways if the cell phone system became more open– until, perhaps, we started watching it collapse. My VOIP system may transmit more frequencies but still can’t compete with my POTS line in reliability.

    Sigh. If only it were simple….

  • David

    ‘And what if this phone company opened up its databases to developers of software applications?’

    Not sure what Tim meant here. Is he suggesting that Verizon (and other telcos) be free to share my call detail records with developers and the public at large? Not sure I’m comfortable with this, precisely because it reveals a great deal about my personal identity/social profile.

  • http://tim.oreilly.com Tim O'Reilly

    David –

    Everyone seems to be so affected by the mania for public social network data that they can’t imagine the private utility of better access to that data. Wouldn’t you like your address book to know who you called most often? Even if no-one else but you could see it? Wouldn’t you want it to remember everyone who called you?

    Now, I understand the risks. But it *is* possible to build applications that handle sensitive data without compromise. Wesabe (OATV is an investor and I’m on the board) provides a mechanisms for users to retrieve their very sensitive banking and credit card data without ever giving Wesabe their passwords.

    This example illustrates two things: 1. It is possible for developers to build applications that access data that the user keeps control over. 2. Any company that wants to deal with sensitive data must build a trust relationship with said user.

  • http://tim.oreilly.com Tim O'Reilly

    Peter –

    I agree that openness begets the next round of closedness. That is in fact the premise of my paper, The Open Source Paradigm Shift. It happened in two ways: open hardware begat closed software, and Intel basically stood up to IBM’s “every component must be available from at least two suppliers,” and won.

    You’re wrong, though, that the only openness in the PC is in USB gadgets. Every component is standard, off the shelf. It became so open it became uninteresting, and no longer the source of competitive differentiation. Which is why value moved to software, displaying Clayton Christensen’s “law of conservation of attractive profits.” That’s also why open source is driving value to network effects databases (Web 2.0.)

  • http://www.crostel.com Doug

    I agree. The idea that a mobile carrier should lab test every webpage that gets through to a phone is absurd. Just like it would have been absurd for the Internet providers in the early days to try that. Of course, building a big testing center is just a pretext to further restricting mobile content trade.

    The social networking site crostel.com is dedicated to helping people share mobile content for free and, of course, we often find our service blocked by one or another carrier. I have heard every excuse in the call center from carriers like Verizon to justify why they are blocking content from thier network. The excuse is usually that they are “protecting thier subscribers” from mobile viruses or an untested web page that could hypothetically break the phone. More times than not, the block is caused by a bug or delay in thier system that they do not ever seem to fix.

    The real solution I see is to begin educating consumers about phone capabilities and carrier practices so they can make informed decisions when it comes to buying a phone and signing up with a new carrier. Too many people now get locked into contracts with a phone that looks cool but has bloothtooth disabled or the ‘save as ringtone’ button only works with carrier provided ringtones. There are quite a few phone models that are not locked down and there are good carriers out there. I think we just need to find a way to highlight the good and the bad and then let the market sort them out.

  • Marie Bjerede

    Tim,

    Like you, I am HUNGRY for the cell phone’s promise to be unleashed. I have SO many uses for the data of this amazing device that knows more about me than almost anyone (Mine not only holds my contacts, but my calendar and to-do’s [read: plans, hopes & dreams]…and my location as well [read: follow-through on plans, hopes, etc.]. And it pretty much never leaves my side.) I would love for my trusted providers (Yes, Amazon, I’m talking to you!) to take our relationship to the next level by getting to know me even better and making my life even easier.

    But I am not ready to take the world of PC’s to my phone. Clunky applications that require the patient of a saint, rebooting/hanging OS’s, spam advertising. I may have time for that stuff when I’m sitting in front of a screen, but not when I’m walking/shopping/watching the kids play soccer.

    Worse, I’m not willing to live with decreased reliability in voice call availability. I’m spoiled. I’m not ready to go back to “no signal”. When carriers test handsets and applications, one of the big reasons is to protect the network. Whatever else is on the table, that reason alone is one I am concerned about.

    It’s almost like I want TWO networks. One that is completely open where I can play and explore and that I don’t mind futzing around with when I have time. And one that is closed, but beautiful. A gilded cage that simply works…like when I am jumping in the car with barely enough time to meet the school bus and I need to know if the other parents are going to be there. Right NOW!

    -Marie