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Dell can’t launch its phone business here

By | November 13, 2009, 1:23 PM PST

Dell Inc. (formerly Dell Computer, like Apple) wants to get into the phone business.

Why not. Lots of people like phones.

Dell wants to base its new phone on Google Android, a version of Linux that is becoming popular with phone makers worldwide. Motorola and HTC of Taiwan have already introduced Android kit into the U.S.

So, where can I go get mine?

I need a ticket to Rio?

The Olympics isn’t the only thing Brazil is getting before Chicago. It is also (along with China) getting the first Dell phones because Dell hasn’t yet won the “permission” of any major U.S. carrier to introduce them here.

Most reporters are covering this aspect of the story without comment, But I’m outraged. I think you should be, too.

If you wanted to install a Local Area Network in your home, a feat that a few decades ago required a small army of technicians snaking wire everywhere, you can just plunk down $50 for a radio, plug it in, run the disk and voila. You’re now a radio broadcaster, sending millions of bits every second all around your place at a frequency of (variously) 2.4 GHz or 5.4-5.7 GHz.

That’s WiFi, and if you want to plug your iPhone into the signal it will be happy to comply. You’re a radio station, a virtual Internet service provider. Just like the coffee shop down the street.

But Dell can’t sell you such a radio — that’s what a cell phone is, a radio — without a carrier’s permission. It’s not that the Dell phone is dangerous. The carrier just wants a cut of the action.

This is a feature, not a bug.

It’s this way because your government, over the last decade, decided to sell all the electromagnetic spectrum it could find in the open market. It sold the spectrum to carriers, mostly AT&T and Verizon, and pocketed billions of dollars, which assure us of surpluses for years to come. (That last is a joke.)

The carriers built their cell phone networks as intelligent networks, filled with lots of computers that identify every bit going over them and collects money for them. Every service on a carrier network has three sources of revenue — you, the person selling you the service, and the money collected on the phone. Bits aren’t bits, they’re services — every one of them.

In contrast we have the Stupid Network you are probably using now. The Internet is designed to be stupid at the center, with intelligence pushed to the edge. Any computer that meets basic technical standards connects, without asking carrier permission, and the bits fly by at a dizzying pace.

Bits. Not services. Bits. The service a bit performs are defined in your PC, and in the server you’re connected with. An e-mail bit is a Web page bit is a video bit is a phone call bit. A bit is a bit is a bit.

Because the wired Internet is stupid, it’s cheap and easy to use. It generates trillions of dollars in value for billions of people, every day. Because the wireless Internet is “smart,” it’s expensive and the business is hard to get into. A cell phone bit is a service with a price tag, so we don’t use as many.

The business is so hard to get into that Dell, the second-largest PC maker in America, is having to launch their phone in Brazil and China, rather than the good old USA.

We can change this. But it will take an enormous effort of political will.

The first step is assuring that networks don’t use their power to discriminate between devices or services that meet technical specifications. This is called network neutrality, and the FCC under its new chair, Julius Genachowski, wants to do that.

But there’s a second step that needs to be taken. The National Broadband Plan needs to support stupid wireless networks, like WiFi, not just proprietary networks owned by carriers. Fortunately the man who authored the original paper on The Stupid Network, David Isenberg (left), was hired by the FCC just this week as an expert adviser.

The plan is due before Congress in February. Wish David well. I’m sure Michael Dell will.

Just remember. The fastest-growing network is a stupid network. Embrace stupidity.

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Dana Blankenhorn

About Dana Blankenhorn

Dana Blankenhorn was a contributing editor for SmartPlanet from 2009 to 2010.

Dana Blankenhorn

Dana Blankenhorn

Contributing Editor

Dana Blankenhorn has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement and founded the Interactive Age Daily for CMP Media. He holds degrees from Rice and Northwestern universities. He is based in Atlanta.

Follow him on Twitter.

Dana Blankenhorn

Dana Blankenhorn

Dana Blankenhorn has been a technology reporter since 1982, a business reporter since 1978, and a writer for as long as he can remember. His Schwab IRA has a few tech stocks in it, most notably some Intel and Applied Materials bought over 10 years ago. But the vast majority of his tiny fortune (emphasis on the word tiny) is invested in mutual funds. He presently writes for no one else but ZDNet, SmartPlanet and himself. But if you've got an opportunity let him know. If he takes the gig he"ll first add it to this disclosure page.

He writes for SmartPlanet and is not an employee of CBS.

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RE: Dell can't launch its phone business here
There are good reasons why a cell phone operator (or any wireless carrier) must test and approve equipment before it can be used on its network. Wireless networks are easy to disrupt, and companies like Dell and Google unfortunately have incentives to put in "cool" features that might look great to the user but harm the network. The wireless operator builds the network and catches Hell if it doesn't work. It therefore does have a right to a say in what people attach to it.

Oh, and by the way: handset exclusivity has nothing to do with "network neutrality," which is an abomination all its own.
Posted by Anne Nonymous
13th Nov 2009
0 Votes
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RE: Dell can't launch its phone business here
Wait, I can buy an unlocked cell phone, put in my AT&T sim card, and
I'm off to the races. I happen to be running an Android phone right
now.

I just didn't get a discount from AT&T when I bought the phone.

That doesn't mean I wouldn't be happy to have a little more
standardization and some network neutrality in cellular.

I'm sure if my Android phone starts causing trouble for AT&T's network,
they will let me know.
Posted by kevinddavis
13th Nov 2009
0 Votes
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RE: Dell can't launch its phone business here
Makes no sense. Anyone can take a GSM phone and use it on a GSM network and it just works. I believe almost exactly two years ago Verizon said they will open up their network too.

Of course, people are used to the subsidies of the network operator so they would be shocked to find out that their phone is not $99 but $499 in reality and like this is where Dell have not reached a business agreement yet. This has nada to do with the underlying technology spectrum or anything.

Oh and network neutrality has REALLY nothing to do with this matter.
Posted by bean1975
13th Nov 2009
0 Votes
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Anne Nonymous
You're wrong. Absolutely, completely 100% wrong.

Equipment that meets published standards is no danger to the network. Applications are no danger to the network.

Carriers pretend they are for their own financial benefit.

We can change how we regulate wireless so that instead of carrier standards we use universal equipment standards, as in WiFi.

This is a choice the government needs to make. It's the quickest, cheapest way to more bandwidth. I don't go for subsidies to anyone. We don't need them in this case. It has proven a waste of money.

Just change the laws and regulations to mandate competition and get out of the way.
Posted by DanaBlankenhorn
14th Nov 2009
0 Votes
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RE: Dell can't launch its phone business here
Dell has been acting as an Apple wannabe recently. I suspect they want a deal like the Apple/AT&T deal to share the revenues and can't find a carrier to agree to it.
Posted by wjarvis@...
16th Nov 2009
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