Home > News and politics > Data Providers should not be allowed to sell hardware

Data Providers should not be allowed to sell hardware

It should be illegal in the US for data providers to sell hardware to their customers to be used as a client to their service. I think the precedence set by making it illegal for AT&T to force their customers to use company issued landline phones is a good one that we should be following today. During the first half of the twentieth century AT&T wouldn’t interoperate with other networks, nor connect to telephones that they didn’t issue. This was deemed as being undesirable for society and so regulations were put in the place to force AT&T to connect to other networks, and to allow for any device meeting a standard to connect to their network. I doubt anyone today thinks that this was an unwise action to take. Why are we allowing current data services to not follow suit?

Three specific examples of this abuse are wireless providers selling cellphones, cable companies issuing Set Top Boxes and internet service providers offering modems and routers. If it were illegal for wireless carriers to sell cell phones, they would be forced to compete on service, whereas today they entice a customer with a shiny device and then lock the customer into a contract for multiple years at a time. If cable companies weren’t allowed to issue Set Top Boxes the market for STB like devices would be much more diverse than what it is today, and televisions would be competing in it as well. But since most people don’t use their TV’s tuner anymore, due to the STB’s, TV’s are competing on having “internet apps”. Customers aren’t purchasing TV’s with DVR like functionality (or other improvements) because customers couldn’t use it when watching a show through the cable company mandated STB. I think without cable company STB’s TV’s would be better than what they are today. While it is possible for customers to use modems and routers not provided by their ISP, most don’t know that they can use one that their ISP didn’t provide. The result is that customers who would like to get better equipment don’t, because they’re already paying for the low quality one the ISP provided. The routers and modems that the ISP’s provide just need to barely work, but be made on the cheap to be desirable for the ISPs. A consequence of this is that most home networking hardware can’t actually handle IPv6 like they’re supposed to. Also, router and modem creators don’t compete on creating devices which are more manageable or consumer friendly, they only worry about how many they can sell to an ISP.

I understand the convenience of onboarding a customer by having all of the hardware for a data connection provided by the data provider, but I think that the consequences are not desirable for society. It creates an unnatural high bar of entry into the market for either new data providers or hardware makers who would like to compete on the client side of the service\client relationship. We should see the benefit to society that interoperability creates and regulate existing and new services to follow suit.

Categories: News and politics
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