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Wireless phone firms open up networks

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Steve Chiotakis: Wireless telephone companies are opening up their networks to Internet-based phone services. That means, for example, iPhone users will have access to long-distance services, such as Skype. Separate announcements yesterday by AT&T and Verizon that they’ll reverse their policies and allow rivals access to their networks aren’t just a coincidence. Marketplace’s John Dimsdale is with us from Washington. Good morning John.

John Dimsdale: Good morning Steve.

Chiotakis: So why is this happening now?

Dimsdale: Well the chairman of the Federal Communications Commission Julius Genachowski delivers the opening speech of a major conference for the wireless-telephone industry this morning. And he’s made it clear that he wants the owners of communications networks to be open to competitors. He’s expected to step up the pressure on wireless-phone companies and Internet-service providers to allow their customers to use these alternative services. AT&T and Verizon seem to be trying to head off government requirements by voluntarily making these cheaper communications products available.

Chiotakis: And it sounds, John, like the FCC is forcing the mobile-phone networks to let competitors use those same networks to take away some of their customers?

Dimsdale: You’re right, and that’s a problem not only for the communications industry, but a dilemma for regulators. The owners for these networks say that as customers use the alternatives, the pipes that carry all the communications will become clogged, and the gatekeepers of these pipes have no incentive to build and maintain more since they don’t earn any profits from the customers who are defecting to the alternative services. So it’s another case where technology is outpacing the regulatory structure and regulators are scrambling to adapt.

Chiotakis: All right, Marketplace’s John Dimsdale from Washington. John, thanks.

Dimsdale: You’re welcome.

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