Diminishing returns

In a sense, the iPhone phenomenon-the feeding frenzy that gave instant icon status to a multimedia device that was conceived outside the box before a single consumer had even removed it from inside the box-arguably represented the most poignant, glorious manifestation of the convergence of wireless and Internet technologies.
But besides the manic media attention, there has been another consequence-albeit unintended-of the iPhone launch for the cellular industry in general and AT&T Mobility specifically. It is the unsolicited gaze from Capitol Hill.
Indeed, AT&T’s iPhone has unwittingly created a national stage for complaints about early termination fees, bundling, billing, consolidation and other cantankerous issues.
That the House hearing took place in advance of the upcoming Federal Communications Commission 700 MHz decision is not inconsequential. Frontline Wireless L.L.C. linked the iPhone rollout to a campaign backed by it, Google Inc., Skype Ltd., consumer groups and others to overlay open-access and wholesale mandates on the national license. They are irked by what they believe is an unacceptable open-access-lite plan floated by FCC Chairman Kevin Martin.
It didn’t take long at the hearing for the much-ballyhooed iPhone-and by extension, the cellular industry-to become high-value targets.
“Over the months and years to come, what will drive the most complaints about the iPhone?” asked subcommittee Vice Chairman Mike Doyle (D-Pa.). “The lack of 3G speeds? No voice dialing? The risk of fingertip frostbite trying to make a call in winter? Or will it be that the phone costs over TWENTY-THREE HUNDRED DOLLARS over the life of the contract, and runs on what Consumer Reports says is the worst or next to worst network in 19 of the top 20 markets? … The iPhone could still change the world, and be available for any consumer on any network. But we won’t know until 2012-the year that AT&T’s American exclusivity reportedly runs out. Since the phone is going to run on T-Mobile’s network in Germany, it could be tweaked to run on T-Mobile stateside. But to do so will require hacking and other tricks out of reach to the average user like me.”
It’s a textbook case of how manic publicity isn’t necessarily good publicity.