Trickle Up Innovation - a wireless phenomenon?
by Hans on Mar.02, 2009, under Industry, News, Opinion
Craigs List for a cell phone - Coming to Kenya first!
According to FastCompany’s most recent article highlighting wireless innovation beginning on the Serengeti before it does in New York or Boston, trickle up is a new innovation phenomenon that will sweep the planet. Not so fast. The conclusions are incorrect for the wireless marketplace. There is a much more important reason why innovation MUST occur outside the US and then perhaps one day (if we are lucky) find it’s way here. It isn’t user choice as the article hints at with the quick references to two obscure wireless companies, insinuating they just couldn’t get customers interested.
In the US, we have a walled garden where the wireless gatekeepers don’t let innovators in because it would jeopardize a rich revenue stream for them. If they don’t get a significant cut of the pie, you can’t play ball, and they would rather just do it themselves. See a recent article from ARSTechnica on Canadian reaction to these restrictions.
This is what has caused countless US entrepreneurial casualties as they attempt to enter the wireless market with it’s capital intensive gauntlet. A startup can’t afford to pay the rates being demanded by the carriers to ride. The wireless market in the US is over $100 billion - that is a market worth fighting for, and you have entrenched vendors that are protecting turf with FCC assistance. You can go back as far as you like to find more examples, many on ARSTechnica, such as Skype lobbying the FCC in 2007.
Device providers are also threatened that they have to follow the rules, or their devices will be pulled. Nokia is currently battling providers because they put Skype on a cell phone. That phone will either get ‘fixed’ (like at the vet!) or it won’t make it to market.
The wireless economy in the US has huge potential. As an economic engine for a recovery, it probably has more potential than almost any other single segment of our economy. But with the way it is currently structured, it can’t happen. Laurence Lessig makes some good points on how to fix the government regulation on several levels .
