Apple 2.0

Covering the business that Steve Jobs built

Dancing on AT&T's grave in the Wall Street Journal

August 19, 2009: 10:50 AM ET

att_logoThe Wall Street Journal's editorial board and I disagree about almost everything, including the legacy of the late Robert Novak.

The op-ed page, however, is a different matter. And on Tuesday the Journal ran a guest commentary by Andy Kessler that says what many of us have been thinking about AT&T's (T) role in Apple's (AAPL) rejection of Google's (GOOG) Google Voice app -- the universal telephone number and voice mail system the telcos should have offered us years ago. (See here.)

Like most observers, Kessler, a former hedge fund manager, blames AT&T for forcing Apple's hand, and he doesn't mince words. [UPDATE: In letters to the FCC, Apple and AT&T make it clear that it was Apple that decided not to accept the app, no AT&T. See here.]

"What this episode really uncovers," he writes, "is that AT&T is dying ... cling[ing] to the old business of charging for voice calls in minutes."

Unlike, we imagine, the Journal's editorial board, Kessler welcomes the intervention of the FCC and its new Chairman Julius Genachowski, arguing that the United States can't just rethink its communications policy -- even that is obsolete. What we need, he says, is a new national data policy, and he offers four suggestions:

  • End phone exclusivity. Any device should work on any network. Data flows freely.
  • Transition away from "owning" airwaves. As we've seen with license-free bandwidth via Wi-Fi networking, we can share the airwaves without interfering with each other.
  • End municipal exclusivity deals for cable companies. TV channels are like voice pipes, part of an era that is about to pass.
  • Encourage faster and faster data connections to our homes and phones. It should more than double every two years.

"Data is toxic to old communications and media pipes," Kessler writes. "Instead, data gains value as it hops around in the packets that make up the Internet structure."

He's calling for nothing less than the end of the 135-year-old Alexander Graham Bell era. And not a moment too soon.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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