Michael Finneran's blog on the MagicJack femtocell talks about the new product as a consumer product, but if it's true that a large percentage of enterprise cellular minutes are internal-to-internal calls, at least some share of those--calls made by users whose default device is their cell phone, not their desk phone--could be taken off the cellular network (along with their costs).The cellular carriers clearly are going to hate this thing, and rightfully so--I'm at a loss to come up with a reason why cellular licenses ought to stop at the walls of a private home. If those frequencies were available for general use, there would have been no need to do WiFi in the unlicensed bands a decade ago.
But depending on how well this MagicJack femtocell actually works, the carriers would be a lot smarter if they came up with something like it themselves. If nothing else, the form factor and installation appear to be conducive to mass deployment--again, assuming the product works as advertised.
The problem the carriers face is that everywhere they turn, their existing business models are being hollowed out. AT&T has been reduced to calling for the retirement of the PSTN, while at the same time its rival Comcast fights to be something other than a bit-pusher--or alternatively, fights to create a bit-pushing model that they can exploit to their financial benefit.
There may be an argument for a new Telecom Act. For those of us who were around in the early 90s, this seems like the last thing you'd want to go through again--a free-for-all of pigs at the trough in Washington. But technology has continued to evolve since 1996, most especially in the area of mobility. In 1996, we all knew that cell phones were huge, but the notion that cell phones would one day outnumber landlines was about as exotic as anyone was getting in their predictions. Nobody had heard the word "iPhone," and cellular data in general showed no signs of overcoming its traditional underachieving status.
The two biggest cellular carriers in the U.S. are also the two biggest landline carriers, and it may be time that our regulatory structure took this into account. AT&T and Verizon are rightly terrified of seeing their cellular business go the way of their landline business, and there does need to be some way that we as a nation fund our communications infrastructure--landline and wireless. The carriers are entrusted with the stewardship of public rights of way, be they on the ground or in the air, so they do have an obligation to use those in ways that benefits society. But if they don't make some kind of profit, the infrastructure to support the services will decay.
These arguments are old hat for veterans of the 90s debates about the local loop. Now the same incentives and arbitrage opportunities are migrating to the nation's public wireless network. We need to deal with it.
