Free Association: Wireless Carriers Stifle Innovation

have been looking at a business model in the wireless industry, utilizing Location Based Services (LBS) to provide a value added service for consumers. During my research, one of the main obstacles to innovation in this industry is the lack of open protocols and third-party vendor support by the wireless carriers. Everyone knows that Walled Gardens stifle innovation - and in the end are more harmful to the company that creates the garden than to anyone else. Said another way - not only do walled gardens (that is closed technology and user spaces; think AOL) harm innovation, and therefore harm users, but also are ultimately destructive to the shareholder value of the gardener. This has been proven repeatedly, but does not stop the CFO's at these companies from continuing down this death spiral of short-term thinking. There is of late, thankfully, some sign of change in the wireless industry...it's about time they saw the light.

Today I found a fascinating podcast in IT Conversations regarding obstructions in the mobile industry, specifically around LBS. While the tone of the discussion is more or less civil, near the end the frustration of the innovators starts to bleed into the conversation. The innovators are clearly frustrated with the walled gardens the wireless carriers have become, and these innovators stand by and witness the high value of open API's (think Google Maps) and the ease with which Web innovators can produce so-called "Mashups". When will wireless carriers start to see that openness in their value-added services is the only path that makes any sense? Probably only after one of them opens up, and starts to kick the ass of all the others.

The first carrier to aggressively open up could reap tremendous value from the innovations that result. To do otherwise is simply idiotic. It will happen eventually - and then they all scramble to get back the subscribers who leave for the promised land of functionality that will result from carrier openness.

I blogged satirically here on the wireless carriers and their idiotic, and ultimately pointless attempts at a death grip on video content - another stupid and counter-innovation walled garden screw-up. The long list of wireless carrier stupidity, stifled innovation, and worse - missed opportunity for the US wireless industry is long, getting longer, and not soon to end I fear. FUBAR.

April 05,