Really soon here I should be getting a new Windows Phone 7. I'm pretty excited about it: from the little I've played with one, it made the iPhone look like a relic. The problem is that Windows Phone 7, like the iPhone, is launching as a GSM-only phone, which AT&T and not Verizon. (Verizon phones will be coming someday, but not for a while.) I'm a current Verizon customer and I really like the service, but I also would really like an amazing new phone. I was with AT&T for a while and it was terrible. The service was abysmal and the cost was far higher than what I pay now. Apparently, though, over the last year they've gotten better—incredibly better—especially in this area. I've decided over the past few days that I'd be willing to give them another chance. Jason's on AT&T and he can actually even receive phone calls, which is way better than I used to get when I was on their network. The problem with giving them another chance is, of course, if I choose poorly and they still suck, I'm stuck with them for a long time.
Of course that's not news. That's just the way phones work in the US. It's awful and plenty of people despise it, though it does result in lower-cost phones up front since it effectively ends up being a payment plan. I think this may just be one of those places where the free market sort of failed. Until all of the major carriers allow people to freely move between networks, they only have to be competitive every two years when peoples' contracts run out. Even if contracts weren't in the mix, carriers' technologies aren't terribly compatible, so I couldn't use an iPhone from AT&T on Verizon's network, for example.
I do wonder how much better the European model works, if at all. As I understand it, the technology there is all roughly the same, and people own their phones outright without lengthy contracts, so it's much easier to switch carriers, forcing them to compete constantly on providing a good service. That's very appealing to me. I mean, that's supposed to be the big benefit of capitalism, right? In the US it seems like it's one of those situations where the free market didn't produce a situation where companies are truly competing with each other. Mobile phone service is just good enough where it seems that nobody can win out by being radically and phenomenally better. If a carrier came out with a high-quality service that cost less than half as much as their competitors, I'm sure people would switch, but if you save five bucks a month or get a slightly cooler phone, most people aren't going to notice. But I really feel that if they were in a situation where people could and would switch for smaller service improvements like that, mobile service would improve at a faster rate than it is right now.
I suppose that as the demand for technology services arises over the next decade, we're going to run into a lot more situations like this where I'll feel like the free market is failing me. I like Facebook, both the service it provides me as well as the UI. But nobody's really competing with Facebook, at least not in their core business. No one can right now. Maybe eventually I'll stop liking them, and then I won't have any other options to switch to and I'll be upset. It certainly could happen. Right now they don't have to let anyone compete with them. Their network is theirs and they don't have to share. I don't think that the government forcing Facebook to open up their social network, or forcing AT&T and Verizon to abolish contracts and share network technology is the best solution. But I do think that a (much) better economist-legislator than me could probably come up with a solution that better encourages companies to behave in ways that ensure future competition without resorting to dictatorship or ridiculous rulings and fines (cough Internet Explorer cough). Getting stuck with a service provider you don't like for multiple years is not good for capitalism.