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The U.K. Competition Appeal Tribune recently issued a "judgment on the core issues" in a dispute concerning U.K. mobile call termination rates. The judgment concerns mobile call termination rates that were in effect from 1 Sept. 2006 to 1 April 2007. That's a period slightly shorter than the period between the Competition Appeal Tribune's judgment (20 May 2008) and Ofcom's most recent decision (7 July 2007) in its lengthy regulatory proceedings considering call termination rates.

The Competition Appeal Tribune (CAT), however, has not yet decided what money will be shifted among the companies. The CAT's Judgment explains:

On handing down this judgment, therefore, the Tribunal will set a date for the submission of any further contemporaneous evidence as discussed in paragraph [194] above. The Tribunal intends then to proceed to determine the rates in dispute. At that stage the Tribunal will seek the parties’ views as to which, if any, of the non-core issues remain to be decided. Once any such issues have been decided the Tribunal will be able to remit the decisions to OFCOM with appropriate directions, in accordance with section 195 of the 2003 Act.

Which company gets what money for mobile calls made from 1 Sept. 2006 to 1 April 2007 probably won't get decided, I'd guess, before mid-2009. Such a decision has no effect on the public's mobile calling behavior, because calling behavior can't be adjusted retrospectively. Maybe that's why the OfcomWatch folks don't seem much interested in the details of the issue.

The CAT referred some related call termination issues to the Competition Commission on 18 March 2008. The Competition Commission is required to report to the CAT on these issues by 31 Oct. 2008. The CAT noted (para. 196) that it "needs to balance the desire not to prejudge the Competition Commission’s investigation against the desire to resolve these disputes as soon as possible." Having three government agencies involved in resolving a mobile call termination dispute undoubtedly adds to the time required to do so.

The economic behavior relevant to this dispute is that of lawyers, lobbyists, and regulatory affairs staff persons. Ideally, each party in the dispute will expend resources pursuing it until the party's marginal cost is equal to its marginal expected return (roughly, increase in probability of winning times size of expected winnings plus probability of winning times increase in size of expected winnings). It's entirely possible that all parties together will spend more on pursing the dispute than size of the winning pot the final decision establishes. Regulatory affairs' principal-agent problems in large companies make this outcome more likely.

Call termination rates are a difficult problem best viewed in light of an overall structural strategy for communications industry development. Having multiple government bodies deciding narrow, short-period, backward-looking termination rate issues in an adversarial case-and-appeals process isn't likely to produce a forward-looking regulatory framework for communications industry development.

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According to Communications Daily (June 21), Motorola CEO Ed Zander stated in his keynote address at NXTcomm that Motorola next summer will have a mobile device that allows persons to talk and share photos at the same time. Much evidence suggests that such capability has significant value in communication.

While delivering video to mobiles is attracting more industry attention, I think that the possible upside for show-and-tell devices is bigger than for mobile video. Design and marketing will be significant challenges. On the other hand, in-stream photo sharing is closely related to highly successful mobile voice and SMS charging models. In-stream photo-sharing can easily draw upon well-established user understandings of payment for communications services. That's not the case for watching video on mobiles.

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Attaching a camera to a mobile phone doesn’t seem to create much value. In rank order of occurrence of key Telco 2.0 events, 200 early respondents to the Telco 2.0 survey placed “voice revenue less than 20% of mobile operator total revenue” at “13/never.”

Can you use your mobile to take a photo while talking to a friend and send it to her instantly in the stream of your conversation? In other words, can you do real-time show and tell?

Recently in a bustling T-Mobile retail store, I told an energetic young service representative that I wanted a phone that would let me send a photo to the person I’m talking to. He said that all the phones could do that. I asked him to show me how it’s done. He said the he had never tried it, and asked another representative how to do it. That representative said that the phones can’t do it.

The representative in the Verizon retail store told me that he didn’t know if the phones could do it. He then whipped out his RAZR, dialed a number, and then tried to take a photo. The device produced a message saying that the camera was shut off.

In the Sprint retail store, the first representative said she didn’t know. The second said she wasn’t sure if it was possible. The third said he did it once but he didn’t remember how he did it. A customer overhearing our conversation then told us that yesterday she was making a call about a pie that had arrived damaged and she tried to take a picture of it while on the phone and it didn’t work. Oh, that’s a shame, I said.

To assuage my disappointment, the second representative in the Sprint store then told me that she had sent a text while talking on her mobile phone. I asked her if she sent the text message to the person she was talking to. She told me that, no, she had sent it to someone else.

What’s the problem with showing and telling with a phone? Technically, the problem is that normal voice calls are tightly integrated with the transport infrastructure (“circuit switched” not “VoIP” etc.) Even with mobile phones with messaging capability, Internet access, etc., the communications channel established when a person talks on the phone is a traditional voice channel. Hence placing a photo in the stream of communication isn’t possible.

Applications and networks that can support a show-and-tell mobile communicator are right around the corner. Internet telephony software from everyone can already do this. According to the Telco 2.0 preliminary survey results, in order of occurrence “a leading internet player launches a mobile telephone service” is ranked #1 (it’s already happened: AOL in Germany) and “WiFi capability available in mass-market mobile devices” is ranked #2. So show-and-tell mobile communicators will soon be available.

But will anyone show these devices to you and tell you about them?

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The Carnival of the Mobilists, a fine collection of blogging on mobile and wireless communication. Check out No. 29 over at Open Gardens.

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