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CTIA Criticizes Call To Extend Net Neutrality To Wireless Carriers

9/22/2009 02:37:52 PM Eastern

Washington - CTIA-The Wireless Association and major wireless carriers criticized Federal Communications Commissions (FCC) chairman Julius Genachowski's call to extend net neutrality principles to the wireless industry and to expand the rules to prohibit wired and wireless Internet service providers from discriminating against content or applications that compete with their own.

In a statement, the association warned that the outcome of Genachowski's effort could be less competition among wireless carriers and less handset differentiation, which could accelerate the commoditization of handsets.

The Consumer Electronics Association (CEA), on the other hand, took a more measured stand. Michael Petricone, senior VP of CEA, said the organization "applauds chairman Genachowski's commitment to ensuring that Internet users have access to the lawful content, services, applications and devices of their choice."

Petricone also said CEA looks forward to "working with the commission to develop common sense rules that preserve openness without undermining incentives to invest in broadband infrastructure."

Carriers AT&T and Verizon Wireless also criticized the speech, but carriers Sprint and Clearwire voiced approval.

On Monday Genachowski called on fellow commissioners to establish rules to apply the non-discrimination principle to wireless carriers as well as to cable and landline-phone companies. The principle would prevent service providers from blocking or slowing competing applications or services.

Genachowski also wants to turn informal network-neutrality principles applied by the FCC to cable and landline-phone companies into formal, enforceable regulations and to extend their application to wireless carriers. Under the informal principles, service providers cannot prevent end users from accessing lawful Internet content, applications, and services of their choice, nor can they prohibit end users from attaching non-harmful devices to the network.

Genachowski's proposals wouldn't prevent carriers from charging more to customers who consume high volumes of data by using bandwidth-hogging applications, such as video streaming.

At press time, he hadn't provided a draft or summary of proposed rules to other commissioners.

"The rise of serious challenges to the free and open Internet puts us at a crossroads," Genachowski contended in a speech. "We could see the Internet's doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised. Or we could take steps to preserve Internet openness, helping ensure a future of opportunity, innovation, and a vibrant marketplace of ideas."

In response, the CTIA welcomed Genachowski's willingness to apply net-neutrality principles differently to wireless networks, whose data capacities are more constrained compared with those of landline-telecom and cable-TV operators.

Nonetheless, CTIA regulatory affairs VP Chris Guttman-McCabe warned that net-neutrality regulations would reduce competition and innovation in the wireless industry. "As a justification for the adoption of rules, the chairman suggested that one reason for concern ‘has to do with limited competition among service providers.' This is at the core of our concerns," McCabe said. Compared to landline services, "the wireless industry is extremely competitive, extremely innovative and extremely personal."

"How do the rules apply to the single-purpose Amazon Kindle?" Guttman-McCabe continued. And how would the regulations affect efforts by Apple, Google's Android, BlackBerry, Firefly and others "to differentiate the products and services they develop" for consumers," the VP added. "Should all product and service offerings be the same?"

Verizon Wireless and AT&T also opposed the extension of net-neutrality rules to wireless.

In its statement, AT&T said it is "concerned" that "the FCC appears ready to extend the entire array of net neutrality requirements to what is perhaps the most competitive consumer market in America: wireless services." Imposing net-neutrality rules on wireless carriers is "a risky experiment with American broadband investment," the company said.

"To paraphrase a recent analyst comment, net neutrality is rooted in an assumption that broadband networks are instantly expandable, to an infinite extent, at little or no cost. To base policy assumptions on such fallacies is to conduct a risky experiment with American broadband investment," the company said. "This is especially so with U.S. wireless networks, which are facing incredible bandwidth strains, and which require continued private investment at very high levels, and pro-active network management, to ensure service quality for 270 million customers."

On the landline side, AT&T described itself as "early supporters of the FCC's current four broadband principles and their case-by-case application to wired networks." The company also said that" despite any compelling evidence of abuses that need correction, AT&T could also consider endorsing a fifth principle relating to actions that are unreasonably discriminatory and that cause material harm."

Verizon agreed said any regulations would be difficult to implement in wireless networks because mobile subscribers might converge on a specific cell site or sites, particularly at events, and potentially overwhelm the sites' capacity.

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