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FCC Chairman Talks Tough To Cellular Industry

Las Vegas – Federal Communications Commission chairman Tom Wheeler had some tough words for the cellular industry that he led as CTIA CEO up until about 10 years ago.

“Today I have a new client: the American people,” he told the industry during a keynote address at CTIA’s Super Mobility Week. He promised to “aggressively represent the best interests of my client.”

Wheeler took a strong stance on issues of carrier competition, network neutrality and the planned broadcast-spectrum incentive auctions.

Although there is “an economic incentive to accruing scale with ever more scale,” he said the FCC will “continue to be skeptical of efforts to achieve that scale through the consolidation of major players.” The FCC and Department of Justice voiced strong disapproval of the planned purchase of T-Mobile by Sprint, he said, and the result was a wave of stronger competition in pricing and services.”

 “Where competition exists, the commission must protect it,” he said. The “absence of meaningful competition invites government regulation,” he warned.

“Competition doesn’t always ensure openness,” he continued, pointing to the walled gardens that existed only a few years ago to prevent consumers from downloading apps other than those approved and sold by the carrier.

Wheeler also hinted strongly that when the FCC finalizes open-Internet rules, it might not carve out exceptions for the wireless industry as it did in 2010 when it promulgated its first set of guidelines, which were struck down by a court. He cited “significant changes” in the mobile market since 2010. There were only 200,000 4G LTE subscribers in 2010 compared to 120 million today; LTE service now reaches 300 million people; and LTE is promoted as offering faster service than fixed broadband, he said.

Even Microsoft, in its comments on net neutrality rules, said consumers “live in a mobile world first” and that “mobile broadband services must be subject to the same legal framework as fixed broadband,” Wheeler said. “Thousands” of similar comments have poured into the FCC, he noted, which will start receiving its next round of comments on Sept. 15.

The FCC has to take into account “reasonable [wireless] network-management” practices, he agreed, but he questioned whether it was reasonable for consumers to buy unlimited-data plans from a carrier only to find out later that speeds are throttled after a certain amount of data usage.

He also said he sent a letter recently to the four national carriers to object to practices that single out heavy data users for “disparate treatment” even though they paid for their service.

He called it “hard to fathom” that such practices are a “reasonable way” to manage data.

As for the planned spectrum auctions, Wheeler warned that major carriers must participate. “Carriers showing interest in the incentive auctions is a predicate to [TV] broadcasters showing interest in the incentive auctions,” he said. A successful auction will “be a template” for other incentive auctions to follow. Broadcasters would be compensated from auction income if they voluntarily give up spectrum for the auctions.

Although AT&T and DISH have expressed strong interest in bidding on broadcast airwaves, and Sprint and T-Mobile had reportedly planned to spend big bucks on joint bids, Wheeler said “the rest of the industry has been strangely silent.”

However, the CTIA’s new president/CEO, Meredith Attwell Baker, promised, “We will show up to every auction.”