FCC Votes To Assess Wireless Innovation And Competition

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Washington - The Federal Communications Commission (FCC) voted unanimously to develop policies that will promote innovation and competition in the cellular industry, devise new ways to measure the industry's competitiveness, and evaluate carriers' consumer billing practices.

FCC Chairman Julius Genachowski vowed a "relentless focus on policies that promote investment, competition and consumers." The FCC's next step is to gather comments from the industry and the public and recommend possible regulatory changes based on that input.

CTIA-The Wireless Association said it was "excited to tell the industry's story." It contended that the "wireless ecosystem-from carriers, to handset manufacturers, to network providers, to operating system providers, to application developers-is evolving before our eyes, and this is not the same market that it was even three years ago. In this industry, innovation is everywhere."

Gigi B. Sohn, president of advocacy group Public Knowledge, was also excited to give her input, but for a different reason. "For too long, the appearance of competition among a few carriers has masked underlying anti-competitive industry practices ranging from consumer contracts to roaming agreements," she said.

For its part, a Washington think tank called the Competitive Enterprise Institute lamented the FCC action, which it believes will include exclusive cellphone deals between handset makers and carriers as well as policies on open access to carriers' networks.

"The wireless industry is the last place regulators should be looking for alleged anti-competitive behavior," said policy analyst Ryan Radia. "The wireless market is intensely competitive, and consumers enjoy a dizzying array of competing mobile platforms and service arrangements." Consumers, he said, "can select from the open source HTC G1 to the walled-off iPhone and everything in between. In addition, practically every big wireless provider offers both long-term and month-to-month service options. Where is the anti-competitive behavior?"
 He also said the FCC itself is to blame for limiting competition in wireless services. "Why isn't the FCC investigating its own misguided allocation of America's airwaves, a huge portion of which remains subject to decades-old rules that protect vested interests at consumers' expense?" Radia asked. "If the FCC is truly interested in promoting wireless competition, it should simply expand the range of spectrum up for auction. If more frequencies were on the market, their prices would decline, and more firms could try their hand in the wireless business."

The FCC, however, said its inquiry on innovation would include the potential for granting access to more spectrum and using spectrum more efficiently. As part of the innovation effort, the FCC will also reassess how it measures competitiveness in its annual wireless-competition report. The FCC will consider extending the report's metrics beyond the number of carriers competing in a given area and carriers' pricing and offerings. The FCC is considering an extending the report to include network-equipment vendors, tower providers, handset makers, applications developers, content providers, how new technologies might affect competition, and the differences in competition between urban and rural areas.

The inquiry on carriers' billing practices will include use and overage charges and how difficult is it get unauthorized charges removed from bills. The FCC will also look into how carriers inform consumers about their service options, service plan details and switching carriers.


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