The mobile-phone industry finds itself confronted by a new net neutrality bill in the House, a development that adds to mounting pressure on the Federal Communications Commission to force wireless carriers to allow third-party devices/applications on networks and to forbid them from interfering with digital traffic.
House telecom subcommittee Chairman Edward Markey (D-Mass.) and Rep. Chip Pickering (R-Miss.)’s net neutrality bill adds a whole new dimension to a debate likely to overshadow all other telecom-tech issues this presidential election year. Indeed, the already huge stakes for cellular carriers – whose business models emphasize content delivery through Web-enabled mobile devices – will be magnified if net neutrality-friendly Democrats capture the White House in November.
Markey – perhaps realizing such a combustible issue would have trouble getting through Congress this year and would face a presidential veto even if it did – may simply be laying the foundation for a legislative strike next year.
“In Washington, everything in 2008 is about 2009,” said Blair Levin, a telecom analyst at Stifel, Nicolaus & Co. Inc. at a luncheon briefing on Capitol Hill.
Pressure rising
The cellular industry, criticized for blocking phone applications and keeping handsets largely tethered to their own networks, has already witnessed signs of potential government intervention in network management. The FCC is considering a petition by Skype Ltd., an Internet phone software company, to confirm a consumer’s right to attach third-party applications and devices to wireless networks along the lines governing wireline networks under the agency’s 1968 landmark Carterfone decision. In addition, the FCC last month launched a rulemaking to determine whether mobile text messages are covered non-discrimination provisions of the telecom act. Public comments are due March 14. Consumers argue government must step in to halt content or traffic discrimination on wireless networks.
The cellular industry, which argues additional government regulation is unnecessary in the competitive wireless sector, does not want to see the Markey-Pickering net neutrality bill gain a head of steam.
“This bill is an attempt to cure a problem that simply does not exist,” said Steve Largent, president of cellular industry association CTIA. “Overwhelming evidence collected by the Federal Communications Commission, the Federal Trade Commission, and independent research analysts proves that wireless broadband adoption is spreading like wildfire across this country. This wouldn’t be happening if consumers weren’t getting the service, value, and access to content they desire.”
Largent added: “These are serious issues for carriers and consumers alike, and we believe a thoughtful and balanced examination will lead to what we already know – government intervention is not necessary.”
700 MHz option
A third of the 700 MHz spectrum being auctioned will be subject to an open access condition. Verizon Wireless, AT&T Mobility and T-Mobile USA Inc. have indicated they would embrace open access, but public interest groups remain skeptical whether national cellular carriers will actually make good on their commitments to date. “The devil is in the details,” said Gigi Sohn, president and co-founder of Public Knowledge.
Markey sought to head off criticism his bill likely will face in months to come from advocates of a hands-off approach to the Internet, the source a still-growing broadband access market dominated by Bell telephone and cable TV companies that wireless carriers would like a bigger share of.
“There are some who may wish to assert that this bill regulates the Internet. It does no such thing,” Markey stated. “The bill contains no requirements for regulations on the Internet whatsoever. It does, however, suggest that the principles which have guided the Internet’s development and expansion are highly worthy of retention, and it seeks to enshrine such principles in the law as guide stars for U.S. broadband policy. The bill tasks the FCC with the job of conducting an assessment of broadband practices and consumer rights. Finally, it requires the FCC to hold eight broadband summits around the nation and to report back to Congress on its findings and any recommendations for further action.”
The Internet Freedom Preservation Act of 2008 directs the FCC to initiate a rulemaking that would assess, among other things, the potential of policies for promoting openness in spectrum allocations.
Carrier action
NARAL Pro-Choice America last year had a dust-up with Verizon Wireless after the No. 2 cellular carrier initially rejected its application for a short code it wanted to use to transmit wireless alerts to supporters. After the controversy gained national media attention, Verizon Wireless promptly reversed course and gave the abortion-rights organization access to its network.
Rebtel, a Voice over Internet Protocol firm that offers low-cost international calling on mobile phones, has complained about being turned down by Verizon Wireless, Alltel Corp. and T-Mobile USA in requests to secure short code-enabled text message rights. Verizon Wireless said it is standard practice to withhold short codes from companies with whom it competes.
Last week, Rebtel said Verizon Wireless broke off negotiations to resolve the dispute. Rebel said it was informed by Verizon Wireless that the carrier would take its chances in the FCC’s texting rulemaking.
