Wireless Lobbyists Step Up Defensive Against Net Neutrality
The wireless industry has been on a charm offensive, working overtime to lobby regulators, journalists and lawmakers to ease off one of the most vibrant sectors of the U.S. economy. After last week's proposal for new net neutrality rules that would include mobile broadband operators, that offensive has turned into a full-tilt defensive.
CTIA-The Wireless Association, the main trade group for carriers like AT&T, Verizon Wireless, Sprint Nextel and hundreds of handset makers and mobile software firms, is toting around a 35-page slide deck that outlines their case. They say the wireless industry has been among the most vibrant sectors of the economy and that it's moving too quickly to be regulated.
Even with a stubborn recession, CTIA's vice president of regulatory affairs, Christopher Guttman-McCabe, told me over lunch last Thursday, the wireless industry directly employs 268,000 people with jobs that pay 50 percent higher the national average of wages in similar categories and that carriers are on track to continue to invest this year and next, their average capital investments of $22.8 billion a year.
So why pick on us? That's the message by carriers by CTIA's six-member team assigned to lobby the FCC (and the 5-8 outside law firms hire to work on net neutrality and other wireless issues).
"All people are focusing on our industry, but it can get worse," Guttman-McCabe said "By no means it this a perfect industry but it does offer a pretty amazing consumer experience."
New rules at the FCC would prevent carriers from blocking technologies like voice calling service Google Voice or Skype on Apple's iPhone, which runs exclusively on AT&T's network.
Roger Entner, senior vice president of communications research at Neilsen IAG, said last year's auction of spectrum seemed to clearly show that net neutrality rules wouldn't apply to the wireless industry. One swath of the spectrum, which was purchased by Verizon Wireless, was assigned conditions that would allow any technology or service to attach itself to the network.
"The wireless carriers are understandably shocked because they've spent billions upon billions of dollars for spectrum which they were explicitly told would not have net neutrality rules," said Roger Entner, senior vice president of research at Neilsen IAG. "It's explicit because there is spectrum with net neutrality conditions on it, which means everything else is not."
The main argument against net neutrality rules has been the unique capacity, or bandwidth, constraints on wireless networks. That's why AT&T and other carriers prohibit video service like Sling Media's television application for wireless devices, which can take up too much bandwidth and slow down service for other users.
The FCC said last week it is looking into whether there is enough spectrum -- the radiowaves used to carry wireless phone signals -- to meet the explosive demand for data on mobile networks.
Consumer advocacy groups say the wireless lobby is jumping ahead of the gun. While the rules would apply to all platforms -- telecom DSL lines, cable, and wireless -- The proposed rules by Genachowski are part of a process that would explore how mobile broadband fits in the picture, officials at the FCC have said.
"Wireless data networks are absolutely more constrained than wireline networks but there is nothing in the Internet policy statements that say companies can't engage in reasonable network management," Kelsey said. "This seeks to set out what reasonable network management is, and puts some activities clearly in the unacceptable category and others in the acceptable category."
Wireless industry lobbyists began toting around their 35-page slide deck presentation in August when Congress and the FCC stepped up scrutiny of the industry. Around that time Sen. John Kerry (D-Mass.) and other key lawmakers began questioning practices of wireless carriers. They questioned if there was enough competition in the wireless industry and if a rise in text messaging prices was reflective of that. The net neutrality rules aren't expected to include exclusive handset contracts. But an FCC review of the wireless industry, which was launched in August in response to request by lawmakers, investigates how such contracts could harm consumers and competition.
September 28, 2009; 12:31 PM ET
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