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Cellular South CEO Hu Meena on Net Neutrality

Hu Meena, CEO of Cellular South, doesn't have a beef with net neutrality rules on the plate at the Federal Communications Commission.

The provider of cellular services to 800,000 subscribers in Mississippi, Tennessee and Alabama said his firm spent $192 million to buy spectrum to build a mobile broadband network, expecting fully that net neutrality rules would eventually be taken up by the FCC.

"If you didn't see this coming, you had your head in the sand," Meena said.

What he's got a real beef with is the assertion by other wireless companies that the mobile market is competitive. And he's thinks the largest trade group representing them, CTIA-The Wireless Association, doesn't always speak for him.

Here are some highlights from a telephone interview with Meena and Eric Graham, vice president of government relations for Cellular South:

How would net neutrality impact your business and do you support a proposal to draft new rules?
Meena: We take a simplistic view of this industry. We believe consumers should pick any device they want, put on any network they choose, and access any lawful content they are interested in. And the transparency piece the chairman added is fine because we think consumers should get full disclosure of what they are getting into. We understand the proposal allows for managed services so it doesn’t give others using the tower a negative experience. And we want to ensure that we are able to make sure all customers have a good experience on the Internet.

What do you think about the 'any device' provision that appears to be in the draft proposal to be voted on next week? That provision would allow any consumer to attach any legal and non harmful device to any network.
Meena: We've fought against handset exclusivity, which is different from what you are talking about, but there is a lot of overlap. And one aspect of exclusivity deals is that it keeps devices from being portable. This will help devices to be portable, so you can put them on a compatible network. We think that is great.

The FCC is trying to figure out if there is enough competition in the wireless industry. AT&T, Verizon Wireless, Sprint Nextel and the trade group CTIA-The Wireless Association say there are multiple carriers for consumers to choose from, multiple software vendors to build on hundreds of devices. All signs of competition, they say. Do you agree?
Meena: No. It is a fact that in the second quarter of this year, AT&T and Verizon accounted for 80 percent of the net ads (new subscribers) in our industry. That is the number one indicator of health and growth in wireless industry. CTIA puts out so much information about competition of the industry, but just two carriers make up 80 percent of new growth. And now those two carriers control our industry and are using their market power to prevent a strong competitive environment.

How are they doing that?
Graham: You see it in exclusive contracts. Forty-six of the top 50 devices are under exclusivity. So as far as consumers are concerned, there is a monopoly for 46 of top 50 devices. So if you are a small carrier and can't get hold of those devices because they are under exclusive contract with a carrier, that means you can't compete.

Meena: Roaming contracts are another area. The big carriers are required to offer voice roaming for other carriers who don't have service in certain areas. So we don't have service outside our three states, for example. But those carriers aren't required to offer data roaming. So you can have a situation where a customer can be out of his network and on another network and can only use the voice on his Blackberry but not send email. Customers cannot fathom that.

Is that something your customers are facing today?
Meena: Yes, it's not just us, but all smaller carriers who can’t get data roaming.

Are large carriers flat out denying data roaming services on their networks to your customers? Or are there disagreements over the economics of doing that?
Meena: Some say no and other say, 'we are working on it.' Months and months go by and then they don’t do it.

Graham: This is a problem as we look at 4G (mobile broadband). Many carriers invested in 700 MHZ (spectrum) and we can't put together a 4G business plan without the ability to roam if everything will be data. This really limits competition in the future.

By Cecilia Kang  |  October 14, 2009; 10:00 AM ET
 | Tags: hu meena cellular south, net neutrality, wireless  
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Comments

Another highly biased story from Cecila Kang, who appears to be cheerleading for regulation of the Internet.

Her interviewee's support of "network neutrality" regulation is shortsighted. Such regulations would require him to obtain more bandwidth, and he has to obtain that bandwidth from AT&T. Since there has been no action on "special access" pricing, small cellular companies such as his are sure to be gouged for backhaul, severely impacting his bottom line.

What's more, if he is forced to allow such bandwidth hogging software as BitTorrent on the expensive spectrum he has purchased, it will quickly consume it all.

The article also fails to note that there are other wireless broadband providers than cellular companies. WISPs, who deal exclusively in Internet service, would be far more heavily impacted than cellular companies, who make most of their money nowadays from SMS.

Posted by: squirma | October 14, 2009 4:09 PM | Report abuse

Everyone likes to flame torrenting, but correctly applied it can save companies bandwidth and money. If you start with the premise that consumers will transfer a file one way or another, you're then arguing about how.

There is no more tiresome argument in all of the technology world than an argument over how to transfer a data file. At least we aren't arguing about uuencoding files anymore...

You can not claim to be innovative, or be supportive of innovation & be against network neutrality as a long term policy, that's just the fact of the matter. Disagreement is merely an indication of a serious amount of ignorance, and very little more than that.


Posted by: timscanlon | October 14, 2009 8:32 PM | Report abuse

The above is simply not correct. The only people who save money via BitTorrent are the content providers, and they do so by shifting the costs to ISPs -- multiplying them in the process. They save pennies, while the costs to ISPs are in dollars. For an explanation (with diagrams) explaining why, see my testimony before the FCC at http://www.brettglass.com/FCC/remarks.html

Brett Glass
Owner and Founder, LARIAT
The world's first wireless ISP (WISP)

Posted by: squirma | October 14, 2009 10:30 PM | Report abuse

Wow! What a way to tell Brett that he is an idiot and that you are omniscient (except for orthography...). Nice job, timscanlon.

"You can not claim to be innovative, or be supportive of innovation & be against network neutrality as a long term policy, that's just the fact of the matter. Disagreement is merely an indication of a serious amount of ignorance, and very little more than that."

Posted by: my_w123 | October 15, 2009 1:37 PM | Report abuse

Brett, you saw the recent breakdown of Internet traffic by protocol. P2P is a small (and rapidly shrinking) percentage of Internet traffic.

Streaming video is a large (and rapidly growing) percentage of Internet traffic. This includes ads, online TV shows, legal video downloads, etc.

When users pay for their bandwidth, THEY pay for ALL the costs, including the ISPs costs to provide that bandwidth.

Content providers do not need to pay for the consumers bandwidth a second time. That is simply a ripoff - because ultimately it isn't the content provider that will pay, it's the customer.

Instead of hurting everyone's access to content, keep the Internet neutral. Make the 10% of users that use 90% of the bandwidth pay more, and you don't need to gouge content providers, MANY OF WHOM PROVIDE CONTENT FOR FREE.

Posted by: VirginiaGal2 | October 18, 2009 8:46 AM | Report abuse

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