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My Q&A With Steve Largent, Wireless's Top Lobbyist on Net Neutrality

The wireless industry is being picked apart these days, having to explain to federal regulators such practices as exclusive handset deals and whether it's competitive enough as carriers have consolidated in recent years. Now, it is pushing hardest against net neutrality at the Federal Communications Commission, ramping up its lobbying effort to prevent rules that would prevent AT&T Mobility, Verizon Wireless, Sprint Nextel and T-Mobile from deciding what you do with your cellphone.

Here's my edited Q&A with Steve Largent, CEO of the wireless association CTIA, on net neutrality:

You've said that regulation isn't necessary and that moves by AT&T on VoiP for the iPhone and Verizon's partnership with Google on Android show the market can take care of itself and is moving toward more openness. Others would argue that without new rules looming at the FCC, you wouldn't have seen AT&T and Google make those moves. Would you agree?
CTIA and our members have always said that we believe that the best regulator of a competitive industry is the consumer. If consumers don’t like something, they’ll tell us. This is the mark of a highly competitive industry. As AT&T said in their statement when they announced their decision about VoIP, they heard from their customers and this is what they wanted. The same is true for Verizon's announcement.

Where do you think Google Voice fits in the world of wireless applications? Is it a VoIP service in your mind or otherwise? Do you agree with lawmakers and AT&T calling for an investigation into the service and possible rural call blocking violations?
I think you raise some very good questions that should be looked into by the FCC. I think this issue highlights how expansive the wireless ecosystem has become, expanding well beyond just carriers to include infrastructure providers and handset makers as well as operating systems companies and applications developers like Google. This complicates the entire existing regulatory structure, as well as future application of any regulations, including net neutrality rules.

You've called for 800 mhz spectrum for commercial use. FCC Chairman Julius Genachowski said in speech at CTIA that you're preaching to the choir when it comes to the need for more spectrum. But he fell short of saying how much he thinks needs to be unleased for commercial licensed use and how much for unlicensed uses like WiFi and white spaces. What do you think is an appropriate way for FCC to think of spectrum policy?
We are confident that [Genachowski] will drive a forward-thinking spectrum policy. We knew this would be a great opportunity for us to show him first-hand the current and potential uses of wireless products and services – in such areas as health care, energy and transportation. This is an impressive and inspiring industry that despite the current economic conditions, is making a tremendous impact – both financially and socially – in our country and the world. As the chairman has said countless times, the FCC is a data-driven agency. That’s why we filed our spectrum paper [GN Docket No. 09-51] where we called for at least 800 MHz of spectrum. This number comes directly from an ITU study that said what a developed country would need by 2015.

So AT&T announced yesterday that it would invest some $38 billion in wired and wireless networks over the next two years. That is while net neutrality rules are on the horizon. What does that say for the argument that such regulations could hamper investment?
I think you have to talk to AT&T about the specific impact that net neutrality would have on investment. But I also would go back to one of my previous answers which is that the industry is very competitive and that to stay in the mix, you need to update and innovate, that is why you see so much investment.

What parts of Genachowski's proposal do you have most difficulty with? The reasonable network management part? Transparency? How about ability to attach any device? Explain please.
Again, the chairman has said that the FCC is data-driven and so we believe this is an opportunity for us to tell him our great wireless industry story which is based on research from well-respected third party organizations, and to explain our concerns with regulation. We also have the opportunity to detail how much has happened in the industry in the last 18 months. Memorializing these rules during this evolutionary, and revolutionary, period concerns us. You’ve seen us submit numerous filings to the FCC in the last few months and we plan to continue to do so. In regards to net neutrality, we believe that wireless and wireline are different, but until we see the NPRM which is to be released later this month at the FCC’s Open Meeting, I don’t want to speculate. I will say though that we believe that no prescriptive regulation in this area is necessary to facilitate the continued evolution and innovation of wireless broadband services.

By Cecilia Kang  |  October 9, 2009; 11:54 AM ET
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The "data driven" FCC should have announced a Notice of Inquiry on the need (or not) for "network neutrality" regulation -- on which there is no good record and on which no data gathering has been done -- and a Notice of Proposed Rule Making on "special access," where there is an extensive record. Instead, it did just the reverse.

The results could be devastating. The "network neutrality" regulations could essentially require small, competitive, and rural ISPs to buy more bandwidth before the "special access" proceeding makes sure that the bandwidth is available at a reasonable cost. This could be the "perfect storm" that will kill competitive providers.

As for the requirement to attach "any device:" As any WISP can tell you, attaching an improperly configured device, or one that conforms to an older version of the standard (802.11b instead of 802.11g), can slow a wireless network to 10% or less of its normal speed. A mandate that would force wireless providers to allow this would cripple wireless networks.

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

Posted by: squirma | October 9, 2009 2:14 PM | Report abuse

Brett, as you yourself said, the principles have been under discussion for over four years - "an eternity in Internet time", I believe you called it.

To quote myself, "The language of the principles has been repeatedly discussed and debated, in great detail, in fact ad nauseum, by economists, engineers, and computer scientists, including in the aforementioned ACM article (see∂=magazine&WantType=Magazines&title=Communications )"

The proposed network neutrality allows connecting any device to the network specifically ONLY IF IT WILL NOT DO HARM TO THE NETWORK.

Finally, as far as bandwidth goes, charging by usage, or limiting per user usage at peak times, even with generous allowances, would more than take care of the issue. An estimated 10% of non-business users tie up an estimated 80% of the bandwidth - which is what, 40 times more than the average user?

Average users - 90% or so of us - are already subsidizing the heavy user - paying the same price for 1/40th of the usage.

Video on demand (Netflix, etc) is exploding in popularity, and downloading multiple videos per day uses a lot of bandwidth.

Even a very modest additional charge or limiting for extremely heavy usage, maybe adjusted for peak and non-peak hours - would result in people self-moderating their behavior.

We don't just pay one price at the grocery store whether you buy one potato or an entire grocery cart full of steak. We don't pay the same price for a Jaguar as we do for a Ford Fusion.

There's no need to raise prices - in fact, you could probably cut prices for the 90% - and there's no inherent unfairness in charging more for people who get more. In fact, that's how most of the economy works.

Posted by: VirginiaGal2 | October 11, 2009 2:03 PM | Report abuse

When the FCC talks about attaching "any device" that does not include ones that are not configured correctly.
Plus, I don't understand how you conclude that you will need to buy more bandwidth, unless you've already concluded that is required because you cannot block certain applications or traffic. Net Neutrality doesn't license users to abuse your network. It just means that you will need to establish contracts with your users that puts limits on usage, but does not discriminate against users, the traffic or the internet providers on the other end. (If you do it right) you shouldn't need any more additional bandwidth to service your customers. Am I missing something here?

Posted by: scottburgan | October 12, 2009 9:51 AM | Report abuse

Ms. Kang,

Again, in your third question, you demonstrate that you are still unaware of the importance of the correct denomination of SI units, in this case the difference between "mHz" (milliHertz) as you had written and "MHz" (MegaHertz) as the reference should have been correctly denominated.

I wonder why this simple differentiation continues to challenge you. Your failure to correctly differentiate the two enables the intellectually challenged. It also points out that your editor should be replaced since they obviously do not know -- or appreciate -- the difference. You can choose to be correct, or you can choose to be blissfully ignorant. And enable the like minded.

Here is a simple analogy: would you like to be paid in "milliDollars" (small "m") or "MegaDollars" (capital "M")? Duh.

Thanks, sign me
Frustrated by the ignorance

Posted by: HoofHearted | October 12, 2009 11:30 AM | Report abuse

Scott, you are missing something. Our ISP prohibits residential class users, by contract, from operating servers. This allows us to give them a $30/month account in an area where bandwidth is very expensive. The proposed regulations would (among other things) interfere with this sensible contractual arrangement -- and, yes, require us to buy more and more expensive bandwidth.

For example, the rules would require us to allow users to attach devices to the network (e.g. a Slingbox, a bandwidth hogging video server) which would violate the duty cycle restrictions that (again) make it possible to offer reasonable prices. So, something has to give. Either we raise prices -- a bunch -- or become unprofitable and the business tanks. Either way, customers lose.

So, why is Cecilia Kang of the Post supporting this? I wonder whether the Google logo on this page, and/or the Google/Doubleclick ad (complete with privacy-invading tracking cookies) might possibly have anything to do with it.

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

Posted by: squirma | October 15, 2009 2:20 AM | Report abuse

Brett, the rules allow you to charge more for more usage. Right now, if your users are typical, 10% of your users are using 80% of the bandwidth - and the other 90% are subsidizing them.

If people use more, you charge them more. That is how demand is normally regulated - remember supply and demand in economics class? If you don't charge more for more usage, the demand is infinite.

A neutral net does not prevent, or even discourage, charging more for more usage (and, benefiting your customers, probably 90% of them could get a rate CUT.)

Posted by: VirginiaGal2 | October 16, 2009 7:44 AM | Report abuse

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