FCC Drops Hammer on Wireless Carriers

The Federal Communications Commission unanimously decides to probe the state of competition and innovation in the U.S. wireless industry, including mobile broadband services. FCC Chairman Julius Genachowski stresses the importance of an open and competitive market while two Republican commissioners fret over the effect of additional regulations on competition.

The Federal Communications Commission unanimously voted Aug. 27 to launch two inquiries into the world of wireless communications, including the competitive and innovative state of mobile Internet providers and the billing practices of U.S. wireless and broadband carriers.
Chairman Julius Genachowski said the inquiries strike at the heart of what he called "core components of the FCC's mission": communications, competition, investment and consumer protection. He added that the FCC should be "relentless about developing policies" that put consumer interests first in the wireless marketplace.

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"We are at a pivotal moment in the history of the mobile industry. We are transitioning from a voice-centric world to a world of ubiquitous, mobile Internet access," Genachowski said. "This transition promises to increase the pace of innovation and investment, but only if we have an open and competitive marketplace that gives every great idea a chance to make its way to consumers so that the best products or services win."
Although the two Republicans on the FCC-Robert McDowell and Meredith Attwell Baker-voted to begin the probes, each voiced concerns about imposing additional regulations on the wireless market.
"The wireless market appears to be robustly competitive, which shows how well a light regulatory touch works," McDowell said. "While I'm voting in favor of this item, where we go from here is not quite clear. I hope we proceed with caution."
Baker added that she was wary of "benchmarking innovation" and questioned the FCC's overall regulatory authority to cover the wide range of the inquiries.
The CTIA, the trade group representing wireless carriers, took a similar attitude. "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."
Consumer and advocacy groups welcomed the FCC inquiries.
"The commission took exactly the right path today when it voted to look at all aspects of competition in the wireless industry," Gigi Sohn, president and co-founder of Public Knowledge, said in a statement. "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."
Andrew Jay Schwartzman, president and CEO of Media Access Project, said in a statement, "This investigation is long overdue. The country's four major wireless providers have enjoyed the fruits of market power for too many years, at the expense of the public's ability to gain widespread access to low-cost mobile broadband services."