FCC to Probe Wireless Industry

The Federal Communications Commission today approved a broad inquiry that could lead to sweeping changes in how the commission evaluates the wireless industry.

The inquiry into FCC standards for evaluating the state of wireless communications in the United States will be divided into three broad categories: competition, innovation and consumer access to accurate information about wireless services. The FCC passed all three notices unanimously and commissioners said they were essential to updating how the FCC judges the health of the American wireless industry.

Wireless site survey

Joel Taubenblatt, the chief of the broadband division for the FCC's Wireless Telecommunications Bureau, said during his presentation on wireless innovation that the inquiries on innovation would look at how the FCC could spark innovation by asking "questions about what metrics and data sources we should be considering and how we can compare ourselves to other countries." Taubenblatt also said that the inquiry would also consider new ways for the FCC to open up new spectrum and to optimize the spectrum currently in use.

In terms of promoting competition, the FCC said that it will look into new metrics that it hopes will create a more fine-grained picture of the competitive state of the wireless market. For instance, the FCC will not merely look at how many wireless providers operate in a given area, but also at how new network technologies will affect competition and how wireless technologies differ in both rural and urban areas.

Commissioner Michael Copps said that in voting for the inquiries, the FCC was taking a step toward better understanding the wireless industry's strengths and weaknesses. While Copps praised the industry for making several key advances over the past decade, he said that he had concerns about both consolidation within the industry and the high costs that American consumers pay for their wireless services. A recent study by the Organization for Economic Cooperation and Development found that Americans pay among the highest bills annually for their wireless phone service.

"Wireless bills remain a monthly agony for consumers," he said. "Consumer protection must always be front and center... and the market, I think, is not maximally competitive."

Commissioner Robert McDowell, while supportive of the measures to examine FCC data collection on the wireless industry, disagreed with Copps' assessment of the U.S. wireless industry and said that the industry had succeeded as much as it had due to a "light regulatory touch." McDowell said that there was "more competition" coming to the industry in the near future from services delivered over the 700MHz band and through open "white space" spectrum that the FCC approved for use last year.

The inquiries on the wireless industry are yet another signal that the FCC under chairman Julius Genachowski is taking a much more hands-on approach to regulating the telecommunications industry than it did under former chairman Kevin Martin. The commission this month launched an investigation into why Apple had decided to not allow the Google Voice application onto its popular iPhone handset. Additionally, the FCC is looking more deeply into why many areas of the country lack access to broadband services as part of its national broadband plan.

And the FCC isn't the only federal agency that's giving the wireless industry closer scrutiny under the Obama administration, as the US Department of Justice last month began contemplating whether to launch an investigation into the exclusivity agreements that devices manufacturers often sign with incumbent telecom carriers. At issue, according to a report in the Wall Street Journal, is whether having exclusive rights to certain high-profile wireless devices such as the Apple iPhone and the Palm Pre gives larger carriers an unfair competitive advantage over smaller wireless carriers that can't afford to pony up the cash needed to get top devices on their networks.

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