You might call it industry’s summer of discontent.
Where to begin?
The Federal Communications Commission saw fit to attach conditions-public safety and open access, specifically-to a tad more than half of the cherished 700 MHz spectrum anxiously anticipated by the wireless industry and first responders for a decade. Being highly controversial and apt to turn auction results into a litigious, NextWave-like morass, the FCC’s 700 MHz ruling may hinder 4G deployment in the United States.
Just to name a handful of the flash points for industry in recent months:
l The FCC made the wireless industry the fall guy in its initial stab at universal service fund reform, notwithstanding the agency’s oft-repeated, heartfelt promises not render rural America a collection of second-class citizens in the Information Age;
l Federal regulators again tagged cellphone carriers with fines for failing to meet enhanced 911 obligations and then poured salt in the wound by siding with public safety on the formula for determining location accuracy compliance;
l The industry’s dogged campaign for a national regulatory framework got turned on its head and suddenly became a bad joke when lawmakers proposed a federal regime in the form of a sweeping wireless consumer protection bill;
l Roaming and special access became greater wedge issues dividing small, medium and large cellular carriers after the FCC finally stepped in to address two festering industry issues.
l The cellular industry, however, was united in urging the FCC against getting too ambitious in protecting proprietary phone data of subscribers;
l President Bush rejected industry’s plea to overturn the International Trade Commission patent infringement/import ban edict against Qualcomm Inc.;
l The Department of Justice continued efforts to force wireless carriers to be more of a partner than industry believes the law allows by pushing for additional wiretap capabilities;
l Missouri highlighted just how messy and expensive state wireless tax conflagrations can get.
On the other hand, looking back on the bygone, long hot summer, the Superior Court of the District of Columbia tossed out six brain-cancer lawsuits. And, hey, how about the smashing success of Apple Inc.’s iPhone, though the price cut/rebate flap did take some shine off the marquee handset once thought to be exclusive to AT&T Mobility before hackers reminded us again that they rule. And then there indications Congress might extend the Internet tax moratorium four or so more years. Yes, it is an embarrassingly small list of positives on which industry can hang its hat.
Not running for cover
Normally when things go wrong in this town, the knee-jerk reaction is first to point fingers-the Blame Game. That’s followed by endless recitals of adult versions of the-dog-ate-my-homework excuses.
Yet, the cellular industry’s top lobbyist, Steve Largent, is not running for cover. He does not hesitate to state the buck stops with him. It doesn’t make his problems with the FCC, Congress or members of his industry association any easier, but it makes the CTIA president different in a town of where accountability is a foreign concept and idiotically regarded as a weakness.
At the same time, Largent is not shy about saying policymakers and two cellular industry heavyweights-at pivotal moments-may have helped influence the outcome of major decisions that stung industry so badly.
“I was really disappointed with the FCC decision to essentially attempt to box out the CMRS [commercial mobile radio services] industry on the most prized portion of the spectrum,” said Largent in an interview in early September. “It could be at the end of the day, that one of the wireless carriers goes ahead and bids on it and makes something work out of that. I don’t know. It’s too early to tell. At least on the surface, sitting from my chair and not having talked to anybody within the industry, my feeling is that what the FCC essentially did-taking 10 megahertz and giving it to public safety in addition to the 24 megahertz they already had and taking the other 22 megahertz of the upper band and creating an open-access regime-that the FCC essentially blocked out wireless carriers from being involved in over half of the spectrum. I view that as a failure on our part to communicate the ramifications of that.”
However, it didn’t help matters that industry’s consistently strong opposition to 700 MHz license conditions was undermined at the 11th hour by the retreat by AT&T Inc.-parent of the No. 1 wireless carrier-on an open-access provision championed by FCC Chairman Kevin Martin and ridiculed by consumer groups for being too modest.
Likewise, Largent’s CTIA expended considerable political capital to persuade the Bush administration to nix ITC’s ruling against Qualcomm only to see Verizon Wireless ink a $200 million licensing dealwith the U.S. high tech firm-Broadcom Inc.-that initiated the patent complaint against the San Diego-based CDMA giant. “We just feel like we’re Charlie Brown and they’re Lucy with the ball,” Largent half-jokingly stated.
All said, there is a lot of second-guessing about what Team Largent could have done better or what it might have done wrong to put the mobile-phone industry behind the proverbial eight ball on so many policy fronts. And yet, seemingly relentless forces are at work in the policy arena that no lobbyist-no matter how well paid or connected-appears capable of stopping.
Outside influences
Take 700 MHz. In a post-9/11 world where interoperability and broadband capability remain unfulfilled, the Martin FCC was more or less politically obligated to defer to first responder-wireless broadband backers that succeeded in framing the 700 MHz debate as the last best chance to give consumers another broadband choice and to give brave police, firefighters and medics the communications tools they need and deserve.
Meantime, while it is true wireless and Internet technologies are increasingly converging in mobile devices, the administration-already harangued about this country’s sub-par global ranking on broadband penetration-lacks a wireless competitor to do battle with the cable TV-Bell landline broadband duopoly. If there is going to be such a wireless broadband juggernaut, consumers undoubtedly will want the same freedom and flexibility to move applications and devices on and off a fat wireless pipe as they’ve become accustomed to with high-speed cable and wireline Internet access. Thus, Martin’s concession to allow limited open access-though not unbundled wholesale-on one-third of the 62 megahertz up for auction early next year.
In a similar vein, the more than 240 million cellular consumers quite simply want their wireless devices to work in good times and during emergencies with the same high-grade quality and reliability of the best wireline network on earth. As such, American telecom consumers are simply spoiled and inherently will forever have exceptional expectations of cellphone service. That is why there will be ongoing efforts at the federal and state levels to write wireless consumer protection into law.
Playing politics
And then there is the shifting political landscape. If industry thinks the wireless consumerism revival is bad as a result of the Democratic takeover of Congress in 2006, it could get worse next year. Democrats could take the White House and pad their majorities in the House and Senate. Such a scenario would effectively torpedo industry’s push for expanded federal pre-emption-manifested in a national regulatory framework that would dramatically marginalize states on such issues as billing, marketing, service and contracts (early termination fees in particular). Largent has all this to look forward to as he enters his fifth year as CTIA chief.
Largent, a former Republican Oklahoma congressman and a professional football Hall of Fame member, does not feel he has do fancy footwork in making industry’s case before the FCC and Congress. Largent said he has a cordial relationship with the FCC’s Martin.
“I am very upfront with him. I’ve always been totally honest and told him exactly what I thought,” said Largent. Like accountability, straight talk is a rare commodity in Washington. It does not guarantee policymakers will see things your way, but the tack tends to keep you in the game no matter which major political party is running the show. And that is not inconsequential. For there is no time clock on policymaking. It’s a perpetual game, with ever-changing momentum shifts. And political seasons change.
