FCC official: No need to mandate 'open' mobile networks...yet

Update at 10:05 a.m. PST Wednesday: A Copps aide called us on Wednesday to say that his boss didn't intend to give the impression that he opposes new regulations on the wireless industry. He pointed us to a sentence in Copps' speech (PDF) in which the Democratic commissioner said he would "enthusiastically support" the FCC's declaration of "general principles for open wireless platforms" at any time. Copps did then go on to say, as we reported Tuesday, that he would not "strongly object" to industry-led initiatives, "at least for now."

WASHINGTON--A key federal regulator on Tuesday said he's not ready--yet, at least--to pursue new rules requiring wireless carriers to open their networks to whatever devices or programs their customers desire.

FCC Commissioner Michael Copps

(Credit: Federal Communications Commission)

Federal Communications Commission Democrat Michael Copps said he would not "strongly object" to sitting back, for now, and watching how recent "voluntary" promises by wireless carriers pan out. For instance, ostensibly because of the threat of regulation, Verizon Wireless recently said it would generally start allowing any phone to run on its network, and allow any application to run on those devices, by the end of this year. Other carriers, such as AT&T Wireless have also been playing up their perceived openness as a marketing tactic.

"I hope it is as good as it sounds," Copps told attendees at an event here organized by the New America Foundation. "But we have to ask: has the reality shifted quite as much as the rhetoric has shifted?"

Hesitance to new regulations would hardly be noteworthy coming from some of the more free-market members of the commission, such as Chairman Kevin Martin or Commissioner Robert McDowell. But from Copps, it seems at least a bit unusual. After all, he has said he would like to see the FCC pass more stringent rules with regard to Net neutrality, or the issue of prioritizing Internet content.

Copps nevertheless tempered his less-regulatory intentions on Tuesday with a warning of sorts for wireless carriers: we'll be watching you.

He ticked off a number of areas that could prompt concerns down the road. Atop his list were worries about tricks wireless carriers might play with their pricing: for example, charging their customers extra fees to bring their own handsets to their plans, or requiring consumers to buy voice plans in addition to data plans when they only want to make VoIP (voice over Internet Protocol) calls on their wireless phones.

And if carriers generally price their rate plans and initiate contracts based on the idea that they're subsidizing the cost of a phone, "then shouldn't I get a better rate if I bring my own phone?" Copps asked. "And I shouldn't have to accept an early termination fee either."

Copps said he'll also be looking at whether consumers are stymied in moving their phones from one carrier to another, and whether entrepreneurs designing new mobile devices or applications are being hampered by seeking permission from wireless carriers before offering their products.

The FCC has already taken a small step toward requiring wireless carriers to open up their networks. As part of its rules for an upcoming auction of vacated broadcast TV spectrum, the agency is obligating winning bidders on a small slice of that 700 MHz spectrum to abide by "open access" principles.

But the practical impact of those requirements more globally remains less clear, which has prompted some public interest groups and VoIP company Skype to agitate for broader rules.

T-Mobile technology policy director Bob Calaff, who spoke on a panel after Copps, said the government needs to be careful about imposing new obligations on wireless firms.

"We're not talking about a toaster or a refrigerator or even a landline phone or a PC," he said. "We're talking about devices that are integrally connected to the network. When we head into these policy debates, we have to be mindful that these are integral components of the network and that one size does not fit all."

[Cord Blomquist]

Competition Works Better Than Mandates

The FCC shouldn't mandate openness in networks for the same reason the government shouldn't declare that Costco is a better than Giant or Safeway. Open and closed networks, like wholesale and retail grocery stores, are just different business models. Recent history has shown that closed models don't work in many cases. In the last few years, the music industry has dropped DRM, opening tracks to a whole new world of hardware. Similarly, telecoms like Verizon are finding that openness can help them in the marketplace. But even if openness works well in these cases, that's not reason to say it works in all cases. Just as we wouldn't tolerate the feds mandating that Giant and Safeway start selling pallets loaded with gallon jars of mustard, we shouldn't allow the FCC to make decisions that should be left to consumers in a free and open marketplace. If we give closed system the chance to fail on their own, we won?t have to regret shutting them down prematurely. Similarly, if some consumers opt to go with closed services because of greater security or simplicity, we?ll be glad to have left those options open. Ultimately, an open market is more important than any individual business model.

[Kesteral]

What FCC and Music industry are doing are the same thing.

The Music industry has NOT dropped DRM, they are experimenting with a more open business model to see how responsibly consumers use it. Just as the FCC is waiting to see how honest the wireless phone companies are about opening up their networks. If either group see an abuse of the system, they will attempt to go to a more controlled system. Whether they can or not will be an intresting study on the rights of businesses and government.

Personally, I can easily see the music industry going quickly back to DRM, but I have trouble seeing the FCC having the power to make the wireless companies open up their networks.

[ethana2]

these are integral components of the network and that one size does not fit

Can you say 'horribly designed network'?

So tell me; do we give CDMA and GSM the axe and rollout WiMAX everywhere? I'm more than ready to do it. This is what we want; if your methods aren't good enough, do let us know. We'll relieve ourselves of them.

[Renegade Knight]

Free Market

The only thing that keeps markets free is regulation. Hate to say it but it's true. There is a balance to maintain. As business buy each other up to 'grow' the marke becomes less and less free.

Plus what free market are some talking about? The free market to be a Wireless Telephone company or the free market to make phones that work on the various wireless telephone companies systems?

The free market has done wonders for my ability to buy a phone to plug into my land line. There really isn't much of a free market for wireless. I can't get the phones I like to work with the carrier I like due to a lack of a free mareket.