FCC takes a closer look at wireless industry
The Federal Communications Commission plans to look more closely at the wireless industry as it scrutinizes everything from the industry's billing practices to the state of innovation and competition in the market.
The commission, headed up by newly appointed chairman Julius Genachowski, on August 27 will open up two "notice of inquiries" to look at some of these issues. The agency announced its plans Thursday when it published the agenda for its August open meeting.
Specifically, the first inquiry will look at the state of competition and innovation in the wireless market. And another inquiry will examine the need for revisions to the truth-in-billing rules to ensure subscribers know what they are paying for when they look at their monthly itemized cell phone bills.
Chris Guttman-McCabe, vice president of regulatory affairs for CTIA, the organization which represents the big wireless operators in the U.S., said he welcomes the discussion on these issues. And he said his group is taking the FCC's inquiries as an opportunity to educate policy makers and the public about advancements in the wireless industry.
"There is a misimpression out there that the U.S. lags behind in wireless," he said. "And that's simply not true."
Indeed, five years ago it would be easy to say that the U.S. was much further behind in terms of technology and services than countries in Europe or Asia. But over the past couple of years the market has changed, and the U.S. is actually leading the world in terms of innovation. Guttman-McCabe points to the smartphone phenomenon and advancements in wireless broadband services as examples.
The iPhone, which many experts believe was a major step forward in terms of design and functionality for a mobile phone, was created in the U.S. It was also offered to wireless subscribers in the U.S. before anywhere else in the world. The same is true of other innovative phones. For example, the first device to use Google's Android operating system debuted first in the U.S.
What's more, the next generation of wireless broadband service is being led by wireless operators in the U.S., who are starting to deploy the world's first mobile LTE and WiMax networks. He also pointed out that U.S. cell phone subscribers use more 3G data services than any other subscribers throughout the world. And even though Americans may pay more per month for cell phone service, they actually use more voice minutes and services than their counterparts in other countries, which means on a per-minute basis, they actually pay far less than cell phone users in other parts of the world, he said.
Guttman-McCabe said the CTIA is also looking forward to providing information to the FCC about its "truth in billing" inquiry. He said the CTIA's biggest concern on this front is the fact that cell phone operators are being asked to be "tax collectors." He said that there are many charges on cell phone bills that the government has imposed that are essentially a tax. And he said in some instances those fees are not being applied appropriately. For example, he claims that much of the money collected for 911 emergency service is not used by some states to improve or maintain 911 services, but is instead used to fill funding gaps in other parts of the government.
At this point, it's not clear what the FCC plans to do as a result of its inquiries. But it is clear that this FCC is interested in gathering data to make decisions on policy, something Guttman-McCabe said is a welcome change from the previous FCC under then-Chairman Kevin Martin.
Guttman-McCabe said there were several decisions made by the FCC that had no data or information to back it up. One such decision involved a requirement imposed by the FCC that all wireless operators have at least eight hours of battery backup at their cell sites throughout the country.
The CTIA fought this requirement in court, arguing that it was too expensive and counterproductive when wireless operators were already using mobile generators that could be moved from location to location based on need. The wireless industry won its fight and a federal appeals court granted a stay while it continues to review whether the FCC should have imposed such a rule.
"The FCC chairman has suggested that across all industries he wants the agency to make decisions based on analytical data," he said. "That is good news for us, because based on the facts, we have a good story to tell. And this will help us dispel some of the misinformation that it is out there about the market."
But it may not be all smooth-sailing for the wireless industry as the FCC takes a closer look at some of the industry's practices. FCC Chairman Genachowski has already said that he plans to look more closely at the exclusive handset arrangements that have long been a common practice in the wireless market. The FCC questions whether exclusive deals, such as the one between AT&T and Apple to offer the iPhone, are actually hurting competition and consumer choice.
Another issue that is coming to a head right now has to do with network openness. AT&T and Apple have been criticized for rejecting a voice application for the iPhone App Store from Google called Google Voice. This application allows users to choose a phone number that if called will ring on multiple phones. It also offers other services, such as low-cost international calling and free text messaging.
The FCC asked the companies for more information about why the Google application was rejected from the App Store. The initial comments are due on Friday.
Guttman-McCabe said the CTIA is not overly concerned with these issues.
"It's good for the industry to be discussing these issues," he said. "But things are evolving so rapidly. The issues that were of concern a few years ago no longer exist today. And as long as the commission is looking at the facts, we think that will benefit the industry and consumers."
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
"Wired" broadband service providers do not:
1. restrict what software you can install on your PC.
2. restrict what data you can send/receive over your broadband connection.
Why are "wireless" broadband service providers allowed to do this?
Not true? Then why do civilized countries,such as Nigeria, have access to 2 mb/s upload speeds and US subscribers are lucky to get 200 kilobits?
Many countries -- Finland, Spain, some Baltic states, Italy, Israel, Japan, Singapore... and Nigeria (to name a few) have fully deployed HSUPA systems. Unlike US carriers they OPERATE THEM as such. The HSUPA spec allows 5.7 Mb/s upstream and 14.4 Mb/s downstream speeds, although some carriers,cap the speed at 3.6 - 7.2Mb/s.
No US carrier offers upstream speeds effectively higher than 200 kb/s;
downstream speeds can be all over the place - as high as megabit at noon (don'tcount on it!), and, typically, down to 100 kb/s at 5PM, as a matter of load.
To the gentleman who comments that "Nigeria's" mobile bandwidths are thank to sparse spectrum use... sorry, sir - it's hardly a spectral issue. Real 3G speeds are in the air\ there because (a) as infrastructure, the carriers run more than a single T1 to their towers, and (b) the repeaters are set to run full out to the 3G standard.
That Mr. Guttman-McCabe, this CTIA regulator spokesman, has the audacity to suggest that the US is anywhere near the world standard is outrageous double talk. He might well boast about the strengths of US banks.
Source? Get a passport and a ticket and... a grip on what the rest world is doing. ("Yes,we have indoor toilets and hot and cold running water.") Google "HSUPA" and "GSM" yourself.
Not just, uh, Nigeria...
Good luck with that wireless carriers!!!
They actually ought to encourage text messaging instead of voice, reducing voice usage would be a good way to save bandwidth.
Not if you look at the actual size of an SMS versus what they are charging. Let's run the numbers starting with the $5 for 250 messages so we have a solid baseline and then the $30 a month for a 5GB capped data plan.
SMS messages are usually around 140 characters long. As is this equals 140 bytes. So at 5/250 you're paying roughly 2 cents to send 140 bytes of info.
Let's figure out the same amount transfered for 2 pennies under the 5GB capped $30 data plan. 1GB = 1024MB = 1048576KB = 1073741824 Bytes. Multiplied by 5 is 5368709120 Bytes of data per month. At 5368709120/$30/100 and then muliplied by 2, the same 2 pennies is getting you roughly 3579139 Bytes of data transmission.
It just seems a little lopsided when you look at the numbers. I am a little suprised to find that they're paying a third party vendor to do this. Honestly, transferring such small amounts of data through a third party vendor seems to be obsolete for a function that could be controlled by the carrier and transmitted over the internet. It'd probably be a lot cheapier for both the carrier and the consumer.
If the same thing happened to you, would you feel like it was just coinsidence? Would you like to be called a conspiracy theorist? I don't put ANYTHING past big companies, although your probably a republican...or MAYBE you work for TMobile..lol
This statement is meaningless - and untrue for most countries, where the per minute cost is far less than here. If you look at the prepaid model - which most mobile subscribers in other parts of the world use - the per minute cost is much less; the reason being most phones that you buy outside the US for prepaid use are unlocked. If you want a new mobile, more than likely you will have to pay the full retail price for it.
Oh no the Telcos charge $40 for 400-500 minutes/mo. Roughly 10 cents or less. Is this worse than your landline? It's what I pay for my long distance. There are plans less than that as well, but that's if you use your minutes and you're not including often-used free #'s to your faves, etc or nights and weekends or mobile2mobile! Use 500 m2m and suddenly avg cost per min has dropped to 5c/min! Yeah, that is so wrong.
-2 Year Contracts w/ Cancellation Fees -- Explain to me how exactly this is competitive? If I'm getting crap service and want to get better service from someone else, I shouldn't be getting penalized for it.
-Text Messaging -- Don't even bother lying about this. We all know it doesn't cost hardly anything to send a text and the current rates that are charged make texting the most expensive data per byte to send in the world.
-Phone exclusivity and subsidies -- Let's be honest... The only group benefitting from phone exclusivity is the carriers. It's simply not a fair practice.
And phone subsidies shouldn't even exist quite frankly. You -- the manufacturer -- can't honestly expect me to believe that cheap plastic, no features phone based on decade old tech is worth $50-100. It seems like it's that way across the entire spectrum of phones. If people knew what it actually cost to produce these things, they'd be disgusted. I've got no problem with profit, but lets be reasonable about it.
The cancellation fee is to get money for the subsidized phone they gave you.
And phone manufacturers can charge whatever they want you don't have to buy their phone you know.
Free market is not having the market geared towards you.
Texting DOES cost money. There are text companies out there which are paid for their service. Is it 20 cents per message? No. Is it $5 for 250 messages? No. Is it wrong to profit in this country? Apparenty charging for a service people want is wrong nowadays. If you have 5 lines on a family plan and unlimited sms for $30 is that wrong? Or is it a good value?
I love how you seem to think that because phone service costs BILLIONS PER YEAR in just infrastructure cost that you pay for you think profit should also be limited because you just don't like it. Well I think that whatever you do for a living charges me TOO MUCH too, so lower your rate by 25% from now on.
You're right, the industry I work in is charging too much. It's called health care, and I'm working my damnest to help make it more cost friendly. There's a difference between making a profit and raking someone over the coals.
Really? I visited Sprints website and chatted with them. I asked them how I could get plan without contract. their response: "You need to have a 2 yr contract to take any sprint services". I asked how about if I pay full price for the phone or use my own phone? sprint response: "...it is mandatory to have two year contract with any sprint services". If the other carriers have similar policy, that could be considered collusion and anti-competitive.
---"Well a contract is a contract my friend. If you could simply walk out of them then why would we have contracts?"
Yes contracts should be binding. That's why the carriers want to force consumers into them. I can't wait til our utility company adopts this policy. yeah! wouldn't it be cool your utility co could require 2yr contract, but hey at least you'd get the coolest light bulbs for $10 instead of $25. That $15 more than makes up for being locked in a 2yr contract with a $200 penalty. Of course those light bulbs would NORMALLY cost $300 - yeah right. Oh and sorry, but you cant use those light bulbs anywhere else.
And he's (and millions others) NOT asking to be allowed to 'walk out' of a contract- he asking not to be FORCED into one. Contracts are like anything else, there are good ones, and there are bad ones.
---"The cancellation fee is to get money for the subsidized phone they gave you"
So why does the contract period start over with a new 2yrs of $200 termination fee hanging over us when we make ANY change to the plan. Wow! Did we just get a new phone? Did my old phone magically morph into a iphone? Oh that's right to get an iphone, i would have to pay current carrier $200 penalty, and then be forced into another ridiculous contract with another carrier. How is that competition?
Thank goodness our new gov is looking into this.
'My friend', you and the wireless carriers need to understand that: 'There's a new sheriff in town'.
Ah, but the free market is all about un consumers finding the company in the market gearted towards us. Better to tell them what we wan't so they can actully try to sell it to us.
as for our phones....ummm they do make the iphone in china if im not mistaken....so.we can safely say a prototype has prob been there maybe 3-5 years?..in there basement at that. please they are far beyond us and anyone else in technology.we invest all our plants over there. because its cheaper than what workers here want.sad but tru story.
why is it all bots and hackers and spammers 95% are of china/Korea...as much as we hate bots think about it.it takes real technology for those bots to do what they do and try to be so sneaky and or with such commands to follow.the day that computers run computers is already here.and we dont have the smartest ones :)
As far as they're phones they are cheap and ugly looking. Yes they may stick a 10mp camera on it but it ends up looking like a brick.
The iPhone while innovative has done nothing to improve wireless broadband. In fact, Apple's exclusive contract with AT&T and monolithic application control has, if anything, hindered innovation in broadband wireless.
\"Apple?s iPhone has wowed most of the globe ? but not Japan, where the handset is selling so poorly it?s being offered for free." (quoted from http://www.wired.com/gadgetlab/2009/02/why-the-iphone/ for everyone who needs a source or it cant possibly be true)
fact is the i-phone, while way advanced over here, is way behind over there. facts are facts like it or not in the global market of technology, we are behind
- by AluminumMonster August 23, 2009 7:13 PM PDT
- Its nice to see that the FCC is starting to take a look at the scumbag Wireless companies, but lets be honest we wont even see anything done for atleast 5-10 years at the minimum.
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