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FCC Not Ready to Pry Open Wireless Networks

But agency warns carriers its plans could change

By Martin H. Bosworth
ConsumerAffairs.com

January 23, 2008 

"We've seen with Wi-Fi, for example, that enlightened FCC spectrum policies and industry-led product development can deliver enormous benefits to consumers without too much regulation," Copps said. "But I (and I hope others) will certainly be watching carefully to see how the market develops."

Copps made his remarks at the "Free My Phone!" event sponsored by policy think tank The New America Foundation. The "event was convened to discuss the changing face of the wireless marketplace, and whether government regulations are needed to ensure that consumers have choices and protections.

In his speech, Copps mentioned several areas of contention that might give him and other regulators more impetus to act, such as carriers' control over features offered by phones linked to their network.

"As Chairman [Kevin] Martin demonstrated at an FCC open meeting, the European version of a leading manufacturer's popular phone comes with Wi-Fi, yet the identical model here in the U.S. comes without Wi-Fi—simply because the U.S. carrier wanted to protect its business model," Copps said. "How on earth do American consumers benefit when a perfectly good feature is disabled so their carrier can protect its revenue stream?"

Copps also discussed the termination fees that customers have to pay to switch providers, and the limited ability customers have to use their phones of choice on a carrier's network.

"If a carrier charges $50 per month for service...to recover the cost of subsidizing a handset, then I should get a better rate if I bring my own phone. And I shouldn't have to accept an early termination fee, either," Copps said.

Copps compared the current wireless network landscape to the Internet, saying "At home, using my PC, I get to choose between iTunes and Amazon.com, Google Maps and Mapquest, and Flickr and Shutterfly. I should have that same freedom of choice on my wireless handset, too."

The cell shell game

In the face of growing demand from consumers, advocacy groups, and Congress to streamline prices and open networks to customers, the wireless industry has been taking halting steps to meet the issue. All four of the major wireless carriers have agreed to prorate termination fees over the life of a customer contract, and to limit the fees charged for changing plans or service agreements.

Verizon Wireless announced in November that it would open its network to all devices and phones, but would continue to support its proprietary network and applications as well, creating a "two-tier" system for different users.

Sprint and T-Mobile have thrown their support behind Google's Open Handset Alliance, a coalition supporting the development of Google's "Android" open-source operating system for use on mobile phones.

And the FCC itself adopted the principle of "open access" for its upcoming auction of the 700mhz wireless spectrum, mandating that any network which buys the spectrum ensures that it opens access to all devices, regardless of their maker.

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