Ask the Experts
What are the regulatory issues facing the wireless industry in 2009?
James Brehm
Senior Consultant & Director
Business Development, Information & Communication Technology Practice
Frost & Sullivan
Looking forward to 2009, many regulatory issues will impact carriers and enterprises alike. Some of these challenges will need to be hurdled in order to grow the industry, while others will merely act as small stumbling blocks that the nimble will be able to overcome while only slowed down a bit.
First of all, we have just come out of the United States Presidential elections and are in the midst of turning power over amongst the political parties. While we’ve just waded through a regulatory minefield with the 700 MHz spectrum auctions and deciding on who gets to do what with what piece of the spectrum, we now have the “unfinished symphony” of the open network debate in the United States. The definitional stalemate being contested between Verizon and Google of what constitutes “open” will most likely be decided by the group put together by an entirely new FCC chairperson; appointed by President-elect Obama, and not the more conservative Bush White House FCC team headed by Kevin Martin.
The Asian market will be dominated by the same two predominant regulatory themes from yesteryear. Although China is the most populous country in the world, there is difficulty in gaining government approval and support behind technology decisions. With that being said, China is still one of the fastest growing markets in the world.
India, like China, is growing with subscriber rates far surpassing that of the Western world. Indian carriers, however, have been constrained by a government slow to decide on spectrum allocation and utilization.
Smaller ASEAN countries are facing a crossroads of a different sort. Similar to many European countries, many regulators in the region are looking at mandatory roaming caps to promote usage and growth for commuters who have been hit hard by high roaming charges.
Additionally, as we see an increase in mobile marketing, advertising, and banking, carriers will be restricted with regulation concerning privacy and use of information, while mobile consumers will embrace such restrictions. Finally, one issue that is sure to come up surrounds VoIP calls on wireless networks. This topic is set to be a dogfight between carriers and regulatory bodies such as the European Commission (and FCC) as voice is still a predominant driver of wireless revenues. Recently the EU antitrust authority sent questionnaires to wireless companies asking what technologies they use to manage, block, slow down, control or filter Internet-based voice calls. The year 2009 is sure to be another lively time for regulatory debate around the world, and one which will see continued growth of the global wireless industry.
Craig Clausen
Senior Vice President & COO
New Paradigm Resources Group, Inc.
In the United States wireless faces a few issues in 2009. One is the impending use of “white space” spectrum, which the FCC approved in November 2008. Although this ostensibly clears spectrum for more broadband wireless services, further wrangling is sure to follow the digital television switchover in February 2009.
Another is possible rulemaking, or conceivably even legislation encouraged by the new administration, on early termination fees charged by cellular carriers. Unlike many other parts of the world, most cellular users in the United States subscribe for service under multiyear contracts, which subsidize handset costs, but, of course, are a source of friction hindering the competitive process.
The salience of the issue has grown because the elevation of new handsets to rock star status is making many prepaid subscribers want to change services outside of their usual two-year contract window. Lowering or removing these disincentives would force providers to change their customer retention strategies, including marketing, handset subsidies, and service pricing structures.
But potentially the most sweeping issue is the extension of the regulatory concept of “universal service” to include wireless services, particularly for broadband data access. The trend of consumers dropping landline service in favor of a single cellular service (“cutting the cord”) has generated debate about the long-term utility of subsidizing rural wireline networks. Meanwhile, government officials and industry leaders have been sounding the alarm about a broadband gap between the United States and other countries, and some believe broadband wireless services are the right fix for low-density regions.
Requiring traditional broadband providers to pay into the Universal Service Fund (USF) and directing those monies to rural broadband wireless could be one way the new administration seeks to make a pro-consumer splash. Since its inception, wireless service has been the free-range beast in U.S. telecom; inclusion in universal service would be a dramatic change.
Joseph Farren
Assistant Vice President, Public Affairs
CTIA-The Wireless Association
With wireless technology at the center of nearly every citizen’s professional and personal life, it’s easy to understand how it makes its way into so many different public policy debates. And while CTIA will be focused on a number of regulatory items in the coming year, few issues will be more prominent or more important than the deployment of high-speed wireless broadband. As more and more Americans purchase 3G-capable handsets that function like a desktop computer in the palm of your hand, wireless is quickly being recognized as an obvious solution to America’s broadband challenges.
President Elect Obama has put broadband deployment at the top of his policy agenda and the wireless industry is excited about working with his administration to increase broadband opportunities for Americans in all walks of life. Toward that end, CTIA filed comments with the Federal Communications Commission in November that focus on how the $7 billion federal Universal Service Fund can be reformed to deliver next generation, high-speed wireless broadband to citizens in high-cost areas. These simple and straightforward reforms – together with sound tower siting policies and continued access to spectrum – would serve to quicken the delivery of wireless broadband services and, in so doing, help American workers become more efficient and more effective. Wireless is proving itself to be a critical part of not only stimulating, but remaking the American economy and we at CTIA are excited to be working on these important issues.