CTIA IT 2009 Scorecard: Policy and regulation

Whose profile is rising? FCC Chairman Julius Genachowski. Genachowski used his keynote appearance at the show last week to reiterate his argument for net neutrality rules for wireless, showing that he has the wherewithal to bring the issue right to the doorstep of the wireless industry. The action was surprisingly brazen as the agency's chairman spoke directly, virtually face to face, to the industry's wireless heavyweights--and laid out in no uncertain terms that he fully intends to move forward with a plan that some argue could bring already-strained wireless networks to their knees.

Of course, like any politician worth their salt, Genachowski offered an olive branch while wielding his regulatory sword: He promised to ease tower-siting restrictions, thereby smoothing the process of adding new cell sites to wireless networks. And perhaps more importantly, he promised to work to free up additional spectrum for an industry built on turning bandwidth into profit. (Further, in an action likely related to the chairman's quid pro quo, the FCC opened an inquiry on special access fees, which wireless carriers including Sprint Nextel and T-Mobile USA have bemoaned as exorbitant network interconnection expenses imposed by telecom giants like Verizon and AT&T.)

Whose profile is falling? CTIA (and, by association, AT&T, Verizon and other major wireless carriers). CTIA is the wireless industry's leading trade association, primarily representing Tier 1 wireless carriers, and is tasked with pushing their policy agenda. The association generally has argued for less government regulation and oversight, be it in the form of taxes on wireless service, investigations into carriers' business practices and regulations on network management. Following years of relatively lax supervision under the Bush administration, the CTIA in recent months has been buffeted with inquiries into industry's exclusive handset deals, competition and a range of other issues.

And net neutrality stands as perhaps the wireless industry's greatest worry, since it would essentially require wireless carriers to become the dumb pipes they have long fretted over. Thus, Genachowski's push to impose net neutrality stipulations on wireless carriers may represent the CTIA's most notable failing in the world of government policy. Indeed, if net neutrality guidelines are implemented in their most strict form, wireless carriers would be forced to support virtually any application, from Skype's low-cost international calling service (that would compete with carriers' existing and much more expensive international calling rates) to Slingbox's mobile video service (which is the off-deck alternative to carriers' branded mobile video offerings such as AT&T's CV video service and Verizon's VCast offering).

Of course, the outcome of this battle is far from clear. Genachowski has taken pains to make clear that the management of wireless networks must take into account bandwidth and capacity constraints. Nonetheless, the chairman appears laser-focused on protecting the "open Internet," and his push signals a potentially major wrench in wireless carriers' strategic landscape.

CTIA IT 2009 Scorecard: Policy and regulation