CTIA's Largent on net neutrality, broadband reclassification and the fall show

with CTIA’s Steve Largent and Chris Guttman-McCabewith CTIA's Steve Largent and Chris Guttman-McCabe

The FCC continues to examine various aspects of wireless industry regulations. It recently voted to abolish the home roaming rule for carriers. And, of course, the FCC is considering how to move forward on potential net neutrality regulations. FierceWireless Associate Editor Phil Goldstein spoke with CTIA President Steve Largent and Chris Guttman-McCabe, CTIA's vice president of regulatory affairs, about net neutrality, roaming and changes to the CTIA's fall show.

FierceWireless: Have CTIA's objections to the draft rules for net neutrality that passed in October evolved at all?

Largent: They have not changed, and I don't think that the Comcast decision altered our view of net neutrality in the slightest extent. The court did rule as the Comcast order said the FCC couldn't move along the lines about managing the network. We still fee like the FCC has jurisdiction over the Internet; that's still fully functional. We still feel the FCC has ancillary authority to act on a number of fronts apart from the Comcast decision.

We don't think net neutrality rules should apply to anybody, and certainly not to the wireless industry. We need to take a step back. There's never been a violation of net neutrality rules by a wireless carrier, so that's never been an issue. We have adhered to the four [open Internet] principles to the letter of the law, and we'll continue to do that. 

Guttman-McCabe: And what Steve was referencing is that whether it's in the FCC's notice of proposed rulemaking or all of the comments that were filed in the first round, or anything that was addressed in the last two or three years in regard to net neutrality--none of it was wireless specific. None of it was about wireless. So when you look at the original four principles: We've said they've never applied to us, yet you've never seen any concerns raised in that space. As evidenced by all of the facts that Steve just gave you, what is broken? What is wrong in the wireless space?

FierceWireless: Why specifically do you believe net neutrality rules shouldn't apply to wireless networks?

Largent: I would go back to the things that we've talked about. No. 1, there's never been any need shown in the wireless space to apply these rules to us. There's never been any violation of the net neutrality principles. So why do you want to legislate or regulate when you don't need to? We're adhering to the principles. Secondly, I would add the value of wireless--the performance we've had for our consumers. Consumers are getting a great value with lower prices and more handsets available to them. It's a very competitive industry, and we're meeting consumer demand.

Another thing would be, look what happened in the auction of the C Block [of the 700 MHz band]. We have real-life proof of what happens when you start messing with the wireless industry and regulating it. With the C Block in the 700 MHz, Verizon ending up getting it, but they paid like half of the amount that everyone else paid in the B Block, but they got twice as much spectrum because of the encumbrances that were on that block that were put on there by the FCC. 

Guttman-McCabe: The C Block had the open-access requirements. It went for $4.7 billion. But it was 22 MHz nationwide. The B Block, which was right next to it, went for $9.2 billion for only 12 MHz of spectrum. That's an illustration of the uncertainty that comes with these rules and the impact. Clearly, there was reason. We look at three different comparative licenses: The Los Angeles 12 MHz B Block went for almost twice as much as the entire West Coast C Block went for, and Chicago and New York are similar, too. The person who bought L.A. could have purchased the entire West Coast for less money and twice the amount of spectrum.

Largent: These are the real consequences when you have the uncertainty in the marketplace that we're talking about. At the end of the day, this doesn't impair our companies--it impairs consumers, because it drives costs up and value down. So we think the value that our consumers are getting to is unprecedented and really world leading.

FierceWireless: How would you characterize the dialogue CTIA has had with the FCC on the issue since October?

Guttman-McCabe: We've had a number of filings. We've had some discussions, but to be honest, we have focused and we hope going forward everyone will focus on the national broadband plan. So for us, it's been multiple, multiple filings in support or educating folks on the national broadband plan. It's been a real keen focus on making sure that everyone, not just the FCC, but everyone in Washington and in the states understands where we are with spectrum and the crisis that's brewing with getting spectrum into the pipeline.

FierceWireless: If the FCC decides to reclassify broadband as a Title II, common-carrier service, what will be CTIA's response?

Largent: That's a premise we don't even want to walk down. So we're not assuming that they're going to that, and we don't want to assume that. So we're going to be busy educating all of the members of the commission as well as members of Congress about why we don't want to go down that road, and of all of the tremendous benefit that has come from following Clinton-era policy decisions, actually under Chairman [William] Kennard, to do a light regulatory touch for this industry. And I think all of the benefits that you could look at--the Internet and the wireless industry together--you could say it was because the federal government had the foresight to walk down this road of a light regulatory touch that we've been able to produce the results that we have. You talk about the creation of Google and iPhones and everything else--Facebook, Twitter--come about under this light regulatory touch. We think it would be unwise to try to change courses now.

FierceWireless: Will CTIA take legal action if the FCC does reclassify broadband? What's the backup plan if the FCC takes that route?

Largent: I think most legal experts would say we'd have a range of options at our disposal. But we're not even thinking about that right now. We're really focused on the education process. The chairman to his credit has said, to his credit, on multiple occasions and in multiple venues that he's going to run a fact-based FCC. And we take him at his word. We believe him. And everything that he's done to this point has been exactly that. If he continues down that road, we think the facts are on our side. And we're going to keep educating them as to how that would impact us negatively, and just trying to bring them up to speed.

If I were writing this column, and I wanted to put the heading there that would most clearly enunciate my personal belief about net neutrality, it would be that competition works better for consumers than does regulation. Because that's really been my mantra since I came to CTIA back in 2003 until today, and it hasn't changed a bit. And I think that our track record speaks glowingly of that fact.

FierceWireless: What is CTIA's reaction to the FCC's move to abolish the home roaming exclusion, as well as to look into whether mobile data roaming should be automatic?

Guttman-McCabe: The reality is that this is one of those issues where our members are split. We've been watching and hoping that some of these issues can and will be solved within the industry. We're hopeful that roaming negotiations can be worked out such that our small carriers, our medium carriers and our large carriers--that it's done in a business-to-business environment. So that's where we've been focused, trying to facilitate intra-industry solutions to the extent possible on these issues.

FierceWireless: Is automatic mobile data roaming something that you hope isn't imposed on the industry?

Guttman-McCabe: I would hope, and we do hope, that this issue is one that prior to the FCC having to take action, can be addressed within the industry. ... I know that a large number of CTIA members have data roaming agreements. I know that there are some concerns about moving to the fourth-generation agreements. Our hope is that it can be worked out. We try not to suggest the competitive industry can work to solve things and then to move to the FCC for solutions. We try to have issues worked out generally within the competitive industry.

FierceWireless: Why did CTIA decide to rebrand the fall show as "CTIA Enterprise & Applications," and what does it say about the move toward vertical industries, such as healthcare and energy?

Largent: It's happening. It's interesting because when it was IT & Entertainment, that's what we were doing. And yet as our industry has continued to grow and prosper and evolve into more and more different industries, from healthcare and smart grids and transportation and all of these different verticals, we've obviously recognized through our show and wanted to keep our show named appropriately for the industry that we represent. We just felt like the "Enterprise & Applications" was a more appropriate title for the show. It actually is a broader category than IT and entertainment, and that's what's really happened in our industry. We've broadened out, so we're really reflecting a lot of different industries within our show now.

FierceWireless: What will be the main differences that show attendees will see?

 Largent: I think you're going to see, as we saw last year for the first time at what we used to call the IT & Entertainment show, was the expansion of all of these verticals. I think they're going to see that on steroids this year. We're having a number of different pavilions that are highlighting all of these different verticals, and these companies are coming out of the woodwork. And it's really, really exciting to see how they're taking our technology and applying it in a specific way to help their business model and opportunities.

FierceWireless: Looking out beyond the shows that have been scheduled, will CTIA ever consider changing the dates of the spring wireless show, or flip it with the fall show? If not, why not?

Largent: We talk about that every year. We talk about strategically where the best place is to have our big show, then where we'll have our smaller show. We're comfortable with where they're at now. Since we began our show, the show over in Europe, GSMA [Mobile World Congress in Barcelona, Spain], kind of sprung up out of the blue. It creates some competition.

We still feel like for the purposes that we have our shows, where we have them right now is positioned in the best place.