Wireless Industry Fretful over FCC Homeland Security Bureau

“I look with some concern with respect to a Homeland Security bureau at the FCC,” Cingular Vp-Federal Relations Brian Fontes said: “We want to make sure that our networks are not so readily available on any Internet site or a network itself can be harmed by the information submitted to the government.” Fontes said he recognizes the need for homeland security and public safety, but said “we have to be very careful and cautious” in imposing requirements on industry.

“What will happen now with the new Bureau?” Sprint Nextel Vp-Wireless Regulatory Luisa Lancetti asked. “We are critical infrastructure and we want to do our part and certainly recent hurricanes reflected that,” she said. “We need to make sure that it’s not in a way that again stifle[s] innovation, doesn’t set one mode for how these services should be developed and deployed, because that will be bad for the consumers and in fact for the national security.”

Speakers hailed the FCC for its help with hurricane recovery. Industry wants to know how it can have a single point of contact in govt. during emergencies, Scott said: “It was a big concern for us to prepare multiple reports to provide to the federal government.” One lesson, Fontes said, is that “I don’t see any regulation can adequately prepare anyone for this type of disaster; it’s our responsibility to address these disasters.”

Industry strongly feels it’s taxed excessively, speakers agreed. “We are in particular concerned about how do we change a regulatory mindset for wireless?” Scott said: “What we continue to see at all levels of the government is a perception of wireless as public utilities. That is why we see state PUCs looking at regulating wireless.” Scott said wireless customers pay an average of 15% in federal, state and local taxes, compared to 6% paid by most other services’ customers. “We are extremely concerned not only about the current level of taxation, but a growing level of taxation,” Scott said: “Just this year alone, we've had over 360 bills introduced in state legislatures to impose specific taxes on wireless providers.”

“It takes an enormous amount of effort to convince local representatives that wireless is not there to be taxed, it’s there to compete with other industries, and the idea of a discriminatory excessive taxation is something that we think very much disserves our customers,” Scott said. Industry should educate policymakers “about the benefits of competition and what competition brings to the marketplace,” Fontes said: “We need to work in communicating and providing evidence and documenting those sort of arguments in our education process.” Industry can better address consumer concerns through competition than govt. can do via regulations, Fontes said. There is a full agreement in the industry -- “preemption [of states] is essential; there needs to be, if anything, one federal set of rules,” Lancetti said.

Speakers agreed Congress shouldn’t make its broadband legislation technology-specific. “One of the dangers you always face here is trying to put labels and classifications on technology,” Scott said. He said the 1996 Telecom Act, which did that, “in the long run, really impaired the ability of different industry sectors to compete. It would be a mistake to try to come up with classifications or labels and say that this particular service should be regulated this way.” A competitive marketplace needs no regulation, unless there’s a clear evidence of market failure, Scott said. “I think broadband is broadband and deregulate it all, regardless of technology,” Jenkins said.

U.S. Cellular Vp-Legal & External Affairs Jim Jenkins said he wonders why wireless broadband isn’t part of broadband legislation flowing on the Hill: “It really belongs to them. I don’t know why it’s been excluded so far.” But Fontes warned: “We may be able to provide something in terms of relief for wireless, but we may lose sight of a broader picture, the desire to get wireless out of regulation completely.”

Fontes criticized APCO for refusing to accept NRIC recommendations on E-911 location accuracy measurement. The issue has become a huge fight. APCO is pushing for a PSAP-based accuracy measurement, while the rest of NRIC’s focus group working on the issue, including the other 2 public safety groups, backs a state-based approach. The focus group recently modified its recommendations, setting the PSAP-based approach as a goal once technology is available. It also outlined a process for the industry and public safety toward meeting that goal. But APCO refused to accept the new position.

“What I find frustrating is that there has been a lot of work done” and APCO -- the only one of the 3 public safety groups participating -- “decided they didn’t want it,” Fontes said: “I don’t know of any network-based provider or handset-based provider that will be able to meet the accuracy established by the FCC at every PSAP.”

Of a Dec. 31 deadline for 95% of carriers that chose a handset-based approach to be E-911 ready, Fontes said “all carriers have done a great job, given that [FCC] rules were written with arbitrary numbers, to try to provide services that we'd like our customers to have and to be compliant with E-911 rules.” Jenkins said “policymakers should be mindful that… if carriers had to divert a lot of resources to get these [E-911 ready] handsets into people’s hands, they are taking those resources away from other things they could be doing for consumers, such as network enhancement.” He said many PSAPs still aren’t Phase II ready, meaning many customers with Phase II handsets won’t benefit from them. “So we are chasing [this] for no real reason,” Jenkins said.

When asked, Jenkins said wireless industry consolidation is “still good for consumers provided that competition exists.” For example, he said, 88% of wireless customers still can choose among 5 carriers, even after a wave of recent mega-mergers. But Jenkins stressed “the FCC should be vigilant [about the] prospect of potential anti-competitive conduct” by big carriers offering roaming to smaller providers’ customers. “Articulating a national policy with mandatory automatic roaming would be in the best interest for competition,” Jenkins said. While many focus on CMRS services, “we've seen in the last couple of years explosion in other competing technologies, such as Wi-Fi, broadband, video services… The amount of competition available to customers has been increasing despite the consolidation in the CMRS industry,” Scott said.