The FCC Offers You Its (Wireless Broadband) Protection

One of the major differences between the last administration's Federal Communications Commission (FCC), led by Chairman Kevin Martin, and the current administration's FCC, led by Chairman Julius Genachowski, is the new emphasis on consumer protection.

In recent weeks, the FCC has signaled interest in understanding why Apple disallowed GoogleVoice and other Voice over IP (VoIP) applications in its App Store, questioning whether Apple and AT&T Wireless are attempting to keep VoIP products off AT&T's network, the exclusive cellular and data network for U.S. iPhone users.

Beyond consumer protection, the FCC is also addressing ways to innovate and encourage investment, but not at the expense of consumer benefits. Last Friday, the FCC expanded upon its initial January vision of "Moving Forward: Driving Investment and Innovation While Protecting Consumers" by launching a Notice of Inquiry (NOI) into wireless service in both metropolitan and rural locales around the United States.

Genachowski explained why the FCC's approach in his comments surrounding the NOI release.

"With the advent of extraordinary and innovative new devices like the iPhone, Pre, and Blackberry," the Chairman said, "we are on the verge of a second transformation: from mobile voice to mobile broadband, from handheld devices that can do just one thing to smart mobile mini-computers that can do almost anything at all."

Genachowski also noted that a keen national consumer interest in the devices is matched only by a keen governmental interest in expanding mobile device and mobile broadband solutions.

"Recent projections indicate that smartphones may outsell personal computers by 2011," he said, "so it is essential that the U.S. become the leader in this new wireless marketplace."

Most of the other commissioners' statements echoed those of the chairman, but one new commissioner sounded a note of caution regarding expectations of implementing all the recommendations that might arise.

"This Notice will likely produce many recommendations for Commission action," said newly-appointed Commissioner Meredith Baker. "We must be wary, however, of implementing policies that could benchmark innovation and unintentionally hinder possible new entrants, technologies, and business models. Rather, any future action that arises as a result of this Notice should ensure that capital investment will not be deterred and that innovation continues to flourish to the benefit of the American consumer."

Baker's point-counterpoint reveals the balancing act the FCC must effectively follow: Even as the new commissioners note that the last decade has been high on innovation, with newcomers such as Apple creating data-centric products that allow HTTP streaming among other features, the Commission knows it must encourage capital investment for additional innovations. The FCC is clear, though, that consumers must benefit from continued innovation and investment, rather than having the innovation yield only more proprietary benefit for entrenched service providers.

While the Notice of Inquiry is not expected to be answered for several weeks, with collation and analysis taking several more months, AT&T Wireless, for its part, has decided to advance the spread of mobile broadband through its smartphone customer base.

Stating that its customers should be able avoid data usage surprises, AT&T notes that new customers after September 6, 2009, will be required to buy data services. In other words, AT&T is solving this problem the old-fashioned way: by making customers pay for data services, and to pay for them in advance.

"Smartphone users tend to consume a higher amount of data services, like advanced e-mail, mobile web, applications, and more," stated an AT&T press release on the topic. "Being able to take full advantage of these features without having to worry about a fluctuating or unusually high bill generally leads to greater customer satisfaction, so effective September 6, smartphone customers will need to subscribe to a data plan, as the vast majority of customers already do."

While this does not affect iPhone users, who already must buy the $30 data plan, it will affect any other existing smartphone customer who chooses to modify or renew their AT&T Wireless service after September 6.

The FCC also noted three reasons why it chooses to focus on wireless innovation now. First, a concern about economic growth and recovery, as an FCC PowerPoint presentation notes that "innovation in wireless can substantially contribute toward economic recovery and growth."

Second, the FCC sees its role in policy decision as one that can have significant impact on wireless deployment, in addition to investment and innovation. The FCC, on this point, may have been thinking about the impending 4G rollouts to replace current 3G, EDGE, GPRS, and 1RXTT data services; these fourth-generation data services, including WiMAX and Long Term Evolution (LTE), have been deploying at a slower pace than the growth of smartphones capable of consuming current most of the bandwidth on current data networks.

Finally, the FCC sees the change in Presidential and Congressional leadership, coupled with its own move away from the former FCC Chairman's policy direction, as a "time to step back and analyze" what policies and innovations could be fostered for solving "real-world problems, with focus on four key sectors: Health care, Energy, Education and Public Safety."

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