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  • The FCC's First Target: Wireless Phones

    Don’t look now, but the FCC is back in business. For some nine months the Federal Communications Commission had been operating with no permanent chairman, and with 3 of its 5 commissioner seats vacant. Now, with the confirmation of new chairman Julius Genachowski, and new commissioners Mignon Clyburn and Meredith Attwell Baker, the agency is locked, loaded, and ready to go.

    It’s first target? Not broadcasters, despite talk of a revived Fairness Doctrine, or Internet providers, despite talk of “net neutrality” regulation. Their turn may come soon, but first up will be the wireless industry. Specifically, in a meeting next week, the agency will launch investigations of wireless competition and billing practices, with an eye toward imposing new regulations on the sector.

    The assault on wireless isn’t unexpected. Chairman Genachowski weeks ago started an investigation of exclusive marketing arrangements for the Apple’s iPhone, and Congress has been looking at rates for text-messaging. More broadly, there’s been talk of limits on spectrum auctions and imposition of wireless “net neutrality” regulation. In short, the industry has become a favorite political whipping boy.

    And that is strange. The wireless industry is one of the most innovative and competitive on the globe. From bricks with antennas providing crackling voice connections to a select few 15 years ago, wireless devices now are small, ubiquitous, and do everything but wash your laundry. Competition is rampant –according the a report earlier this year by the FCC itself, 95 percent of Americans can choose from three or more competitors — 60 percent from four or more. Prices are dropping — from 10c per minute in 2003 to 6c in 2007, while the services offered are improving and multiplying. As a result, Americans are flocking to wireless — with 263 million subscribers in 2007 (up from 161 four years earlier), and using it more, with minutes of use increasing some 50 percent in four years. The US now leads the world in mobile usage, while costs are lower than in Europe or Japan.

    With this kind of story to tell, why are the mobile operators political targets? In a sense, they are victims of their own sucess. While consumers a decade ago were awed by the new gizmos in their hands, some today have come to expect everything from wireless, and are frustrated with any limits (see, “iPhone to Slavery in 13 Days.”)

    Policymakers are naturally tempted to play on these frustrations to gain political points. Ultimately, however, this will be a losing game. Despite the grumbling, Americans still don’t lump their wireless service together with the telephone and cable monopolies of old. There is no “Ma Spectrum,” and consumers know it. And when new federal rules put the brakes on innovation, the new villains may become regulators themselves.

    Posted in Economics [slideshow_deploy]

    8 Responses to The FCC's First Target: Wireless Phones

    1. matthew, queens ny says:

      Figures I just got my mobile device in june. using it right now. I love it and will probably look to upgrade as I continue to learn how to use all its functions. Now here comes the government to help. Great lets see how the mess this up!

    2. Bobbie Jay says:

      this is abuse of power!!!!!!!!!! the president speaks loud and clear of all he inherited yet he's got plenty of time and OUR MONEY to interfere where he does not belong… this is a country for the people… the people want obama impeached and the rest of his accomplices imprisoned.

    3. Pingback: Don’t Look Now, But The FCC is After Your Wireless Connection « Chicagobluesgirl’s Blog

    4. Roger S., Ma. says:

      As you wrote: "when new federal rules put the brakes on innovation, the new villains may become [the] regulators themselves." Hope that's a prediction to come true soon. Actually, we need something to regulate the regulators. How about another "Czar"? — Simply put, there's really nothing for them to regulate. Nobody who doesn't want to needs to sign a contract with AT&T, or any other provider, nor buy an iPhone. — That's freedom. I'm beginning to think a lot of Americans don't like freedom, and would prefer the government "monkey on their backs". How about making a deal with "Czar Putin" from Russia? Bet he too uses an iPhone! "Free" health-care, too.

    5. Pingback: » Financial News Update - 08/25/09 NoisyRoom.net: Where liberty dwells, there is my country…

    6. Pingback: Latte Links (8/26) | Caffeinated Thoughts

    7. Catherine, MI says:

      Let's get government officials emails like we did in Detroit. Just a thought, maybe FCC has a need to control cell phone emails because the big guys in D.C. use them and they do not want to see another Kilpatrick on their hands? We need to keep D.C. so busy defending themselves they will not have time to do anymore damage. Don't forget Cheeks, Kilpatrick's momma is in D.C., does the name Connors sound familar? Yep, his wife is going to Fed Pen, she was on the Detroit Council. Just a thought. I know if I was in government doing unethical not to mention illegal things and using my government issued black berry to email I might have concerns as to what happened in Detroit. I might be way off base but then again who knows anymore?

    8. Linda Wylie TX says:

      I am with Bobby Jay Impeach that fool and send the tax evaders to prison like the crooks they are.

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