Largent: Don’t Meddle With Wireless Industry’s Success

Posted June 13, 2010 at 12:55am

As the discourse on telecommunications policy in the U.S. continues, we support the Federal Communications Commission’s oft-stated position that its decisions will be based on facts, not hypothetical concerns or anecdotes that don’t capture the reality of the marketplace.

[IMGCAP(1)]Contrary to what was argued in a June 1 Guest Observer, “Congress Can Protect High-Tech Innovators,” the facts present an inarguable success story of a wireless ecosystem that is providing consumers with countless wireless technological innovations and is playing an increasingly vital role in our nation’s economy.

Compare the U.S. wireless consumer’s experience with the rest of the world. U.S. wireless subscribers use their devices on average more than 824 minutes per month, the most of any developed country. U.S. consumers also enjoy the lowest effective cost per minute among the developed countries with which we compete. High use. Low cost. That’s a good start. On top of that, a recently released FCC survey shows 92 percent of American consumers are very satisfied or satisfied with their wireless service. Other third-party surveys report similar levels of satisfaction.

Mobile broadband continues to increasingly provide enormous benefits. It is a great equalizer and enables people of varied demographics and geographic areas to access information and enrich their lives and jobs. It is essential to meeting critical policy objectives, such as implementing smart transportation, reducing medical costs and improving the efficiency of our electrical grid. But as we migrate to faster speed, more bandwidth-intensive applications and data-capable devices, the U.S. wireless industry needs more spectrum so we can stay ahead and play an integral role in bridging the digital divide. That’s why we support the FCC’s proposal in the National Broadband Plan to make 500 megahertz of spectrum available over the next 10 years.

In addition to new uses, we’re seeing demand on the rise. Cisco forecasts that global use of wireless data will increase by a factor of about 40 between 2009 and 2014. According to analyst Peter Rysavy, the confluence of new applications and consumer demand will “have multiple adverse consequences” within three to five years if new spectrum isn’t allocated in the U.S., including poorer and less reliable network performance, changed service plans and stalled innovation in the wireless arena.

The U.S. wireless industry is doing its part by investing in its networks. American carriers have collectively invested on average more than $24 billion a year in wireless capital expenditures since 2004 (more than the five biggest countries in the European Union combined). It directly employs about 2.4 million people, and its economic contribution is growing faster (16 percent) than the rest of the economy (3 percent).

Many of the most innovative devices in the world are launched in the United States, and we lead the world in smart phone sales. The first application store opened in July 2008. Because of the collaborative innovation present in the wireless ecosystem, there are now more than 240,000 applications available from at least seven apps stores and the number continues to grow. New operating systems and the explosive growth of machine-to-machine communication are also creating incredible new opportunities for us to connect and be more productive and efficient than ever before.

The United States also features the most competitive wireless industry on the planet. According to the FCC, almost 96 percent of Americans may choose from at least three service providers, and about 91 percent have the option of selecting from four or more.

All of this information has been well-documented in numerous FCC filings. Despite these impressive facts, the agency continues down a puzzling road of potential regulation. It’s considering reclassifying Internet and mobile broadband service as a phone service under Title II of the Communications Act, despite almost 300 bipartisan Senators and Representatives stating their opposition.

There is also an FCC proceeding in the area of “net neutrality.” I am baffled that wireless is even a part of this discussion. There are no examples of a wireless provider’s conduct justifying the proposed rules. Wireless networks are inherently different than any other and, by virtue of the laws of physics, require unique management. The uncertainty created by such rules would undoubtedly impede the development of advanced wireless services and networks. Net neutrality is unnecessary, and the FCC should be focused on moving forward and encouraging a sustainable economic recovery. While there is still work to be done to make mobile broadband available to every consumer in the country, let’s not lose sight of the enormous benefits being provided to U.S. wireless consumers today, and those in the future inspired by sound, reasonable and justified public policy.

Steve Largent is the president and CEO of CTIA, the association of the wireless industry. He is also a former Republican Congressman from Oklahoma.