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FCC starts inquiry into cellphone competition

updated 02:35 pm EDT, Thu August 27, 2009

FCC Cellphone Inquiry

The FCC on Thursday morning began a formal inquiry into the state of the cellular industry. In line with the US government agency's timetable for events, the investigation is part of a new annual look at whether carrier practices may be hurting subscribers as well as its contribution to the economy and to the spread of long-range wireless Internet access. Officials began the inquiry following a unanimous vote.

The investigation is split into two areas and will focus both on issues of competition and innovation as well as on the accuracy and fairness of the fees that are often applied to cellphone bills.

Among the topics are likely to be exclusivity deals like AT&T's deal for the iPhone, the Palm Pre at Sprint or T-Mobile's G1. Critics have attacked these deals for providing less incentive to lower phone or service rates. Smaller, usually extra-urban carriers have also complained that they're unable to get desirable phones as a result of these agreements, even when the exclusive operator doesn't operate in a given area.

Questions are also likely to surface regarding the frequent resistance to letting customers buy phones off-contract. This is relatively simple with carriers like AT&T and T-Mobile, where it's possible to buy unlocked phones and simply use a SIM card. With CDMA carriers, however, the need to activate the phone in-store has usually let carriers like Sprint and Verizon discourage or exclude outside phones.

The CTIA claimed to be appreciative of the inquiries but responded defensively, claiming that the US cellular industry is the "least concentrated" on Earth and that it had the lowest-priced voice service and the largest sheer number of customers that can access 3G networks. It nonetheless didn't respond to concerns about exclusivity, high rates for data and messaging or concerns of restrictions regarding apps like VoIP or media streaming.

Thursday's investigation debut is separate from but parallel to an investigation over the reasons behind Apple so far excluding Google Voice from the App Store. The iPhone maker has denied AT&T's involvement and has instead disputed Google Voice for its similarity to the iPhone software, which may raise other anti-competitive concerns but wouldn't be within the FCC's scope.

No particular schedule exists for the inquiry to complete, and any actions taken may come after technology accomplishes many of its objectives. A broad move by carriers to the Long Term Evolution (LTE) standard for 4G may let most or all US carriers have access to the same devices, more freely port phones between networks, and reduce the costs of both data and voice by putting them all on an Internet-centric backbone.

by MacNN Staff



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