A recent  New York  Times op-ed compared U.S. broadband providers to OPEC.  OPEC?!   Seriously? Tim Wu's oil cartel comparison is absurd, and is clearly based on narrow-mindedness rather than facts.

Let's just deal with the basics. OPEC, like all cartels, relies on producers agreeing to restrict output to artificially inflate prices. In contrast, U.S. broadband service providers are aggressively investing and building new capacity as prices drop and broadband speeds increase.  And how has that shown? The cost of bandwidth in the US is about 1/5th the price of what it was ten years ago, while the cost of oil is about 12 times as much as it was in 1998. So, scratch Wu's argument that consumers are getting gouged at the 'bandwidth' pump.  

Wireless carriers have paid billions to the US Treasury to buy spectrum, and billions more building better and faster networks to serve America's 260 million U.S. wireless subscribers.  In fact, according to an upcoming paper by Jeffrey Eisenach, Criterion Economics and George Mason University Law School, for the Committee for Economic Development of Australia, "in 2007, the U.S. Federal government invested a total of about $57 billion in all U.S. transportation infrastructure, including roads, bridges, ports, airline infrastructure and railroads; the Wall Street Journal reports U.S. telecom firms invested $70 billion in the telecom infrastructure alone." Private investment in communications in the US is impressive by any standard. Further, one-third of America's broadband customers use competing wireless providers to access the Internet. Mr. Wu conveniently ignores such consumer choice.

A national broadband policy is essential to our country's future, but it must be grounded in reality. It's ironic that Mr. Wu claims to oppose a command and control solution (to a non-existent problem), while supporting government-enforced mandates.  The wireless industry welcomes dialogue on how communications can be provided to all Americans, but such discussion will only be constructive and productive if everyone involved has both feet firmly on the ground, and just as sure of a grip on the facts.  

Last week, the National Conference of State Legislatures (NCSL) and the National Association of Regulatory Utility Commissioners (NARUC) officially embraced a national framework for wireless.  There are some differences and undoubtedly some challenges still ahead, but we see this as a great start toward putting consumers in an even better position than they are today with the wireless services they love to use.

The NCSL 21st Century Communications Policy Statement calls for a national regulatory framework for wireless with enforcement done by the state Attorneys General. The NARUC Resolution Concerning the Communications Policy Statement supports a national framework for wireless carriers. However, some might interpret it as allowing states to go beyond an established framework. The NARUC Policy Statement also recommends a joint conference to develop a framework that the wireless industry and a consumer advocate, and for that framework to be adopted on the federal level. 

CTIA fully supports a national framework with effective state enforcement, and we think it's encouraging that both organizations recognize the need for regulatory consistency and uniformity. One set of rules, across the board that everyone has to 'play' by, makes sense and ultimately provides consumers with the best deal possible when it comes to wireless.

A national framework will be successful only if states don't use their authority to create additional rules or enforcement regimes that conflict or contradict nationally unified rules and practices. The multi-state approach to regulation that currently exists doesn't serve consumers', nor the industry's, best interests. 

I want to commend both NCSL and NARUC for their leadership and recognize that their support of a national framework brings consumers one step closer to consistent standards that keep the cost of wireless service low and innovation high.  

This morning’s LA Times ran a good piece on the wireless “listed property” issue, which is currently being debated in Congress.  The article clearly explains the out-dated, archaic tax code that requires employees to keep track of “personal” calls made on their “work” wireless phones.  This tax-code stems from the early 90’s when wireless was an exclusive, corner-office-executive perk.  The wireless market of 2008 is completely different from the wireless market of the early 90s.  Intense competition has driven down prices, and driven up subscribership over the last 18 years.  Today, wireless is hardly an “executive privilege” – it’s a mainstay of modern American life enjoyed by more than 260 million subscribers.  

Legislation to modernize this tax-code has been has been passed in the House and pending in the Senate.   Let your Senators and Representative know you support this legislation, and let's work together to pass the 2008 MOBILE Cell Phone Act.

We have spent a good deal of time on this Blog highlighting the unfair tax treatment wireless users receive simply for reaping the benefits of the wireless revolution. For example, a typical consumer in the United States pays 15.19% in federal, state, and local taxes on their cell phone bill, compared to 7.07% for comparable taxable goods and services.

Well, Congress has begun to take notice and two bills were introduced that would provide wireless users some much needed relief from discriminatory taxes and fees. In April, Reps. Lofgren (D-CA) and Cannon (R-UT) introduced the Cell Tax Fairness Act (H.R. 5793) and, recently, Sens. Wyden (D., Ore.) and Snowe (R., Maine) introduced the Mobile Wireless Tax Fairness Act (S. 3249).

Although neither of these bills would affect current state and local wireless taxes, each places a 5-year moratorium on any new discriminatory wireless tax or fee. This will be a welcome change for consumers already burdened with high prices for other essential goods and services, such as food, gas and health care. A March survey by the Pew Internet & American Life Project found that more and more Americans find it harder to live without a cell phone than any other form of communication. Reps. Lofgren and Cannon and Sens. Wyden and Snowe know that lowering the burdens of wireless taxes will help keep wireless affordable.

Check out MyWireless.org and find out what you can do to support H.R. 5793 or S. 3249.

Late last week, CTIA President & CEO, Steve Largent sent aletter to the FCC that discussed the wireless-related Telephone Consumer Protection Act (TCPA) complaint category. This category is associated with autodialing, live or recorded telemarketing calls and “unsolicited commercial e-mail messages to cell phones, pagers, and other wireless telecommunications devices.” 

In its letter CTIA highlighted wireless carriers’ extensive consumer protection efforts and initiatives.  The letter also emphasized carriers’ continued commitment to work with both the FCC and Congress in protecting consumers from unwanted content. 

Read the letter by clicking here!

Few of us like anyone telling us how to do our jobs, but in the case of the FCC, it is a required part of the job. The most recent round of  ‘tell us what you think’ pertains to spectrum in the 2155-2175 band, so-called AWS-3. This is the same chunk of spectrum that M2Z made a run at not too long ago, pitching the FCC on the idea that M2Z should be given the spectrum so it could offer ‘free’ advertising-based service. The FCC wisely rejected that silly notion, but now the Commission appears to be weighing another M2Z proposal to auction off that same spectrum, with the string attached that the winner must offer free service in that spectrum. It’s not literally the giveaway M2Z wanted in the first go-round, but it still amounts to suggesting the FCC stack the rules in favor of a specific company, providing them a proverbial free lunch at American taxpayers’ expense and harming consumers and licensees that have already ponied up billions of dollars in past auctions to offer wireless services. That’s a bad idea, and no agency of the US government has any business playing that game.  
 
There are all kinds of legal grounds on which arguments can be made as to why the FCC should not custom fit the rules for M2Z’s benefit. In fact, the Commission only has to consider fundamental principles to figure out the best means of going forward. For example, what’s worked in the past, and what hasn’t?

M2Z’s business model is nothing new. It’s been rolled out several times in the past, and has been an unquestionable flop. (For a current reference, see ‘Muni-WiFi’). At the same time, the FCC’s auction process has encouraged competitive bidding on unencumbered spectrum, historically resulting in service providers adding billions of dollars to the U.S. Treasury, and fierce competition that has led to a multitude of consumer benefits. The auction process works, and M2Z’s business model doesn’t. Simple, right?
 
Another basic consideration is the spectrum that has already been made available via auctions, such as AWS-1, and what rights those licensees hold. They spent nearly $14 billion to buy that spectrum, and many more billions to build-out their networks… and did so under the existing FCC rules. Is it fair now to play the shell game with them, change the rules to the advantage of a specific business plan, as well as disregard the numerous interference issues that M2Z acknowledges, yet continues to shove under the rug? The interference that will be caused by M2Z’s “AWS-3” operations is real, as is a similar problem for PCS licensees that will arise under the proposed rules in the so-called AWS-2 “H Block”.  American consumers, not to mention the companies which have already sunk billions of dollars into their competitive businesses, deserve better.

There is universal agreement that broadband deployment can be a key social and economic driver in the U.S., and the FCC’s statistics show that Americans are significantly favoring wireless as their newest on-ramp to the Internet. But, the reach of wireless broadband is being extended in a vibrantly competitive free market, and government intervention by arbitrary rulemaking is doomed to fail.  

There’s just no good reason why the FCC should morph the rules so that a well-funded company such as M2Z can lap the field with the commission’s help. I’m not going to join the chorus and tell the FCC how to do its job. That’s what an ex parte is for. But if the commission truly believes in its historically successful auction process, and creating the best possible communications environment for American consumers, then it should stay out of the business of trying to select winners and losers, and stick to what works and is fair for everyone. 

U.S. Representative John Culberson (R-TX, 7th District) might be the king of wireless use in Congress. Earlier this week I talked with him about how he's using wireless to communicate with the folks back home in West Houston, why he thinks opening the doors of the hallowed halls in such a way is so important, and a movement by some in the House to put the brakes on what he's doing.

There are a lot of people out there who say the US is way behind the rest of the developed world in a number of technological measurements … that we’re #16 in this, or #23 in that… but guess what?

THE U.S. IS A WORLD LEADER IN WIRELESS INTERNET USE!!!

At least that’s what Nielsen Mobile says in a report just released. Nielson says that we’re at about 16% penetration, or that about 40 million wireless subscribers used the mobile internet at least once a month. The report also discusses adoption rates and use of the mobile internet in different countries, emerging business opportunities, consumers’ costs, different devices, and a whole slew of related subjects. But here are some of the numbers of interest:

- According to Nielson’s research, there were more than 140 million wireless data users as of 1Q08.
- 95 million users paid to access the mobile internet, either as part of  a subscription or on a per use basis as of 1Q08
- More users are using greater amounts of wireless data.  The percentage of users with “all you can eat” data plans grew by 40% between 1Q07 and 1Q08

Of the 16 countries Nielsen routinely tracks, the report’s benchmarking of other countries’ use shows the U.S. as a world leader in mobile internet use. For example, the UK is at 12.9% penetration, Italy-11.9%, France-9.6%, Germany-7.4%, and China- 6.8%--- all well behind the nearly 16% penetration cited in the U.S.  So often – too often – we hear the US is a laggard in the global broadband/internet use debate.  I don’t expect the ‘glass half empties’ to go away or stop their hand wringing, but the independent study should reassure us that the US mobile sky is not falling, and is indeed rising. 

Nielson’s look at a growing mobile internet is consistent with other findings.  From June 2006 to June 2007, about 70% of all new broadband lines in the US were wireless subscriptions.  In fact, according to the FCC’s most recent data, wireless has a 35% share of total broadband lines.

It’s clear that the mobile internet is growing, especially here in the United States. And as the larger mobile ecosystem evolves, the importance of, and reliance on the mobile internet will only increase.  What we are seeing now is only the beginning of the next phase of communications, and it’s apparent that Americans like what wireless technology is delivering.