WIRELESS GROWTH SAID TO CREATE CROSSROADS FOR REGULATORS
Now that wireless is becoming alternative communications technology, rather than accessory, policymakers and industry must grapple with issues such as service quality and regulatory parity, panelists said at Precursor Group conference in Washington Wed. Brian Fontes, vp-federal regulations for Cingular Wireless, said one emerging theme at FCC was emphasis on flexibility, which historically had served wireless industry well. “The concept of flexibility is increasingly useful and important,” he said: “The problem is how do you define flexibility.” Several panelists described industry as being at crossroads between regulations designed for less competitive wireline environment and industry that has grown so big that regulatory oversight still is needed. “We have to be mindful to not over- regulate,” NTIA Deputy Asst. Secy. Michael Gallagher said. “There is a tendency when an appliance has reached that level of importance in society to then say well, there needs to be a firmer hand.”
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Consumers’ increased reliance on wireless service also has driven up expectations on service quality, FCC Wireless Bureau Chief Thomas Sugrue said. “Frankly, given the great increase in the demand in the minutes, I don’t know that the industry’s been able to keep up with those rising expectations and the rising demand on their services.” He cited significant press attention that wireless service quality has been receiving and said Bureau receives feedback from state regulators when consumers raised concerns. “We at the Wireless Bureau don’t want to get into the business of regulating service quality,” Sugrue said. “I don’t think there’s any intent to do that. If we're going to avoid having a sort of drumbeat build-up in the press and political environment we are going to have to sort of make the situation a little better.”
Sugrue said he agreed competitive growth of wireless was one mark of success of public policy. “To the extent that this service becomes a substitute for wireline service and to the extent that there are certain expectations in the public and in the people that they elect about what that means, one of the best ways to address it is to make sure that service quality is there.” Ensuring that capabilities such as Enhanced 911 and number pooling are in place in industry, Sugrue said, “then we can sort of forestall… greater incursions” in regulatory arena.
Responding to service quality issue, CTIA Pres. Tom Wheeler said dramatic industry growth was relatively recent and it wasn’t until 1998 that PCS reached 10% of subscriber base. On wireline side, similar levels of penetration took decades to build, Wheeler said: “Yes, we have a challenge, but let’s put it all in perspective.” He said competition, not regulation, had driven growth of wireless industry. He also made pitch for forbearance on wireless local number portability, issue that has been raised at FCC by large wireless carriers concerned that pooling and portability deadlines both were set for Nov. 24. Verizon Wireless has petitioned Commission for forbearance on local number portability, proposal that state regulators have opposed. Industry has “finite pot” of resources for network build-out and regulatory compliance, Wheeler said. “It does not help when there are proposals -- well intentioned as they may be - - that come out of the government, such as local number portability, that were designed for a monopoly environment that is imposed on a competitive environment.” In first year, wireless LNP will cost industry $1 billion, he said. “Resources need to be put into continuing improvement of service and coverage. Instead, folks are saying ‘I know better’ and it should be spent so somebody doesn’t have to change their business cards,” he said.
Precursor Group analyst Rudy Baca said that in Europe, possibility of reregulation was looming as wireless grew in prominence, including issues such as universal service contribution and forced network sharing. For wireless industry, issue of regulatory parity with wireline carriers remains challenge, several panelists said. Fontes said that “for so long, regulators both at the federal and state level dealt with regulations in a monopoly, wireline environment. Now they are having to deal with a competitive industry. For so long we have heard that competition will get rid of regulation.” But while wireless industry is competitive, there still is great deal of interest by state regulators in issues such as numbering, he said. States in some cases are taking their own initiatives inconsistent with their delegated authority in making numbering resources “almost an impossibility” for wireless carriers to obtain, Fontes said. That puts regulators at crossroads between regulations designed for wireline competitors and policies tailored for new competitors such as wireless carriers, he said.
NTIA’s Gallagher reiterated remarks of Commerce Secy. Donald Evans in lunchtime speech, saying NTIA was on schedule for 3G proceeding. “We think we're making some progress,” he said. On upcoming proceedings in Wireless Bureau, Sugrue said agency still was working on secondary markets proceeding, which entails liberalizing rules for leasing and other licensing restrictions that don’t always make it easy to lease spectrum. He said: “Spectrum flexibility is a theme we are looking at and it will be an important theme this year.”