Wired’s Ryan Singel interviewed Chris Guttman-McCabe, a vice president for The Wireless Association in a 3 part feature, What the Wireless Industry Will Tell the Feds.
The FCC decided last Thursday to investigate competition in the nation’s cellphone market. Federal regulators want to know if the wireless industry if inhibiting innovation and cheaper service.
FCC Chairman Julius Genachowski said last week (pdf) he favored policies that promote “investment, competition and consumers.” He also noted that the industry is at a “pivotal moment” as consumers seek to do more with their mobile devices and cellphones.
It plans to ask industry players and the public to comment on the issues and summarize its findings in a report that could lead to new regulations.
- In part one of the CTIA interview, Guttman laid out his case that the U.S. actually leads, rather than lags, the world when it comes to mobile-phone pricing, networks and smartphones.
- In part two, Guttman explained why the industry thinks that net-neutrality rules shouldn’t apply to mobile networks and how Apple’s iPhone can’t take too much credit for wireless innovation.
- In part three, Guttman explained how text messaging isn’t that expensive (!) and how the U.S. will fall behind the rest of the world unless the government sets aside more of the airwaves for wireless.
Wired.com: Why are text messages so expensive across carriers?Guttman-McCabe: If you look at the total number of of text messages sent, almost 99 percent are sent under a text messaging plan. And each of the four largest carriers has a $5 plan, and they start at 250 texts a month and go up to 400 a month. If 99 percent are flowing through $5-or-more plans, then that seems to be pretty reasonable from a public-policy perspective.
Wired.com: It feels to people that there’s not enough competition, because text messages cost the carriers nothing. There’s virtually no bandwidth involved. So it seems odd there doesn’t seem to be competition for text messages, given how popular they are.
Guttman-McCabe: Well look at the $5 plans from the carriers. One has 250, one has 350, and one has 400. So you have a choice, and some carriers market their text devices more than others do.
Wired.com: One of the things the [association] told the FCC in regards to the new broadband plan, you said it was still necessary for carriers to retain certification over devices to ensure quality of service. What is that differs between the U.S. and countries where people bring their devices to the networks? Is there really a difference in the networks?
Guttman-McCabe: We have two technologies, where almost every other country has one. So that means you can’t bring GSM devices to a CDMA network. Two, most of those countries have three carriers — those carriers all have exact same band of spectrum and they are nationwide. So for instance, in the U.K. when you buy a license, you aren’t buying a Gloucester license.
Wired.com: Is there anything important we haven’t talked about?
Guttman-McCabe: When you look at the U.K. and Japan and Korea, they have similar amounts of spectrum for a fraction of the number of customers who use a fraction of the number of minutes.
The U.K. has 355 MHz in the pipeline, and Germany has 340, and Japan has 360. We put 50 on the chart, but we arguably have none. That is a cause for concern. When we look at adoption numbers and data use and the new smartphones and the move to 3.5 and 4G, we think there needs to be a focus by federal government on identifying and moving spectrum into the pipeline.
The CTIA, which represents more than 200 wireless companies, says the average U.S. consumer pays 5 cents per minute for voice service — a rate cheaper than other advanced telecom markets, such as the U.K., Germany, South Korea and Japan, according the the organization (pdf).
The FCC will look for ways it can stimulate innovation and competition, said FCC Chairman Julius Genachowski (pdf). The agency will take a three-pronged approach in its investigation:
- Innovation and investment in the wireless market (pdf)
- “Competitive conditions” (pdf)
- Consumer billing practices (pdf)
Public Knowledge, a Washington, D.C.-based public interest group said, “The Commission took exactly the right path today when it voted to look at all aspects of competition in the wireless industry. For too long, the appearance of competition among a few carriers has masked underlying anti-competitive industry practices ranging from consumer contracts to roaming agreements.”
