FCC To Put Wireless Corps On The Hot Seat

Today the Federal Communications Commission announced its decision to investigate the wireless industry. Under the gun will be the power held by the larger providers, truth-in-billing issues, and whether or not consumers have as much choice as they should.Andrew Jay Schwartzman, president of Media Access Project, calls this new investigation "long overdue." My guess is the wireless providers disagree.

The FCC has notified the major wireless players -- including AT&T, Sprint, T-Mobile, and Verizon WIreless -- that it is going to be undertaking two different inquiries. The first is going to be how the FCC itself can help increase competition in the industry and how network technology, device selection, application access and business practices affect the industry as a whole. A separate inquiry will examine whether or not the industry allows for new entrants.

Several things have led to this investigation. One of the most visible culprits is handset exclusivity. Device makers such as Apple make deals with providers such as AT&T to be the sole distributors of a particular device. In the U.S., Sprint is the sole distributor of the Palm Pre, T-Mobile is the sole distributor of the myTouch 3G, and Verizon Wireless is the sole distributor of the BlackBerry Storm. Some feel that deals like these stifle competition and limit consumer choice.

The CTIA disagrees. Wireless Association President and CEO Steve Largent said in a statement, "The wireless ecosystem - from carriers, to handset manufacturers, to network providers, to operating system providers, to application developers - is evolving before our eyes and this is not the same market that it was even three years ago. In this industry, innovation is everywhere."

The carriers themselves have voiced their opinions, too, taking time to note that most Americans can choose from at least four different service providers in any given region. Each service provider offers a dozen or more handset models to choose from.

The FCC opened up the floor for comments for the next 30 days. I am sure there will be plenty, with formal responses coming from AT&T, Sprint, T-Mobile, and Verizon WIreless shortly.

What will the end result of this inquiry be? Too early to tell. Any light that can be shed on the processes of the wireless providers is probably a good thing, though, and may lead to better services in the future.

To be continued...