Wireless Winter at the Federal Communications Commission

By TAP Staff Blogger

Posted on January 20, 2011


Since the explosive growth of wireless services and technologies began with cellular telephone service in the 1970s, the Federal Communications Commission (FCC) has been busy with wireless regulatory matters, from auctions to the “white space.” As the agency welcomes 2011, several developments are expected to affect wireless in the near future, from Internet access to broadcasting.

One key issue is how the new rules described in the FCC’s “Open Internet” announcement of December 21, 2010, which outlined network neutrality rules, will affect wireless services. Net neutrality rules are intended to regulate how broadband carriers, wire-line or wireless, manage Internet traffic. The new rules require broadband providers to disclose information about network management, and restrict discrimination or blocking access to legal content and applications. The FCC suggests that “pay for priority” service will not generally be legal under the final rules. Some observers argue that wireless broadband carriers should have leeway to manage congestion differently from wire-line carriers. The FCC’s announcement suggests that mobile broadband services like WiMax, which are designed to be set up in any location, may be partly exempt from the rules, for the present. The exemption apparently does not encompass fixed wireless broadband, a type of wireless internet access that uses radio towers at fixed sites. The FCC’s authority to license wireless services “in the public interest” is cited among other bases for the FCC’s authority to issue the order. Commissioner Baker’s dissent from the FCC’s order notes that 4G wireless network standards incorporate elements likely to conflict with the rules against prioritization; Commissioner McDowell’s dissent also notes that the order may create difficulties for small fixed wireless services trying to obtain investment capital. 

TAP scholar Gregory Rosston and coauthor Michael Topper explore issues related to net neutrality and wireless in their paper “An Antitrust Analysis of the Case for Wireless Network Neutrality.” They look at the business practices of wireless carriers, noting that some practices, while sometimes controversial, may help consumers by allowing the networks to operate more efficiently. They conclude that the wireless industry is competitive, but some regulatory changes would make it more so, lessening the need for net neutrality rules. Lawrence Lessig describes how wireless networks operated by users can offer an alternative to large commercial networks in his short article, “I Blew It on Microsoft.” In a recent blog, John Palfrey describes his comments to the FCC, in which he addressed the question of whether different types of networks should be regulated alike, adhering to the principle of “technological neutrality.” He notes that some rules “may not be immediately feasible for cable modem systems and 3G wireless networks as presently architected, but the [net neutrality] plan should be enacted with the goal and presumption of accomplishing technological neutrality over time.” 

In late 2010, the FCC announced rules in its “white space” proceeding. This rulemaking allows unlicensed wireless devices to use the broadcast television spectrum where the spectrum is not being used, the “white space” between TV channels. In 2008, the FCC proposed requiring wireless devices using this “white space” include technology to check for interference with television broadcasts, but faced opposition from technology firms that considered the requirement unworkable. The final rules are more liberal, relying on a “TV Bands Database” to protect existing services from interference. The order took effect on January 5 of 2011. TAP scholar Dale Hatfield and coauthor Phil Weiser look at the future of spectrum policy in “Toward Property Rights in Spectrum: The Difficult Policy Choices Ahead.” Randal Picker compares municipal, state and federal regulation of spectrum and rights of way used by different wireless service providers in “Who Should Regulate Entry into IPTV and Municipal Wireless”. Tom Hazlett describes how “open” wireless laws can harm consumers in “Modular Confines of Mobile Networks: Are iPhones iPhony?

Further key FCC activities relate to the auction of the electromagnetic spectrum used by wireless services. Starting  July 19 of 2011, the FCC will be auctioning off additional licenses to use spectrum in the 700 MHz Band.  TAP scholar Jonathan Levin and coauthors Jeremy Bulow and Paul Milgrom describe strategic problems in bidding on spectrum in “Winning Play in Spectrum Auctions.”

The FCC is also expected to issue its views on the pending merger between Comcast and NBC/Universal in January of 2011, as is the Department of Justice. TAP scholar Joshua Wright, writing with coauthor Thomas Lambert, comments on merger policy in “Antitrust Overconfidence.” Michael Whinston looks at the affect of mergers on consumers in “Antitrust Policy Towards Horizontal Mergers.” Tim Wu surveys the history of media convergence in his new book The Master Switch: The Rise and Fall of Information Empires.

Other proceedings at the FCC expected to affect wireless services in 2011 include the redesign of auction bidding to promote diversity and a rulemaking concerning the universal services subsidies received by mobile services.