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CTIA Statement on the FCC Consumer Protection Proposals

In response to the FCC releasing its consumer protection proposals, I issued the following statement:

“Collectively through CTIA as well as individually, wireless companies have sought to empower customers, through education and the development of tools to block fraudulent and unwanted communications. There are a variety of apps and features available to consumers today, many for free, to help stop robocalls and other annoying or fraudulent activity. While we are still reviewing the details of the Chairman’s proposals, we remain committed to working with all interested parties to help protect consumers while preserving choice and promoting innovation throughout the wireless ecosystem.”

To see a list of apps to block unwanted calls and texts, please visit: http://ctia.it/1LK6gmf

CTIA Statement on the Renomination of FCC Commissioner Jessica Rosenworcel

In response to FCC Commissioner Jessica Rosenworcel being renominated, I issued the following statement:

“CTIA and its member companies congratulate Commissioner Rosenworcel on her renomination to the FCC. She has been a tireless advocate to make more spectrum available to meet Americans’ mobile connected lives. We look forward to continuing to work with her to keep meeting the demands by Americans for anywhere, anytime Internet access.”

 

Looking Backward To a Permission-Free Innovation Zone

For years, the mobile wireless ecosystem has been characterized by new, creative offers that benefit consumers in the form of tangible and intangible economic and social welfare benefits. Unfortunately, since the adoption of the FCC’s Open Internet Order, we are already starting to see permission-less innovation occurring in industry sectors that the Open Internet Order does not reach. The real risk that innovation shifts away from the U.S. wireless industry highlights the need for a regulatory framework that reflects the competition and innovation that benefits consumer across the wireless ecosystem.

* * *

It probably comes as no surprise that the mobile wireless industry is an essential contributor to the U.S. economy. As we reported last week, licensed spectrum for commercial wireless networks generates more than $400 billion in annual economic activity nationwide, with data showing $172 billion in direct spending on U.S. wireless services and an additional $228 billion in indirect and induced impacts. The wireless industry also fostered job growth and sparked entirely new industries: for every one person employed in the wireless industry, an additional 6.5 people get jobs.

Putting aside these significant tangible effects, the innovative products and services generated by the wireless industry also offer incalculable intangible benefits for American consumers. Not only have they given consumers more chances to pick and choose among offerings that suit their particular needs, but they have forever changed the way we communicate with one another and live our lives.

Movement of innovation away from the U.S. wireless market threatens these contributions. In the last few weeks, we have seen some interesting innovations in how companies offer more choices for broadband consumers.

  • JetBlue Sponsored Data. For example, Amazon and JetBlue recently announced a deal where Amazon Prime subscribers can stream movies, TV shows and music for free on the Wi-Fi service that JetBlue offers to its passengers. Previously, passengers had to pay a $9 hourly surcharge for such streaming. This is great news for Amazon Prime subscribers flying on JetBlue.  But one has to wonder why such innovative offerings are being deployed first 30 thousand feet above the U.S. rather than to U.S. consumers generally. While the FCC called into question sponsored data offerings like this if offered by mobile broadband providers, the FCC carved out airlines, coffee shops and other businesses from its Net Neutrality rules. It is a fair question to ask if JetBlue would be comfortable launching this new pro-consumer feature if the vaguely articulate general conduct standard applied in the sky.
  • Facebook Overseas. In terms of broadband adoption generally, Mark Zuckerberg recently extolled the virtues of sponsored data as a way to subsidize the cost of broadband for people who can’t otherwise afford it. His comments came in connection with a discussion about the Internet.org partnership between Facebook and seven mobile phone companies, which provides dozens of different websites for free in order to increase affordable access to Internet services. These laudable efforts are limited to areas outside the U.S. For the millions of Americans still not online, there is no similar option. Americans are left out of the benefits of this initiative, perhaps in part because these new Facebook services, which expand broadband access to those most in need, could be challenged under the new Net Neutrality rules. Netflix similarly explored business plans in Australia and elsewhere that would sponsor user’s data, increase usage and provide a better offering to consumers. Those same practices could be subject to challenge under the FCC’s overbroad rules.
  • Faster, Better News. Speaking of Facebook, nine well-known names in media, including The New York Times, announced a deal last week permitting the social media platform to directly host articles from the participating news organizations reportedly in exchange for a portion of advertising revenue. The New York Times explains that “Facebook clearly plays an important role as a gatekeeper to news.” Facebook says the articles will load up to ten times faster than they normally would on a mobile device. This is a good thing for consumers on the go and those news organizations. But imagine the reaction if fixed or mobile broadband providers announced this type of agreement to increase the speed of certain content but not others. Opponents would clamor that such conduct that provides consumers what they want more quickly violates at least the Internet conduct standard, if not the bright-line rules.

Unfortunately, by virtue of the FCC’s Open Internet Order, these innovations are limited to contexts outside the scope of the newly adopted bright-line rules and vaguely articulated general conduct standard.

Rather than promote innovation, the Open Internet Order creates an innovation-chilling, ask-for-permission zone for fixed and mobile broadband providers. By failing to draw lines around how it will exercise its newly created, undefined authority, the FCC has interjected tremendous uncertainty into the market. And without the necessary guidance on how to develop products and services that are consistent with the new regulatory mandates, broadband providers are left deterred from pursuing innovations that consumers demand. This outcome is not only bad business for innovators, but it’s keeping Americans from realizing the benefits of newly created, consumer-friendly products and services. This is all the more reason why the federal courts should issue a stay of the FCC’s new rules pending the outcome of a review of the overly broad, innovation-stifling mandates.

In the meantime, I look forward to a world where communications innovators no longer have to ask permission before launching innovative offerings or, worse, decline to adopt consumer-friendly policies for fear of running afoul of the FCC’s amorphous rules. More aptly, I look back to that world, which already existed before the government stepped in to “help.”

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