Tuesday, October 30, 2007
Rob Frieden, College of Communications, Dickinson School of Law, Pennsylvania State University, has published "The Costs and Benefits of Separating Wireless Telephone Service From Handset Sales and Imposing Network Neutrality Obligations." Here is the abstract.
Wireless operators in the United States qualify for streamlined regulation when providing telecommunications services and even less government oversight when providing information services, entertainment and electronic publishing. Congressional legislation, real or perceived competition and regulator discomfort with ventures that provide both regulated and largely unregulated services contribute to the view that the Federal Communications Commission (“FCC”) has no significant regulatory mandate to safeguard the public interest. Such a hands off approach made sense when cellular radiotelephone carriers primarily offered voice and text messaging services in a marketplace with six or more facilities-based competitors in most metropolitan areas.
However the wireless industry has become significantly more concentrated even as wireless networking increasingly serves as a key medium for accessing a broad array of information, communications and entertainment (“ICE”) services. As wireless ventures plan and install next generation networks (“NGNs”), these carriers expect to offer a diverse array of ICE services, including Internet access, free from common carrier regulatory responsibilities that nominally still apply to telecommunications services. Wireless carrier managers reject the need for governments to ensure consumers safeguards such as nondiscriminatory access and separating the sale of radiotelephone handsets from carrier services.
This paper will examine the costs and benefits of government-imposed wireless network neutrality rules with an eye toward examining the lawfulness and need for such safeguards. Because wireless carriers package subsidized handset sales often with a blend of ICE services and consumers welcome the opportunity to use and replace increasingly sophisticated handsets, the FCC has refrained from ordering handset unbundling. But for other services, such as cable television, the Commission has pursued public safeguards that attempt to allow consumers the opportunity to access only desired content using least cost equipment options.
The paper concludes that the rising importance of wireless networking for most ICE services and growing consumer disenchantment with carrier-imposed restrictions on handset versatility and wireless network access will trigger closer regulatory scrutiny of the public interest benefits accruing from wireless network neutrality.
Download the entire paper from SSRN here.