Wednesday, January 13, 2010

CTIA: No Need for Net Neutrality in Wireless Broadband

Net neutrality rules are "inappropriate for wireless broadband networks and unnecessary to ensure that wireless consumers continue to enjoy the open Internet," according to comments filed with the FCC by CTIA, which represents the U.S. wireless industry. CTIA argues that all elements of the wireless ecosystem are flourishing in the U.S., and consumers are rapidly adopting broadband wireless services. "This is a model that is working for consumers and regulation is not needed."

The filing highlights five reasons why net neutrality is unnecessary for wireless:

  • Net neutrality rules would lead to unintended consequences. A lot is going right in the U.S. wireless market -- low prices, competition, and tremendous innovation -- all driven by tens of billions of dollars each year in investment. All elements of the wireless ecosystem are flourishing to the benefit of consumers. Adding regulatory uncertainty and the unintended consequences that will flow from these proposed rules will cause harm and ultimately will not benefit consumers.

  • There is no factual basis for application of net neutrality to wireless. The Commission cannot point to a market failure that would justify its proposed rules. Only theoretical harms that have been claimed for years -- harms that have never materialized.

  • The FCC's approach would be in stark contrast to international approaches to Internet openness. In the more concentrated and more heavily regulated European markets, regulators have decided to forgo the type of prescriptive regulation proposed by the FCC in favor of promoting competition to ensure consumer welfare.

  • Wireless networks are technologically different than other broadband technologies. Reliance on spectrum and the technical aspects of mobility pose unique challenges to wireless broadband providers. Capacity constraints (one strand of fiber optic cable has more capacity than the entire electromagnetic spectrum, of which wireless is one of many users), the close interaction between wireless devices and the wireless network, and licensed nature of wireless devices make the Commission's rules incompatible with wireless broadband.

  • The FCC should take a page from antitrust analysis -- monitoring the market and correcting failures -- rather than regulating non-existent harms. A recent paper by the U.S. Department of Justice concluded that the broad goals of bringing consumers the best possible service and choice of broadband providers are best served by promoting competition. Several years of economic analysis of net neutrality reach the same conclusion -- careful monitoring of the market and correction of actual failures will better promote competition and consumer welfare than net neutrality rules.
  • In October 2009, the FCC voted unanimously to adopt a draft set of rules to codify and supplement existing Internet openness principles while seeking public input on permanent regulations. Under the draft rules, a provider of broadband Internet access service may not:

    1) prevent any of its users from sending or receiving the lawful content of the user's choice over the Internet;

    2) prevent any of its users from running the lawful applications or using the lawful services of the user's choice;

    3) prevent any of its users from connecting to and using on its network the user's choice of lawful devices that do not harm the network; or

    4) deprive any of its users of the user's entitlement to competition among network providers, application providers, service providers, and content providers.

    5) subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory manner.

    6) subject to reasonable network management, a provider of broadband Internet access service must disclose such information concerning network management and other practices as is reasonably required for users and content, application, and service providers to enjoy the protections specified in this rulemaking.

    These six principles would apply to all platforms for broadband Internet access, including mobile wireless broadband, while recognizing that different access platforms involve significantly different technologies, market structures, patterns of consumer usage, and regulatory history.