CTIA: FCC’s Martin opposes Carterphone rules for wireless industry

LAS VEGAS--Calling the U.S. wireless industry “the poster child for competition,” FCC Chairman Kevin Martin today promised to recommend that Skype’s petition for federal rules to require an open wireless interface for all handsets be dismissed.

The comment drew applause from the CTIA crowd gathered to hear Martin’s keynote speech. Only minutes earlier, the same group had heard words of warning about regulation from CTIA Chairman Lowell McAdams, the president and CEO of Verizon Wireless. He challenged the U.S. wireless industry to come together quickly to ward off the “clear and present danger” of new regulations from both federal and state government bodies.

Martin noted that 80% of U.S. consumers have a choice of four wireless companies, and 90% have three options. Putting “choices in the hands of consumers” is the key to promoting innovation, he added. Martin also commended the wireless industry for embracing openness.

“In less than a year, many of you have evolved from vocal opponents to vocal proponents,” Martin said. “Verizon Wireless has committed to opening its entire network. T-Mobile and Sprint, through the Open Handset Alliance, and AT&T are embracing openness for handsets and applications.”

Because of that shift, Martin added, “It’s premature for the commission to adopt any other requirements across the industry,” which is why he will support dismissing the Skype petition to apply Carterphone requirements across the network.

The one area where the FCC will remain active in regulating wireless is in public safety, Martin said, encouraging the industry to do a better job of location services for E911. “In some ways, you are a victim of your own success,” Martin said. As wireless usage proliferates, more E911 calls come from wireless phones, and consumers expect more and better connectivity all the time, Martin said.

CTIA is launching an informational campaign designed to promote what the wireless industry has done to embrace competition and openness, but McAdams said the industry must be prepared to do more.

“Our industry is at a critical crossroads,” McAdams said. “We cannot allow ourselves to be made into 21^st century version of regulated telephone companies. This is a clear and present danger for our industry. We have work to do to make sure there is no need for regulation. We have brought along some baggage we know we must discard.”

That includes disposing of existing policies and practices that are not consumer-friendly, and a “need to listen more closely to customers and respond more quickly,” McAdams said. “We need to embrace new entrants who will only fuel the innovation engine– that is how we un-invite potential intrusion from policy makers.”

The danger of regulation is that it will be cumbersome to innovation, will discourage new entrants and could raise prices to consumers, McAdams said. Given the pace at which wireless is evolving, any new rules would amount to a Polaroid snapshot that is outdated before the film dries, he said. The worst-case scenario, McAdams added, is 50 sets of regulatory requirements for individual states.

“Regulatory micromanagement will lead to less competition, less choice, higher costs for customers and service that no longer is seamless when customers travel across state boundaries,” McAdams said. “Consider that the wireless industry contributes greatly to the American economy. To tamper with the formula that built this economic growth engine is extremely dangerous. In a difficult economy, wireless has continued to be one of the few bright spots – creating jobs, launching new infrastructure and launching new services.”

Adding regulations also would discourage new entrants and thus dampen competition, McAdams said.