Thomas Crowe, Esq.
On October 22nd, the Federal Communications Commission (“FCC”) released a Notice of Proposed Rulemaking (“Notice”) proposing new rules to protect the openness of the Internet. Facing what FCC Chairman Julius Genachowski called “the dangerous combination of an uncertain legal framework with ongoing as well as emerging challenges to a free and open Internet”, the FCC’s Notice seeks comment on the codification of six principles. Of particular interest to wireless agents and dealers is the FCC’s proposal (and request for comment) to apply these principles to all forms of broadband, including wireless. Depending on the degree and manner in which they are applied, the FCC’s new rules could significantly alter the structure of the wireless market in the U.S.
Background
In the Notice, the FCC identifies several challenges which it feels are threatening the openness of the internet to a degree which warrants new rules. In addition to the lack of competition among broadband providers, the FCC identifies the development of tools that allow network operators to prioritize or degrade different types of traffic as a primary challenge. The practice of traffic discrimination, the FCC says, has “the potential to change the Internet from an open platform that enables widespread innovation and entrepreneurship to an increasingly closed system with higher barriers to participation and reduced user choice and competition.”
In order to maintain the open and interconnected nature of the internet, the FCC now seeks to adopt six principles, four of which were originally articulated as “guidelines” in 2005, as binding rules. Four of these principles state that broadband consumers are entitled to a) access any lawful internet content of their choice; b) run applications and use services of their choice; c) connect legal devices of their choice; and d) competition among network, application, service, and content providers. The remaining two principles that the FCC seeks to codify would require that broadband service providers a) treat all lawful content, applications and services in a nondiscriminatory manner, and b) disclose such information concerning network management to the public as is reasonably required to ensure the enjoyment of the protections provided by the other five principles.
Wireless Implementation
As mentioned above, the FCC seeks to apply these new rules to all forms of broadband, including that provided by wireless cell phone carriers. Implementation of these rules to wireless broadband may have significant effects due to the degree of control which wireless carriers currently maintain over the devices and applications which are run on their networks. Proposed rules allowing consumers to run any application and connect any device, if applied to wireless networks, could radically change the way in which consumers interact with these networks. Such changes would most certainly be felt by wireless dealers and agents, who would need to adapt their businesses to the new wireless environment.
Possible effects of proposed rules could include greater availability of wireless devices on the market and a shift away from the subsidized phone model of business, in which wireless carriers offer substantial discounts on wireless devices in connection with a service contract. The FCC is separately considering whether to implement new rules regarding exclusivity arrangements between device manufacturers and wireless carriers, which could also potentially alter the market for wireless devices, and thus the way in which wireless dealers and agents do business. Such major changes to the ways in which carriers do business could very likely effect how carriers utilize wireless dealers and agents and their contracts.
Request for Comment
The Notice requests comment from the public by January 14, 2010 on all of the proposals and issues mentioned above. Many parties with significant financial stakes in the outcome of the proposed rules, including major wireless carriers, trade associations, device manufactures and content providers are prepared to devote significant resources to filing comments, meeting with the FCC, and lobbying federal legislators in order to affect the outcome of these proceedings.
This article is provided for informational purposes only, and is intended neither to provide nor to substitute for legal advice.
The author is a Washington, D.C.-based attorney specializing in communications legal/regulatory matters. Specialty services cover agreements with distributors and providers, FCC licenses, USF reporting and disputes, FCC Enforcement Bureau matters, CPNI, CALEA, state licensing, and more. Contact the firm by phone at 202-263-3640, by email at .(JavaScript must be enabled to view this email address) , or via the firm’s website, http://www.tkcrowe.com.