Wireless Net Neutrality Proposals Inconsistent with Carterfone and Similar FCC Decisions, New Phoenix Center Bulletin Shows

Wireless Net Neutrality Proposals Inconsistent with Carterfone and Similar FCC Decisions, New Phoenix Center Bulletin Shows

Proposed Regulation Could `Substantially Harm the Prospects for Entry and Competition'

WASHINGTON, April 30 /PRNewswire-USNewswire/ -- A new study released today by the Phoenix Center shows that "wireless network neutrality" proposals are both inconsistent with Federal Communications Commission precedent and, if implemented, could present substantial risks to consumers and competition. Phoenix Center Policy Bulletin 17, Wireless Net Neutrality: From Carterfone to Cable Boxes, demonstrates that neither the mandates of, nor the conditions relevant to, Carterfone and the FCC's recent cable set-top box interoperability decisions support the severe form of regulatory intervention sought by wireless net neutrality advocates.

"The FCC's Carterfone decision addressed a monolithic and completely vertically integrated and regulated Bell System - conditions that are entirely absent in today's wireless industry," said Phoenix Center President and study co-author Lawrence J. Spiwak. "And the Commission has not applied its cable set-top box rules in instances in which boxes are readily available at retail outlets, just as a broad array of mobile phones are available in any electronics store."

The Bulletin urges policymakers to apply a cost-benefit analysis to wireless net neutrality proposals and notes "the substantial risks that Carterfone-type regulation would commoditize wireless network services in a way that could substantially harm the prospects for entry and competition in the industry." The Bulletin observes that "the United States has a much broader diversity of wireless network platforms and more competition than markets where governments have taken much stronger command-and-control approaches."

"It is one thing to get the law wrong, it is quite another thing to make a proposal that could radically restructure the nation's wireless industry without a detailed showing of the purported costs and benefits," said Thomas M. Koutsky, Phoenix Center Resident Scholar and co-author of the study. "The level of complexity involved in a regulator trying to micromanage the technical interface between hundreds of kinds of mobile devices and multiple wireless networks across the United States is unfathomable."

"The Carterfone rules were needed because the Bell System was a vertically integrated local telephone monopoly that was regulated at all levels of its business," said George S. Ford, Chief Economist of the Phoenix Center and co- author of the study. "Those two factors together created the incentive for the firm to leverage its position into the equipment market and sabotage equipment manufacturers. And both factors are simply not present in today's wireless communications industry."

Phoenix Center Policy Bulletin No. 17, Wireless Net Neutrality: From Carterfone to Cable Boxes, may be downloaded free from the Phoenix Center's web page at:

http://www.phoenix-center.org/PolicyBulletin/PCPB17Final.pdf.

The Phoenix Center is an international, non-profit 501(c)(3) organization that studies broad public-policy issues related to governance, social and economic conditions, with a particular emphasis on the law and economics of telecommunications and high-tech industries.

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Web Page: http://www.phoenix-center.org/

Source: Phoenix Center

CONTACT: Lawrence J. Spiwak, Phoenix Center, +1-202-274-0235

Web site:

http://www.phoenix-center.org/

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