FCC Moving Forward on CETC Cap, Martin Says

Martin didn’t mention the universal service fund during brief remarks at CTIA. Last year, Martin insisted that USF be technology neutral -- a stance that wireless sources questioned in light of his support for a CETC cap. “I've been on the record supporting a cap on ETCs, I think it was before the joint board even adopted the recommendation,” Martin told reporters. “The item hasn’t been adopted yet. There aren’t three votes for it yet. I think it’s certainly moving in the right direction. We've responded [to the edits] already and I hope that we'll be able to get the item adopted and move forward.”

Asked about the McDowell edits, which call for a carveout for tribal lands including in Alaska but without mentioning carrier GCI in that state, Martin said, “I don’t think that there’s anything that would prevent us from being able to move forward. I anticipate being able to.”

Martin said the FCC will hold a hearing on ETFs in coming months comparable to the session on network management set for Stanford University this month. Wireless industry officials say they expect a broad hearing beyond wireless carrier ETFs.

“The industry wants federal preemption over state regulation, but to have federal preemption means that we have to have rules on what’s reasonable and unreasonable,” Martin said. Federal preemption “would have the benefit of more uniformity throughout the country, but it would require the commission to engage on the issue substantially.” The FCC would have to hold a hearing to give executives on both sides a chance to make their cases, he said.

“We would have to be the forum that people could come to and say, ‘This is a reasonable practice and this is an unreasonable practice,'” Martin said “You might be able to do it through a complaint process as opposed to just adopting a specific rule, but we would be deciding that.”

Martin told CTIA that with the trend to open networks through the 700 MHz auction and otherwise, he’s circulating a petition dismissing the Skype petition. “More and more wireless providers, including T-Mobile and Sprint through their participation in the Open Handset Alliance, and AT&T, are also embracing more openness in terms of devices and applications,” Martin said. “In light of the industry’s embrace of a more open wireless platform, it would be premature to adopt any other requirements across the industry.”

FCC Commissioner Michael Copps said the commission would be acting hastily if it dismisses the Skype petition. “This is not the time for the FCC to declare victory and withdraw from the fight for open wireless networks,” Copps said. “While we are all encouraged by preliminary commitments from some of the major carriers, we haven’t seen the details yet on how they are going to proceed -- and the devil is always in the details, isn’t it?.. I would be a lot happier if Chairman Martin had come out today in favor of a strong and unequivocal FCC commitment to non-discriminatory, pro-consumer conduct in the wireless world.”

Martin’s action is “premature,” said Rep. Mike Doyle, D- Pa., a member of the House Commerce Telecom Subcommittee. “I would have preferred that the FCC continue to monitor this situation,” Doyle said. “I'll continue to watch to make sure that consumers have access to the same open Internet, using the devices of their choosing and running the applications of their choice regardless of how they connect to it.”

Markham Erickson, executive director of the Open Internet Coalition, agreed that dismissing the petition would be a mistake. “The Skype petition helped lay the foundation for the FCC’s recently concluded 700 MHz auction and has generated more industry discussion of greater openness,” he said. “It is important to recognize that despite the wireless carriers’ discussion of increasing openness, the existing wireless handset marketplace for all consumers still remains closed. It would be a serious mistake for the FCC to dismiss Skype’s petition before we've seen whether the telecom companies will follow through on their promise.”

Public Knowledge and Free Press also disagreed with Martin’s justification for dismissing Skype’s petition. “The plans announced by one cellular company to be more open to devices and applications are just that -- plans,” said Public Knowledge President Gigi Sohn. “There are many details yet to be worked out, and consumers may not see the benefits of a fully opened equipment and application wireless service.” Open access rules on the 700 MHz C-Block aren’t a good reason either, she said. “There are no subscribers today in the 700 MHz spectrum block. Any benefits to subscribers in that one small slice of spectrum… won’t be known for many years.” Trusting carriers with the mobile Web is “short-sighted,” said Free Press Research Director Derek Turner. “The small handful of companies that dominate the wireless world have a track record of stifling competition and an aversion to innovation.”

Martin said the FCC will formally seek comment on revised rules for the auction of the 700 MHz D-block, which failed to sell on the first try, recently ended. To hold an auction this year, the FCC needs to have issued an order by about August, which means the further notice seeking comment should be released this month or next. Buildout requirements are on the table on timing, service quality and how much of the country must be served, as well as quality of service requirements, he indicated.

The FCC will also look at the role that would be played by the Public Safety Spectrum Trust and “how much latitude” they would have in negotiations, Martin said. “We've got to provide more certainty on the obligations that any winning bidders would be taking on,” he said. “I think at this point everything is on the table, but a majority of commissioners continue to support a set-aside of spectrum for an interoperable public safety network.”

Martin said he would consult his colleagues on next steps for the D-block. “I talk to all the commissioners all the time,” he said. “They need to give direction on what they want to do and I think frequently the other commissioners don’t engage before they have items in front of them, and even then sometimes not until the night before open meetings.” -- Howard Buskirk

CTIA Notebook…

CTIA Chairman Lowell McAdam, Verizon Wireless’ CEO, opened the conference Tuesday with an admonition that the wireless industry must fight creeping regulation. “We must now allow ourselves to be made into a 21st century version of a regulated telephone company,” he said. “This is a clear and present danger if our public policy leaders interfere with a customer driven marketplace and if our industry gives them a need to.” McAdam said the industry must listen closely to customers and welcome entry from other competitors. “If you think it’s a maturing industry, think again,” he said. “Don’t think 80 percent to 90 percent penetration is a ceiling when we can make it the floor.”