FCC Working on Device Interoperability Rules, Girding for Another Battle With Verizon, AT&T

The Federal Communications Commission is laying the groundwork for yet another battle with Verizon Wireless and AT&T over competition policy.

According to agency and industry sources, the FCC is expected to begin a formal rulemaking process by midyear that could result in manufacturers of handsets, chipsets, and network equipment being required to make their products compatible with all frequencies across the entire 700 megahertz band of radio spectrum -- not just particular slices under the control of Verizon and AT&T. “If you're a carrier that has only 1 million subscribers, you can't buy a handset that's uniquely designed for your 700 MHz band spectrum that's anywhere near cost-competitive to that of a Verizon or AT&T,” said Steven Berry, president and chief executive officer of the Rural Cellular Association. “This world is all about scale.” “Once my customer leaves my network and tries to go to another, they can't roam because it's technologically impossible.” Ben Moncrief C Spire Wireless Some manufacturers have declined requests to build phones and network equipment for C Spire Wireless, Cavalier Telephone, and U.S. Cellular, among others, for precisely this reason. If a manufacturer cannot sell 65 million to 80 million units globally, Berry noted, “they're just not making money.”

At the same time, many of the smaller, more regional carriers have stalled in their efforts to roll out the next generation of wireless coverage—4G—using the airwaves they purchased at the FCC's 700 MHz band auction in 2008.