March 2010

In an appearance in Seattle, former Federal Communications Commission Chairman Kevin Martin noted that when it comes to open access to wireless networks, the government is now more concerned about the obstructionist role that handset makers like Apple or Google play, than it is about the behavior of the wireless networks. But regulators have less control over the former.

During his stint as FCC Chairman, he helped push through rules in a spectrum auction that would require the winner—in this case, Verizon Wireless—to ensure open access to its network. While vague, it means that Verizon won't be able to limit users, devices or applications on the network. However, Verizon has just started to build-out its 4G network, so it's still unclear how that will be practiced. Martin said. "I think what the Commission did with the open access piece was an important step...Prior to 2007, there was resistance from the carriers to any kind of open architecture, including the inclusion of WiFi chips in devices, even though today that's perceived as a helpful thing....But I think we haven't been able to see the ultimate impact because they [Verizon] are still deploying it, I think it did contribute to the shift of the wireless industry, in general, and ultimately will benefit consumers."

Smart phone sales have exploded in recent months, with the number of users reaching 43 million in January, up 18 percent from October, according to survey firm comScore. Users of these Internet-enabled devices are texting more than ever (63.5 percent in January compared with 62 percent in October) and increasingly using their phones to access Facebook, Twitter and other social networking sites (17.1 percent vs. 13.8 percent), according to comScore. Almost two out of 10 users are downloading apps on their mobile phones, and 28.6 percent are using Web browsers on their phones.

[Commentary] Perhaps the most interesting aspect of FCC Chairman Julius Genachowski's recent call to identify 500 MHz of new spectrum for mobile broadband was his proposal to "buy back" licenses from the TV broadcasters. That implies that broadcasters own those licenses in the first place or even paid for them.

Like any other radio frequency license, broadcast licenses are owned by the people and held in public trust by the licensees. TV broadcasters received their original licenses for free. With very few exceptions, those licenses are renewed automatically. And in the age of blockbuster spectrum auctions, they each received gratis new digital TV licenses in exchange for their analog spectrum, which allowed them to broadcast more channels in higher quality (though to be fair they were forced to spend billions on upgrading their infrastructure).

My question is what exactly are we compensating them for? Is it the public service they provide? As part of their covenant with the people, broadcasters have to provide a certain amount of educational and public interest programming. In my mind, airing the presidential debates every four years, a few public service announcements featuring B-list celebrities and the schlock that's called the local news are pretty poor tradeoffs.

Wireless operators paid billions of dollars for their spectrum, and though they face fewer restrictions on how they use their licenses -- they can charge for service, for one thing -- regulation on the wireless industry is increasing. There's a growing expectation that broadband in both its fixed and mobile forms should be readily available to every American. There is increasing pressure on the FCC to mandate open networks. And the growing movement of net neutrality is affecting wireless as much as it is wireline.

The Obama administration is still "studying" the facts to determine whether it should challenge China's Internet practices before the World Trade Organization (WTO), US Trade Representative Ron Kirk said Tuesday.

However, Kirk stressed that he would still prefer to use direct negotiations to address China's tough online censorship rules, adding that strategic talks between U.S. officials and Chinese censors are likely to be more productive and less complicated than a protracted WTO fight.

"We are still dialoging, not just with Google, but with other Internet providers, to make sure we fully understand what is happening in China," Kirk told the National Press Club in a speech Tuesday. "And we are studying, trying to make our own determination, whether we believe [Chinese censorship] is in fact not WTO-compliant, and whether the best resolution is to go forward and file an appeal." However, Kirk quickly added: "Our preference, and my very strong preference ... is if we can get these resolved through direct negotiations, within the context of our dialogue with China.

Meanwhile, Google said it is fully prepared to shut down its China operation if that is the only way to end the country's censorship of its networks. "Google is firm in its decision to stop censoring in China," said Nicole Wong, Google's deputy general counsel, in a hearing today before the House Committee on Foreign Affairs. "We do not underestimate the seriousness or sensitivity of the decision is made...We are not going to change our decision." "If the option is that we shutter our .cn operation and leave the country, we are prepared to do that," she said.