November 2011

Verizon and MetroPCS are pursuing lawsuits against the Federal Communications Commission, claiming the agency doesn't have the legal authority to issue network neutrality/open Internet rules. Meanwhile, on the other side of the question, the group Free Press has also sued the FCC because the rules don't apply to mobile services. The question could remain open for years.

In the meantime, people connecting to the Internet from terrestrial networks are protected from having their online experiences interfered with by Internet service providers, but mobile broadband users -- who are, of course, growing in number -- aren't. The idea behind net neutrality is to prevent ISPs from slowing down or speeding up traffic (or even blocking it) to favor one source or type of data over another. It comes down to this: data flows on the Internet must be regulated. The question is whether to put that control in the hands of government (which would protect the status quo) or in the hands of corporations (which could potentially decide which kinds of content people can easily access.) It increasingly looks like the ultimate decision will be made by the federal courts.

CTIA-The Wireless Association said it plans to appeal a federal judge's ruling that narrowed San Francisco's first-in-the-nation law requiring cellphone dealers to warn customers about possible radiation dangers.

In a legal filing, CTIA said it would ask a federal appeals court to prevent the scaled-down ordinance from taking effect Nov. 30 while the trade group challenges the judge's decision. While the group wants the entire ordinance blocked, the city's lawyer said San Francisco would ask the appeals court to reinstate it in full. The measure, which was to have gone into effect in mid-October, would require retailers to give each cell-phone buyer a fact sheet saying the World Health Organization had classified the phones' radio-frequency emissions as a "possible carcinogen." The sheet also shows human silhouettes absorbing radiation and suggests protective measures, like wearing headsets, making shorter calls and limiting use by children. Retailers would also have to put similar messages on large wall posters and on stickers attached to display ads. U.S. District Judge William Alsup barred enforcement of parts of the ordinance in an Oct. 28 ruling, saying they appeared to violate the sellers' freedom of speech by forcing them to endorse messages they opposed. He said the warnings gave the misleading impression that cell phones are unregulated and dangerous. In fact, he said, they must meet safety standards set by the Federal Communications Commission, which has not found that the devices emit dangerous levels of radiation. Judge Alsup told the city to rewrite the fact sheet to mention FCC regulation and the fact that the World Health Organization's classification of cell phones as a "possible" cause of cancer was less serious than rating the devices as probable or definite carcinogens. He also told city officials to drop the requirements for wall posters and stickers and to remove the silhouettes from the fact sheets, saying the drawings contain "too much opinion and too little fact." But he said San Francisco is entitled to require sellers to give customers "accurate and uncontroversial facts" about a "plausible public health threat" as long as it is clear the message comes from the city. CTIA said in court papers that the new fact sheet, although preferable to the original version, still violates freedom of expression and would be challenged on appeal.

House Republicans on the Commerce Committee are pitching their Federal Communications Commission regulation reform bills (HR 3309 and 3310) as a way to apply President Barack Obama's regulatory reform principles to independent agencies -- in this case the FCC -- not bound by his Executive Order on regulatory review.

"Many of the provisions are based on principles contained in the president's January 2011 Executive Order," said committee staffers. "Because that order applies only to executive agencies, it does not bind the Commission. While Chairman Genachowski has made good progress in improving process, only statutory changes can ensure that best practices continue from one administration to the next." The staffers suggested that the FCC's handling of the recently released Universal Service Reform order was not one of those best practices. "The Commission added hundreds of pages of documents into the record at the last minute, giving parties almost no time to respond," they wrote in the memo." And the Commission has still not released the text of the adopted order, preventing stakeholders and the public from knowing what the Commission has done." The bills would require the FCC to justify regulations according to costs and benefits, survey the state of the marketplace periodically, and before initiating any new rulemakings, take other steps to make sure the public is getting bang for its regulatory buck, apply shot clocks to decisions, put a "narrowly tailored" restriction on all merger conditions, and a lot more.

Apple’s decision to delay until September the launch of the iPhone 4S put a damper on what is usually a very merry pre-holiday quarter for the U.S. wireless industry.

In total, the four nationwide mobile operators roped in 767,000 postpaid subscribers in the third quarter, a 14.5 percent decrease from last year, according to UBS. In comparison, second quarter net postpaid adds increased 9.2 percent year over year – a quarter where there is traditionally no new iPhone to offer operators a bump, but this year was aided by Verizon’s snagging a CDMA version of the iconic device. The two major iPhone slingers didn’t do badly in the third quarter, but in UBS’ view their net adds were nowhere near the numbers either operator would have achieved if they had new iPhones to offer subscribers. The fourth quarter could be a bonanza for the wireless industry, combining the usual holiday craziness with the traditional third-quarter new-iPhone bump. UBS predicts a whopping 11.7 million iPhone activations between Verizon, AT&T and Sprint in the final three months of the year. That will result in 1.3 million total postpaid adds for national operators, up from 1 million in last year’s fourth quarter, UBS projects.