In three actions last week, the newly constituted five-member Federal Communications Commission began its examination of the wireless industry's practices, with an eye toward adopting rules that would lower prices and increase consumer choices. Among topics of the probe will be handset exclusivity deals, "truth-in-billing," and other competitive activities. In addition the FCC initiated an Inquiry into policies that will encourage innovation and investment in the wireless business. As expected, the Commission - heeding Congressional calls for a review of mobile phone carriers - said it will probe the ways in which wireless carriers set up relationships with handset makers. The commissioners also agreed unanimously to launch companion inquiries into policies that will "encourage a new generation of innovators, working with new tools, on new platforms," as FCC Chairman Julius Genachowski put it.
The first round of industry and public comments on the FCC proposals - which total more than 100 pages - are due September 28. Although the Commission has not put a timetable on its Inquiries, it is expected that specific actions will begin to surface next year. The entire process is likely to take several years. During that period, Verizon Wireless, AT&T, Sprint and T-Mobile will be under scrutiny and, as one Wall Street analyst noted, "will have to act accordingly."
Although the three FCC actions received unanimous FCC approval, observers noticed that there were some tensions as the five commissioners (three of whom were appointed this summer) discussed the wireless plans. The three Democrats are seeking recommendations for concrete steps to curb corporate abuses, while the two Republican members lean toward marketplace solutions and mild regulation.