WASHINGTON -- The wireless industry has come under intense scrutiny from federal regulators this year, some of it welcome, much of it not.
As the industry and its principal trade association, CTIA, look ahead to next year, two looming issues stand at the top of the policy agenda, shining examples of the love-hate relationship the wireless sector has with the government.
Those would be efforts to make more spectrum available to for advanced wireless data networks, a move the industry says is needed to stave off a crisis in the making, and network neutrality, which it vigorously opposes.
At a meeting with reporters week, CTIA executives outlined their policy agenda heading into the new year, a long list of priorities beginning with the goal of prodding Congress and the Federal Communications Commission to free up 800 MHz of spectrum for wireless networks.
But, they readily admitted, that figure represents a goal that is more aspirational than realistic.
"I'd be shocked if they give us 800 additional megahertz, but if we could get them moving forward on some significant portion of spectrum allocated to the wireless industry, we think that's going to go a long way," said Steve Largent, CTIA's president and CEO.
Reallocating spectrum, though a highly technical matter, also makes for a very political fight. Spectrum is generally considered a finite resource, and businesses and government agencies are famously reluctant to part with it.
CTIA's quest for spectrum will put it at odds with spectrum incumbents such as TV broadcasters and satellite companies, as well as government entities, most notably the Department of Defense.
Largent testified earlier this week before a House subcommittee that is considering a pair of bills that would require a thorough inventory of the current uses of wireless spectrum and speed the process of reallocation.
A similar inventory bill has been introduced in the Senate, which CTIA strongly supports.
"Let's just find out what's out there and who's using it for what purposes. And just examine the landscape and see how much spectrum there could be made available and then who owns that spectrum. We really don't know," Largent said. "In my opinion, it's a little bit of a knee-jerk reaction for DoD and the broadcasters just to think 'they're coming after us,' and that's not the case."
Largent said he fully expects government authorities to scrutinize the ways that the wireless companies he represents are using their own spectrum, though he argues their technology makes more efficient use of the airwaves than broadcasters and other groups. Additionally, CTIA could benefit from the political momentum that seems to be building around the broadband movement, as regulators and lawmakers warm up to the potential of the mobile Web.
But it won't be easy, and politics are politics, Largent admitted.
"Everyone's going to experience some pain," he said, holding out hope for a compromise. "We're not going to get all the spectrum we want. Broadcasters are going to have to give up something. The Department of Defense is going to have to give up a little bit, but at the end of the day, it'll work for everybody."
The Net neutrality broadside
But if the wireless industry is planning a full-court press to open up more spectrum, it's going to push back just as hard against efforts to make Net neutrality the law of the land, as the FCC appears poised to do early next year.
"Nobody's proven to me, anyway, that there's really a need for Net neutrality rules in the wireless space," Largent said. "You just can't point to very many instances where serves have been interrupted or prioritized or anything in an untoward manner."
Telecom providers, as a rule, have long dug in their heels against any attempt by the government to establish binding rules overseeing how they manage their networks. Those concerns are particularly acute among many members of the industry CTIA represents, which have argued that unlike fiber, copper or cable connections, wireless networks can easily be overwhelmed by data-intensive applications, to the point where critical transmissions like public-safety communications could go down.
In announcing his plan to establish Net neutrality rules for both wireless and wireline providers, FCC Chairman Julius Genachowski acknowledged that wireless warranted special treatment, but insisted that the nondiscrimination regulation should apply to all ISPs.
But for CTIA, any rule threatens the vitality of the industry.
"These aren't limitations that are public policy limitations," said Chris Guttman-McCabe, CTIA's vice president of regulatory affairs. "This is physics, right? There are limitation within technology and physics that require us to be treated differently."
He noted the seeming contradiction of policymakers admitting that wireless providers don't have the spectrum they need to give their networks sufficient capacity to support heavy data usage, while at the same time pressing for neutrality rules that would hold them to a similar standard as fiber and cable.
Still, with three of the five commissioners at the FCC already on record supporting Net rulemaking, it appears that CTIA might be fighting an uphill battle.
Among the other issues on the association's radar include backing a bill that would place a five-year moratorium on new wireless taxes, and one to remove cell phones from items considered listed property, an IRS designation that sets boundaries between work and personal use.
Additionally, the association is fighting measures that would restrict carriers' ability to impose early termination fees (ETF) on consumers for canceling a plan before the agreement expired. The FCC is looking into the issue, this week receiving responses to an inquiry from Verizon Wireless.
Early termination fees have also caught the attention of some lawmakers, with a Senate bill pending that would limit the rate and scope of the penalties.
But CTIA argues that carriers, who heavily subsidize the production and marketing costs of smartphones, recoup that money through subscriptions, which ETFs are meant to protect. Jot Carpenter, CTIA's point person on federal legislative issues, said that without ETFs, those subsidies will dry up, and consumers will end up paying the freight.
"I think the issue is a knee-jerk reaction on the Hill to what seems a populist issue," Carpenter said. "But if that really were enacted I think the logical result is the cost of handsets goes and I don't think that's a good outcome for consumers."