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FCC Tweaks Auction Rules on 700-MHz Wireless Broadband in Favor of Consumer Choice

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The Open Internet Coalition has praised the Federal Communications Commission for establishing rules in the upcoming 700-MHz auction to ensure that licensees must allow the use of any device or application of a specified portion of the 700-MHz spectrum. The rule represents a significant course correction that addresses the current lack of consumer choice resulting from a closed wireless platform that generally precludes device portability, device innovation-without-permission of the wireless carriers, and choices of applications.

At the same time, the coalition expressed disappointment that the FCC rejected proposals to require "wholesale open access" conditions on the auction winner. Such conditions promised to bring true competition to wireless broadband access and provide an alternative "third pipe" of broadband to the home (in addition to cable and DSL).

"It's certainly a step forward to liberate consumers from wireless devices that are locked to one carrier and from restrictive policies that keep consumers from accessing applications they want," said Markham Erickson, executive director of the Open Internet Coalition. "But it is unfortunate that after Chairman Martin announced his desire to facilitate the creation of a broadband third pipe, the FCC has rejected auction rules that would have gone a long way in realizing that goal. With the prospects today of a third pipe to the home less promising than we hoped, policymakers need to consider comprehensive broadband competition policies that will address the structural problem consumers face with the cable and telephone duopoly in broadband access."

"Just two months ago, the notion that the FCC would take such a big step forward to give consumers meaningful choice through this auction seemed unlikely at best," said Richard Whitt, Washington Telecom and Media Counsel for Google. "Todayùthanks in no small part to broad public support for greater competitionùthe FCC has embraced important principles of openness, and endorsed the unfettered workings of the free market for software applications and communications devices. Moreover, over the last few weeks several leading wireless carriers have reversed course and for the first time acknowledged our call for more open platforms in wireless networks. By any measure, that's real progress."

"This decision represents a small step forward for consumer choice in mobile phones, but a large step back for genuine broadband competition," said Ben Scott, policy director of Free Press. "The FCC's failure to place a wholesale condition on licenses in this auction means the chance for truly robust wireless broadband competition has been squandered. History will record today as an opportunity lost."

"Consumers should be pleased with part of the FCC's decision today," said Gigi Sohn, executive director of Public Knowledge. "In the new wireless services created as a result of this decision, they won't be forced to abandon cell phones or other devices they have purchased when they change service providers. However, the Commission's actions are a split decision for consumers because the Commission had the potential to do so much more. While Chairman Martin and some of the other commissioners spoke about the potential to help consumers by creating more competition for high-speed Internet services, at the end of the day they did nothing about it."

"Anyone who thinks the movement to open the wireless platform stops here should think again," said Harold Feld, senior vice president, Media Access Project. "The benefits Chairman Martin hopes for will not happen if the FCC decides it has solved the "iPhone problem" and can walk away. Nor will Americans quietly wait for years to enjoy features and services common in Europe and Asia if the auction winners drag their heels on implementation."

"The phone monopolies got what they wanted, and consumers will pay the price. Now customers are likely to see the same overpriced packages, lack of innovation, and undue fees with aggravating long-term lock-ins," said Chris Murray, senior counsel for Consumers Union.

Recent testimony before the House Subcommittee on Telecommunications and the Internet highlighted the gulf in consumer choice that exists between the U.S. and Europe. For example, wireless carriers in Europe are precluded from locking devices to a particular wireless provider. Today there are approximately 30 devices that a consumer can purchase to use on the Verizon Wireless network. In Europe, by contrast, there are approximately 800 devices that a consumer could purchase to use on Vodafone's wireless network. Vodafone is a joint owner of Verizon Wireless in the United States but operates its own wireless network in Europe.

About the Open Internet Coalition

The Open Internet Coalition Open Internet represents consumers, grassroots organizations, and businesses working in pursuit of a shared goal: keeping the Internet fast, open and accessible to all Americans.

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