Wireless observers and experts – from CEOs to analysts – are busy formulating their impressions of just how the new Obama administration is likely to treat the wireless industry. The initial reaction has been relatively positive, based on early indications that this is a tech-savvy administration team not seen before. However, tricky issues such as network neutrality, DTV transition, public safety, spectrum allocation and a full menu of complicated issues will be on the table as the new administration takes shape
Yet conventional wisdom says this administration is better prepared to tackle wireless issues than any previous one. “For the first time, we have a technophile president, with an intuitive understanding of wireless technology. His administration and the FCC may take a more prudent, informed approach, and that’s a big deal for wireless, especially on the issue of network neutrality,” said Pete Dailey, research manager for Stratecast, a division of the research group Frost & Sullivan. “It’s clear operators are reluctant to invest in networks if they don’t think they can gain revenue. Obama has spoken forcibly for net neutrality, but it may not be as cut and dried as that.”
What is cut and dried, he noted, is the new administration’s ease-of-wireless technology use, which was clearly demonstrated during Obama’s presidential campaign. “Obama’s use of his BlackBerry is symbolic. But the tools his campaign used to organize the campaign is indicative of what is to come. For example, he promised his supporters a text message prior to the Biden vice president announcement, even before the TV networks knew. He has highlighted that with his transition team and the role telecommunications will play in his economic initiatives, and has a strong position on broadband serving more Americans. And wireless is a big part of that,” Dailey said.
The selection of Julius Genachowski as FCC chairman is more evidence of an administration with a tech attitude. Added Dailey: “His former companies are wireless, so his policy bias will definitely encourage network investment and increased availability of broadband networks.”
One investment already may be in play via a $6 billion wireless and broadband grant included in the House Appropriations Committee American Recovery & Reinvestment Bill, now being considered by Congress.
It is designed to “provide broadband services to underserved areas to strengthen the economy and provide business and job opportunities in every sector of America.” The bill also adds that “for every dollar invested in broadband, the economy sees a ten-fold return.”
SPRINT PUSHES AGENDA
One company with a lot at stake in the new administration’s wireless strategy is Sprint, which recently put two proposals on the table. The first is Special Access Reform, which would reduce considerably the cost to Sprint for access to links connecting its cell sites to switches. “The vast majority of backhaul lines are supplied by AT&T and Verizon. It’s an $18 billion-a-year service for these carriers. Sprint and others are forced to provide this service. It’s a market failure because there’s no alternative. If the administration wants broadband deployed, give us the funds we are overpaying so we can invest in cell sites, engineers, batteries and more. It creates jobs,” said a Sprint official who requested anonymity.
The second is a $2 billion Interoperable Emergency Public Safety Communications proposal that would build 100 satellite COLTS (Satellite-based Cell-On-Light Truck) vehicles and 100,000 pre-programmed handsets to 6-person teams.
And what is Sprint’s take on net neutrality and the new administration? “We have an obligation to protect and manage our network. The FCC and Congress have some people who disagree. This is a broken market and needs reform. Money must be freed up to grow our wireless and wireline businesses,” said John Taylor, a Sprint spokesman.
LET MARKET DECIDE?
Yet some insist on letting the market determine if reform is really needed. “Identify the problem in the wireless space before considering the need for regulation. We don’t see a need now. But we don’t see the harm in some form of net neutrality regulation,” said Christopher Guttman-McAbe, vice president of regulatory affairs for CTIA.
CTIA, he maintains, has raised issues such as sited tower space and more spectrum. “Our carriers are serving 150 million more subscribers with less spectrum than our international competitors.”
The DTV transition delay recommended by the administration, and public safety, also are high on CTIA’s radar screen. “We understand the DTV transition concerns raised by the administration. Delaying will actually help us move ahead with broadband deployments,” Guttman-McAbe said.
What are CTIA’s current thoughts on the new administration’s future treatment of wireless? “We believe the new administration will focus on broadband and improve the U.S. position in the world. And wireless is uniquely situated to address and solve that issue,” he said.
For companies such as Clearwire, the new administration brings a ray of hope to the wireless industry, albeit with some serious challenges, said Ben Wolff, the company’s CEO. “With the tech-savvy nature of the new administration, it has a better handle on how wireless will affect consumers. The economy will be an obstacle, and we need the administration not to do some things that could impede the industry’s progress. But it’s focused on the right things: more broadband to more people with more quality,” Wolff said.
The administration also comes with more experience in the wireless field, maintains Key Hyers, senior analyst for Technology Business Research. “Obama and his new administration grew up with mobile, not Ma Bell, so they understand the value of mobile communications. I don’t think they will sign legislation or policies that are harmful to telecoms and wireless, and will improve mobile communications.”
Just how all of this translates to the treatment given wireless by the new administration remains to be seen. Once thing is certain, however. The country is sure to see more mobile devices in the hands of Obama administration people.
Concluded Hyers: “Spectrum will be the biggest issue confronting the new administration, which is always hearing from mobile operators that they don’t have enough, and more people are expecting more from mobile devices. But I think the wireless industry should be excited about this new administration that is tech-savvy and understands wireless issues.”
Filed Under: Infrastructure