07 0221 mobile technologies

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Mobile Technologies

NARUC Telecommunications Committee

Wireless Workgroup

February 2007



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TABLE OF CONTENTS

I. Introduction……………………………………………………………………..………..5

II. What “Wireless” Means – Voice & Beyond……………………………………………..6

A. Wireless Voice Technology .............................................. .................................................. 7

B. Wireless Technologies Broader in Scope than Voice Technologies .................................. 7 1. Wireless Broadband ................................................... ................................................... .. 72. Wi-Fi ..................................................... ....................................................... ................... 83. WiMAX ................................................ ....................................................... ................... 94. Wireless Local Area Networks (LANs).................................. ...................................... 105. EV-DO ............................................... ........................................................ ................... 106. Ultra wideband.......................................................... .................................................... 107. Bluetooth.............. ....................................................... .................................................. 11

8. GPS .................................................... ........................................................ ................... 129. RFID .................................................... ....................................................... .................. 1210. Biometrics............................................. ................................................... ..................... 1211. 3G Technology...................................... ........................................................ ................ 1312. Higher Speeds & Mobile Broadband Services ................................................... .......... 14

C. Data Applications......................................................... ..................................................... 14

D. Convergence of Wireless Device Functionality ....................................................... ........ 16 1. Cellular Phones ...................................................... ....................................................... 162. Smartphones................................. ................................................... .............................. 173. Wireless E-mail Devices..................................................... .......................................... 184. Pocket PCs/PDAs........................................................................ .................................. 185. Laptop Computers.................................. ........................................................ ............... 196. Bluetooth Devices............................................ .................................................... ......... 207. Digital Cameras ........................................................ .................................................... 218. M-Commerce – Major component of Wireless Sector ............................................. .... 21

III. What “Wireless” Means – Consumer & Economic Interests & Challenges ……………22

A. Consumer and Societal Interests and Challenges ........................................... .................. 23 1. Current FCC Data Regarding Extent of Wireless Industry Competition ..................... 232. Consumer and Societal Benefits ................................................... ................................ 24

a. Improved Communication ................................................. ....................................... 24 b. Education ....................................................... ........................................................ ... 25c. Rural Consumers........................................ .................................................... ........... 26d. Business Consumers .................................................... ............................................. 27e. Special Needs Consumers..................... .................................................... ................ 27f. Improved Healthcare – Telemedicine................................................ ....................... 31g. Disaster Relief.................................... ........................................................ ............... 32



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7. North Carolina ..................................................... ........................................................ . 408. North Dakota.................... ........................................................ ..................................... 419. South Dakota....................... ........................................................ .................................. 4210. Tennessee................................................. ....................................................... .............. 42 11. Texas ..................................................... ........................................................ ................ 44

12. Virginia ................................................. ........................................................ ................ 44



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I. Introduction

For approximately 228 million Americans, 1 wireless telecommunications is a means bywhich they place and receive voice communications free of cables or cords and without beingconfined to any one location. However, the wireless voice sector is not comprised only of

cellular and personal communications service (PCS) voice services. In fact, the wireless sectorencompasses a whole host of products and services in addition to voice, such as innovative broadband technologies like world interoperability for microwave access (WiMAX).

Today, wireless services are prevalent in almost every aspect of our society. Such ubiquityraises many public policy issues that the wireless industry may have to address. The FCC regulatesthe entry of wireless voice providers and has essentially deregulated rates given the high level ofcompetition in wireless. State utility agencies regulate the terms and conditions of service, ifallowed by State law and policy. State utility agencies are generally concerned with how thewireless voice service impacts certain social issues, such as E-911, universal service, accesscharges, and consumer affairs. The growing importance of wireless communications combined

with the regulators’ need to continually assess the public policy impact of what is regulated andwhy it is, is what gave rise to this paper. Therefore, this paper’s objectives are:

• To explore the value that consumers place on their wireless devices through anoverview of the wireless sector’s impact beyond voice services, its economicimportance and value to consumers, and its capacity for enhancing thedeployment of broadband technologies.

• To discuss those policy issues for which regulators have concerns, such asconsumer service, access and benefits, and public safety.

• To assess wireless regulation in light of the principles adopted by NARUC in itsTelecom and Federalism White Paper, adopted July 2005 – technologicalneutrality and core competencies of levels of government.

• To enhance NARUC’s proactive public policy advocacy and highlight States’ best practices and approaches.

• To carefully consider the implications of regulation; specifically, to demonstrate a balanced approach to the regulation of key wireless voice issues.

• To encourage proactive regulatory approaches which benefit the consumer’s

experience by facilitating wireless investment.

• To discuss non-regulatory solutions which offer reasonable perspectives in thefederal policy debate and focus attention on important public policy issues.

1 http://www.ctia.org



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Overview of White Paper

This white paper addresses some key topics for regulators to consider regarding wirelesscommunications: What is meant by “wireless”; what are the implications for consumers and theeconomy; what current policy issues are being debated; and, what are some of the proactive

approaches states are taking with respect to wireless issues. The paper contains the followingsections:

Section II: What “Wireless” Means – Voice & Beyond - This section highlights anumber of wireless technologies and applications that reach beyondcellular voice service. This section also explores the convergence ofwireless device functionality. These concepts are important to understand

because regulators must comprehend the structure and development of theindustry in order to ensure that regulations are structured to benefitconsumers and encourage continued investment and innovation by

providers. It will be shown that the current market evinces a robust

competitiveness among these technologies and services.Section III: What “Wireless” Means – Consumer and Economic Interests and

Challenges - This section explores a range of consumer and societalinterests and challenges in wireless technologies. This section also

provides a brief overview of the economic impact of the wireless sector.

Section IV: What “Wireless” Means –Select Policy Issues - This section identifiescurrent policy issues relating to wireless products and services, anddescribes how different regulatory agencies – the FCC, states, etc. – haveresponded.

Section V: State Best Practices and Proactive Approaches - This section discussesvarious State approaches with respect to wireless services. The paperexplores certain State practices that NARUC believes most effectivelyfurthers the goals of protecting the consumer and providing for the publicwelfare.

II. What “Wireless” Means – Voice & Beyond

Despite the overwhelming popularity of the cell phone and its entry into thecommunications sector as a voice device, “wireless” encompasses a great deal more than just thecell phone. Wireless includes promising wireless broadband technologies such as wirelessfidelity (Wi-Fi), WiMAX, and next generation cellular networks along with a host of dataapplications (whether on a cell phone or some other standalone wireless device, such as a

personal digital assistant (PDA)), including instant messaging, e-mail, games, music, ring tones,scrolling stock quotes, news, etc.

The following subsections discuss traditional wireless technology as well as numeroustechnologies and applications that reach beyond traditional voice applications.



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A . Wireless Voice Technology

Wireless phones transmit telephone calls via a system of radio waves and towers orantennas. 2 Because radio waves travel though the air and can be interrupted by any number offactors, including weather, topography and manmade infrastructure, wireless phone service can

be less reliable than traditional landline service at times.3

While coverage is expanding, the ability to place or complete a call may be complicated by limitations inherent in the existing wireless network’s architecture. For example, the locationof antennas, the number of callers using the airwaves and/or antenna at a given time, topography,and the architecture surrounding the caller can affect the ability to place a call. 4 “Dropped calls”usually occur when there are too few (or no) cell antennas in the area where the caller is located. 5 When many consumers use a carrier’s network at the same time, the network’s capacity may bestrained and a “busy signal” will result instead of call completion. 6 “Dead spots” result when thesignal between the handset and the cell tower is blocked, usually by hilly terrain, excessivefoliage or tall buildings.

B. Wireless Technologies Broader in Scope than Voice Technologies

1. Wireless Broadband

Wireless broadband is an increasing market segment. 7 The FCC defines broadbandservice as data transmission speeds exceeding 200 kilobits per second (Kbps), or 200,000 bits persecond, in at least one direction. Users may use wireless PDAs to access the Internet, receiveand send email, download video and music, and more. It has been predicted that “[o]ver half ofthe population of North America will use wireless networking that’s not cellular by 2011.” 8 It

therefore appears that wireless providers have the potential to become viable competitors in the broadband market and offer a vehicle for reaching areas not yet served by wire line broadband.

2 “Understanding Wireless Phone Coverage Areas,” FCC Consumer Facts,http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html3 “Understanding Wireless Phone Coverage Areas,” FCC Consumer Facts,http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html4 “Understanding Wireless Phone Coverage Areas,” FCC Consumer Facts,http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html5 “Understanding Wireless Phone Coverage Areas,” FCC Consumer Facts,http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html6 “Understanding Wireless Phone Coverage Areas,” FCC Consumer Facts,

http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html7 Significant statistical information regarding wireless broadband deployment in each State is available through theFCC’s semi-annual Form 477, Local Competition and Broadband Reporting. All wireless providers offering

broadband service, like other providers of broadband services, must file the Form 477 twice annually regarding their broadband service offerings. Most, if not all wireless broadband providers, file the Form 477 twice annuallyregarding their broadband service offerings. Most, if not all wireless broadband providers, file the Form 477 reportwith the FCC on a confidential basis. However, State utility commissions may obtain provider-specific informationregarding filed by providers in their respective states provided that the State commission has protections in place to

preclude disclosure of any confidential information 47 C.F.R. § 43.11(c).8Ray, Tiernan, “Wi-Fi’s Promise may elude investors,” Barron’s Online, September 26, 2005.



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In 2004, approximately 1.6 million U.S. homes subscribed to wireless broadband. 9 Though cablemodem and DSL dominated the home broadband market that same year with a combined 46million subscribers, 10 wireless broadband can offer the unique advantage of mobility. 11 Wirelessservices often times are more cost effective and efficient way to provide services to rural andsparsely populated areas.

2. Wi-Fi

Wi-Fi is “a form of wireless broadband technology that involves multiple antennae thatsend parallel streams of data.” 12 Wi-Fi is a registered trademark term promoted by the Wi-FiAlliance, a group of wireless Internet hardware and software providers that certify “802.11”

products for network interoperability. 13 Wi-Fi is currently deployed in buildings, such as homes,restaurants, hotels, and airports, or open locations, such as city parks and university campuses,

but has the capacity to evolve into “go-anywhere, connect-anywhere” type of networking. 14 As aresult of Wi-Fi’s MIMO (multiple-input, multiple output) technology, Wi-Fi’s bandwidth hasincreased from 54 Mbps to 108 Mbps and is predicted to ultimately reach 500 Mbps. 15 However,

computer users can only access the Internet with a Wi-Fi high-speed wireless connection if theare within 300 feet of a transmitting antenna and have the appropriate receiving hardwareinstalled in their computers. 16

Wi-Fi networks can be set up by installing multiple toaster-size antennas on street lights,traffic signals, and buildings, so that multiple wireless hotspots overlap each other to form acontinuous “mesh” network of wireless signals. 17 In order to provide an initial connection to theInternet and to manage network traffic, backbone technology must be installed at one or more

points connected to the network. 18 The installation of such a wireless network may be lessexpensive than installing a wireline network of the same size. 19 To this end, a growing numberof municipalities are currently experimenting with citywide Wi-Fi systems that will either

supplement existing wired networks or provide service to the underserved. But, as the Federal

9 In its Eleventh CMRS Competition Report, the FCC observed that the deployment of next-generation networks based on competing technological standards continues to be an important dimension of non-price rivalry in the U.S.mobile communications market. Eleventh CMRS Competition Report, ¶ 3. Mobile data providers have

progressively introduced a wide variety of mobile data services and applications, such as over the air musicdownloading services for mobile phones; high speed wireless Internet access services for laptops, and video servicesenabling customers to watch video clips of television shows, sports, news, weather, and other content on advancedhandsets. Id ., ¶¶ 136-38.10 “Business & Technology Trends Driving Voice, Video and Data Services,” Carolyn Brandon, CTIA, June 2005.11

Wireless broadband technologies do not currently match the speeds offered by cable and DSL; however,continuous technological advances are narrowing the gap on speed disparities.12 Ray, Tiernan, “Wi-Fi’s Promise May Elude Investors,” Barron’s Online, September 26, 2005.13 Municipal Provision of Wireless Internet , FTC Staff Report (Federal Trade Commission, Sept. 2006)14 Ray, Tiernan, “Wi-Fi’s Promise May Elude Investors,” Barron’s Online, September 26, 2005.15 Ray, Tiernan, “Wi-Fi’s Promise May Elude Investors,” Barron’s Online, September 26, 2005.16 Municipal Provision of Wireless Internet , FTC Staff Report (Federal Trade Commission, Sept. 2006)17 Id. 18 Id.19 Id.



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Trade Commission (FTC) has noted, whether the long-term operating costs of such a wirelessnetwork are more or less than those of a comparable wireline network is not clear at this point. 20

Spectrum used for Wi-Fi does not require a license in the U.S. while the spectrum usedfor licensed wireless service is sold at auction. 21 As of January 21, 2006, there were 6,515 hot

spots in North America and 14,017 hot spots worldwide.22

Market research firm, Del’OroGroup, estimated that sales of Wi-Fi gear increased by 16% to $2.64 billion in 2005. 23 Yet whileWi-Fi addresses broadband access in popular public locations, it does not provide truewidespread mobility. 24

3. WiMAX

WiMAX is another promising wireless broadband technology. 25 It offers mobility over a“hot zone,” a much larger area (up to a four-to-six mile range 26) than is covered by a Wi-Fideployment, 27 peak speeds of 20 Mbps, 28 and is relatively cost-effective. In the words of Intel’sJames A. Johnson, “WiMAX is very cost effective technology to quickly deploy in the regions

which otherwise would not have broadband access. So WiMAX helps spread broadband to moreusers more quickly.” 29

With Nokia and Intel’s latest announcement of plans to make WiMAX a new standard, 30 expansion of the technology appears to be likely. Intel’s backing, in fact, prompted the statementthat “broadband wireless looks like it might bust out of its niche and become something of a rivalto cellular, cable and phone networks.” 31 Perhaps most notably, in 2006 Sprint-Nextelannounced that it plans to spend as much as $3 billion through 2008 building a WiMAXnetwork. 32 Though WiMAX may face some difficulty with the video portion of the voice, video,and data “triple play,” some predict that partnerships among satellite, wireless and wired serviceswill likely address such drawbacks. 33

20 Id.21 Tiernan, Ray, “Wi-Fi's Promise May Elude Investors,” Barron’s Online, June 28, 2005.22 Hotspot Statistics, http://www.wifinder.com/.23 Tiernan, Ray, “Wi-Fi’s Promise May Elude Investors,” Barron’s Online, September 26, 2005.24 “Business & Technology Trends Driving Voice, Video and Data Services,” Carolyn Brandon, CTIA, June 2005.25 WiMAX is a registered trademark term promoted by the WiMAX Forum, a group of wireless Internet hardwareand software providers that certify “802.16” products for network interoperability, Municipal Provision of Wireless

Internet, FTC Staff Report (Federal Trade Commission, Sept. 2006) at 9.26 “Wireless Broadband: High Speed Goes Mobile,” CTIA, March 2005.27 David Pringle and Don Clark, “Nokia, Intel Plan to Collaborate On Wireless Technology WiMAX,” Wall Street

Journal, June 10, 2005; Page B3.28 The Wireless Alphabet Soup,” CNET News, February 14, 2006.29 “WiMAX: Wireless Broadband for the World – An Interview with Jim Johnson,”http://www.intel.com/netcomms/columns/jimj105.htm .30 David Pringle and Don Clark, “Nokia, Intel Plan to Collaborate On Wireless Technology WiMAX,” Wall StreetJournal, June 10, 2005; at p. B3.31 Bill Alpert, “WiMax’s Strong Signal,” Barron’s Online, July 4, 2005.32 Sprint Nextel Announces 4G Wireless Broadband Initiative with Intel, Motorola and Samsung”http://www2.sprint.com/mr/news_ddtl.do?id=1296033 Bill Alpert, “WiMax’s Strong Signal,” Barron’s Online, July 4, 2005.



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4. Wireless Local Area Networks (LANs)

A wireless local area network (LAN) is a type of local-area network that uses high-frequency radio waves rather than wires to communicate between nodes. 34 Each node, whichmay be a personal computer, workstation or printer, has its own central processing unit (CPU)

which it uses to execute programs, but it can also remotely access data and other devicesanywhere on the LAN. 35 This allows multiple users to share expensive devices (such as laser printers), access data from remote locations, and communicate with each other by exchanging e-mail. 36 LANs are only able to encompass relatively small areas, and most are confined to asingle building or group of buildings. 37 Forrester Research recently found that 25% of businessesin North America and Europe are deploying, or considering deploying, wireless local areanetworks (LANs). 38

5. EV-DO

EVDO, which stands for Evolution Data Only or Evolution Data Optimized EV-DO,

EvDO, 1xEV-DO or 1xEvDO, is fast wireless broadband access that does not require access to aWiFi hotspot. 39 EVDO networks can be accessed with EVDO capable phones or by inserting anEVDO PC card into your laptop, which provides a wireless connection to the Internet at very fastspeeds; average download speeds are between 400Kbps and 700Kbps. 40 EVDO has manyadvantages. EVDO’s signal can travel on the same cellular sites as cellular phones, there is nolimited range from the cell tower or “hot spot” that must be accessed, users can gain accessanywhere they can locate a secure, encrypted cellular signal, users can download and run videoclips in real time, and EVDO can provide service to customers that are outside of traditionalcable-modem or DSL areas. 41

Verizon EVDO and Sprint EVDO are currently available. 42 Verizon has indicated that itwill invest $1 billion in EVDO over the next two years. 43 At speeds of about 10 times theaverage dial-up speed (or 300-500 Kbps), Verizon’s EV-DO offering is being marketed at a flatrate to consumers and businesses in certain markets. 44

6. Ultra wideband

Ultra wideband (also known as UWB or as digital pulse wireless) is a wirelesstechnology used “for transmitting large amounts of digital data over a wide spectrum of

34 Definition of local-area network, http://www.webopedia.com/TERM/l/local_area_network_LAN.html.35 Id. 36 Id.37

Id. 38 Ray, Tiernan, “Wi-Fi’s Promise May Elude Investors,” Barron’s Online, September 26, 2005.39 “What is EVDO,” http://www.evdoinfo.com/EVDO/Info/What_is_EVDO_2005021237/.40 Id.41 Id.42 Id.43 Chris Davey, “CDMA2000 1xEV-DO: Affordable Wireless High Speed Data Today,” Qualcomm, January 24,2005.44 Chris Davey, “CDMA2000 1xEV-DO: Affordable Wireless High Speed Data Today,” Qualcomm, January 24,2005.



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frequency bands with very low power for a short distance.” 45 In addition to being able to carryhuge amounts of data over a short distance (up to 230 feet) at very low power, ultra widebandradio also has the ability to carry signals through doors and other obstacles. 46

Although ultra wideband has traditionally had only two main types of applications

(applications involving radar and voice and data transmission using digital pulses, allowing a low powered signal to carry information at high rates within a restricted range), 47 it may have asignificant impact on electronic products in the future. 48 According to a Dow Jones Newswirereport, ultra wideband will be embedded in electronic products starting in 2006 to boost speedand data capacity so that consumers will be able to finally break free from the plethora of electriccords. In the initial stages, adapters will be available to connect existing electronic deviceswirelessly, but as early as 2007, the technology will be included on some high-end cell phonesand MP3 players to facilitate adapter-less beaming of music and video from their computersfrom up to 30 feet away. 49 According to a study by UWB chip maker, Alereon Inc., sales of

products embedded with UWB technology will rise to 2.4 million in 2006, will reachapproximately 15 million in 2007, and will total an estimated 140.2 million by 2009. 50

7. Bluetooth

“Bluetooth wireless technology is a short-range communications system intended toreplace the cables connecting portable and/or fixed electronic devices.” 51 The Bluetooth coresystem is comprised of an RF transceiver, baseband, and protocol stack. 52 The Bluetooth system

provides services that enable the connection of devices and the exchange of a variety of dataclasses between these devices. 53

Bluetooth technology enables mobile phones, computers, and personal digital assistants(PDAs) to be easily interconnected using a short-range wireless connection. 54 “Using this

technology, users of cellular phones, pagers, and personal digital assistants can buy a three-in-one phone that can double as a portable phone at home or in the office, get quickly synchronizedwith information in a desktop or notebook computer, initiate the sending or receiving of a fax,initiate a print-out, and, in general, have all mobile and fixed computer devices be totally

45 Ultra Wideband definition, http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci213243,00.html“Ultra wideband broadcasts digital pulses that are timed very precisely on a carrier signal across a very widespectrum (number of frequency channels) at the same time. Transmitter and receiver must be coordinated to sendand receive pulses with an accuracy of trillionths of a second. On any given frequency band that may already be inuse, the ultra wideband signal has less power than the normal and anticipated background noise so theoretically nointerference is possible.” Id. 46

Ultra Wideband definition, http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci213243,00.html.47 Ultra Wideband definition, http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci213243,00.html.48 See Judy Lam, “Ultrawideband Promises Boost to Wireless World,” Dow Jones Newswires, June 16, 2005; PageB4.49 Judy Lam, “Ultrawideband Promises Boost to Wireless World,” Dow Jones Newswires, June 16, 2005; Page B4.50 Id .51 Bluetooth Website, “How Bluetooth Technology Works,” http://www.bluetooth.com/Bluetooth/Learn/Works/.52 Bluetooth Website, “How Bluetooth Technology Works,” http://www.bluetooth.com/Bluetooth/Learn/Works/.53 Bluetooth Website, “How Bluetooth Technology Works,” http://www.bluetooth.com/Bluetooth/Learn/Works/.54 Bluetooth definition, http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci211680,00.html.



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coordinated.” 55 Bluetooth, however, requires that a low-cost transceiver chip be included in eachdevice.

8. GPS

The Global Positioning System (GPS) is a grouping of twenty-four satellites that orbit theEarth making it possible for people with ground receivers to pinpoint their geographic location.GPS location accuracy is generally anywhere from 100 to 10 meters depending upon theequipment, but can be pinpointed to within one (1) meter when special military-approvedequipment is used. GPS equipment is widely used in science and has become increasinglyaffordable permitting almost anyone to own a GPS receiver. The US Department of Defenseowns and operates GPS, but makes it available for general use around the world. 56

9. RFID

RFID (radio frequency identification) is a wireless technology that “incorporates the use

of electromagnetic or electrostatic coupling in the radio frequency (RF) portion of theelectromagnetic spectrum to uniquely identify an object, animal, or person.” 57 An RFID systemhas three components: an antenna and transceiver (often combined into one reader) and atransponder, sometimes referred to as the “tag.” 58 The antenna transmits a signal over radiowaves and activates the transponder. 59 Once activated, the tag transmits data back to theantenna. 60 RFID is increasingly being used as an alternative to the bar code that has theadvantage of not requiring direct contact or line-of-sight scanning. 61 RFID tags are also used totrack assets, manage inventory and authorize payments, and they increasingly serve as electronickeys for everything from autos to secure facilities.

10. Biometrics

Biometrics is a method of verifying an individual’s identity based on physical featureslike fingerprints or iris patterns. 62 Biometrics has emerged in the wireless industry as a result ofgrowing security concerns. 63 Passwords have proven to be vulnerable and forgettable and are,therefore, generally thought of as unreliable for security purposes. 64 Biometrics has the potentialto secure networks and data without placing any responsibility on the user. 65

55 Bluetooth definition, http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci211680,00.html.56 GPS definition, http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci213986,00.html57 RFID definition, http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci805987,00.html.58 RFID definition, http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci805987,00.html.59 RFID definition, http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci805987,00.html.60

RFID definition, http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci805987,00.html.61 RFID definition, http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci805987,00.html.62 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).63 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).64 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).65 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).



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There are generally two types of biometrics. Behavioral biometrics measures how a user performs an activity like typing on a keyboard or writing a signature. Physiological biometricsexamines the physical characteristics of an individual. 66

The use of biometric technology is increasing because of its integration into various

devices. Analysts expect that prices will likely continue to drop and the technology will continueto be refined. 67 Biometric features have already been integrated into Hewlett-Packard PDAs,IBM ThinkPads, and other handhelds and laptops as a way of securing devices without requiringusers to remember numerous passwords. 68

In addition, retailers using products like onClick’s DigiPad, which records signatures,have increased the use of biometrics. 69 Although some believe that signing an electronic padresults in a side-by-side comparison of their signatures, “the sensors are actually tracking

behavioral biometrics, recording the speed, pressure, and style of writing rather than the loops ofthe actual signature.” 70

11. 3G Technology

3G technology is an industry standard for third-generation (3G) wireless networks. The3G standard, called International Mobile Telecommunications-2000 (IMT-2000), consists of fiveoperating modes, including three of which are based on Code Division Multiple Access (CDMA)technology. 71 These 3G CDMA modes are most commonly known as CDMA2000, WCDMA(UMTS) and TD-SCDMA. 3G CDMA efficiently provides high quality voice services and high-speed packet data access, and it is the preferred technology for 3G. 72

3G technologies hold much promise and might give cellular-enabled devices an edgeover other wireless technologies. For instance, because a wireless broadband signal can travel

over the same cellular sites as wireless phones, there is no limited range from the cell tower or“hot spot” that must be accessed, as there is for Wi-Fi, meaning users can gain access anywhere

66 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457). “Sometimes, the two can be combined. For example, afingerprint is physiological, but according to Joseph Kim, associate director of consulting at International BiometricGroup, the way that an individual places the finger on a sensor has a behavioral aspect, because of the amount of

pressure.” Id. 67 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).68 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,

(http://www.toptechnews.com/story.xhtml?story_id=38457).69 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).70 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).71 See 3G today website, 3G Technology,http://www.3gtoday.com/wps/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLN4q3dAHJmMUbxBu

b6keiijjCBbz1fT3yc1P1A_QLckMjyh0VFQHjnXaZ/delta/base64xml/L3dJdyEvUUd3QndNQSEvNElVRS82XzJf OUU!?page=home.72 Id.



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they can locate a secure cellular signal. This could potentially provide high speed wirelessInternet access service to customers that are outside of traditional cable modem or DSL areas.

12. Higher Speeds & Mobile Broadband Services

Providers appear to be competing in terms of mobility and speed. For example, Cingularlaunched its High Speed Downlink Packet Access (HSDPA) technology in 16 cities onDecember 6, 2005. 73 Other companies offering technologies to deliver higher speeds and mobile

broadband services include Sprint with its Power Vision(SM) service, 74 and Verizon Wireless,which enables Verizon’s VCast broadband multimedia service. 75 Still other carriers havedeployed networks supporting higher-speeds and new applications, and more investment isoccurring. Merrill Lynch has reported wireless carriers invested $24 billion in 2005. 76

As a result of increased investments by wireless carriers, the role of fixed wireless broadband solutions will also increase. For example, Motorola’s canopy network solutions nowdeliver high-speed data and voice services as an alternative to or an extension of wired solutions

helping carriers reach unserved and underserved residential, business and enterprise markets.This network application also allows companies to penetrate deeper into their customer base andoffer new in-demand revenue enhancing services like VoIP, video, and gaming. 77

C. Data Applications

Wireless or mobile technologies encompass a number of applications beyond voiceservice. These applications may be bundled with the voice service on a cell phone, or they may

be provided with some other standalone wireless device, such as a PDA. Data applications –such as text messaging (or short messaging service (SMS)), e-mail, ringtone, music, and videodownloads, web surfing, and taking digital photos and sharing them – are becoming increasingly

popular. Consider the following:• In June 2006, SMS traffic reached more than 12.5 billion a month, up 71% from

2005. 78

• Worldwide sales of camera phones in 2004 surpassed sales of digital camerasales, 12% of US households have camera phones. 79

73 See http://cingular.mediaroom.com/index.php?s=pageB&item=3 . The sixteen cities include Austin, Texas;Baltimore, Maryland; Boston, Massachusetts; Chicago, Illinois; Dallas, Texas; Houston, Texas; Las Vegas, Nevada;

Phoenix, Arizona; Portland, Oregon; Salt Lake City, Utah; San Diego, California; San Francisco, California; SanJose, California; Seattle, Washington; Tacoma, Washington and Washington D.C.74 See http://www2.sprint.com/mr/news_dtl.do?id=9020 .75 See http://news.vzw.com/pdf/Verizon_Wireless_Press_Kit.pdf .76 Janazzo, David, et al. "US Wireless Services, US Wireless Matrix 3Q 05," Merrill Lynch, November 28, 2005, atTable 30 "Wireless Capital Expenditures."77 http://motorola.canopywireless.com/promo/moveup/ 78 “Business & Technology Trends Driving Voice, Video and Data Services,” Carolyn Brandon, CTIA, June 2005.79 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K. Dane Snowden, CTIA,May 20, 2005.



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• In 2004, U.S. wireless subscribers downloaded approximately 250 millionringtones, in 2005, this figure is expected to increase 60% to 400 million. 80 Worldwide, carriers are exceeding $3 billion in annual ringtone revenues. 81

• As of October 2006, nearly eight million mobile users were generating their own

video content.82

• In May 2005, the wireless industry began offering “Wireless Amber Alerts” tocellular subscribers who opt-in to receive text message alerts with informationabout children abducted in the subscriber’s region. 83

• Sirius and XM, rival satellite radio offerings, have expanded beyond car stereosand into homes, offices, and portable devices. In June 2005, Sirius Satellite Radioagreed to the use of Sprint’s wireless network to offer some music channels toSprint customers later that year. 84 Multiple wireless carriers now offer XMsatellite channels over their network to their subscribers as well.

• Jupiter Research predicts that over the next five years, the wireless gaming marketin North America will “increase tenfold,” becoming a $4.1 billion industry. 85

• Napster and Ericsson have joined forces to develop a wireless version of Napster’s online music service to deliver full-length songs to wireless phones andmake it available to wireless carriers around the world. 86

• Verizon Wireless offers Timecard, an application developed by ECONZ Wirelessthat allows remote employees to clock in and out via their wireless phones andtransmits the information to an employer-accessible password-protected Web

page to assist in payroll preparation. 87

• When drivers in Coral Gables, Florida need to feed parking meters, they can dialinto the automated system via their wireless phones, enter the assigned parkingspace number, and call back on exit to end the billing cycle and have thetransaction billed to their credit card. 88

80 USA Today, June 10, 200581 Michael Finneran, “Wireless Outlook for 2005” Business Communications Review, January 1, 2005; page 2.82

See http://telephia.com/html/documents/Device_ReportVideoCapabilityv4F.pdf83 http://www.ctia.org/industry_topics/topic.cfm/TID/34 . 84 Ellen Sheng, “Sirius to Offer Music On Sprint's Network Of Wireless Phones,” Dow Jones Newswires, June 15,2005; at p. D5.85 “Wireless Gaming Market to See Strong North American Growth,” RCR Wireless News, March 14, 2005.86 John Borland, “Napster, Ericsson join forces for mobile music,” CNET News.Com, June 14, 2005,(http://news.com.com/Napster%2C+Ericsson+join+forces+for+mobile+music/2100-1027_3-5747124.html ). 87 Brian Bergstein, “Clocking in and out far from the office: Phone-based system simple but useful,” AssociatedPress, June 17, 2005.88 “City Lets You Pay Parking Meters With Cell Phones,” Paul Eng, ABC News, June 16, 2005.



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Data applications are becoming increasingly important to the wireless industry as well asto content providers. For example, CTIA – The Wireless Association reports that wireless datarevenues are rising each year, with 70% growth from 2005 to 2006. 89 The Yankee Group projectsthat wireless data applications will account for 13% of the wireless industry’s revenue by 2008, 90 and Kagan Research reported data revenue will grow to 20.9% of total service revenues in

2014.91

Content providers are taking note, and as reported in Forbes.com, “newly inspiredentrepreneurs and entertainment titans alike are in a mad rush to develop songs, graphics, gamesand videos to light up millions of teensy screens.” 92

D. Convergence of Wireless Device Functionality

This section examines the new devices that are being deployed by wireless carriers. Onewebsite, www.phonescoop.com, includes a listing of devices newly offered by service

providers, 93 as well as listings of devices newly authorized by the FCC. 94 The examples given inthis section are not meant to be an exhaustive list of the products available to consumers, butrather illustrative of the high degree of innovation in the wireless device marketplace.

1. Cellular Phones

Dual-mode Wi-Fi phones were introduced in 2006 and are being marketed by several providers. The phone functions like a regular cell phone, but connects to a Wi-Fi hot spot whenindoors. 95 In mid-2006, T-Mobile introduced its “HotSpot@Home” dual-mode, Wi-Fi device inlimited markets. 96 HotSpot@home is based on Unlicensed Mobile Access (UMA) technology,which permits wireless operators to offer familiar GSM services over unlicensed spectrum usingWiFi technology. 97 HotSpot@Home requires a dual mode GSM/WiFi handset and a broadbandconnection. 98 T-Mobile currently offers two sleek handsets and a WiFi access point optimizedfor UMA. 99 However, HotSpot@Home phones are designed to work at any open WiFi access

point.100

Forrester Research has reported that the demand for the “dual-mode” Wi-Fi phonemay be high. 101

Although analysts say TV on mobile phones is at least two years from reaching a massU.S. audience, the technology has already established a presence in Europe and Asia. 102 Telephiareports that more than 2,000 mobile video titles are available to US wireless subscribers. 103

89 “Business & Technology Trends Driving Voice, Video and Data Services,” Carolyn Brandon, CTIA, June 2005.90 “U.S. Consumer Mobile Data Forecast – More Diverse Revenue Streams in 2008,” The Yankee Group, 2004.91 “U.S. Wireless Data Revenue to Total $7.5 Billion in 2005,” Total Telecom, June 10, 2005.92 Erika Brown, “Coming Soon to a Tiny Screen Near You,” Forbes.com, May 23, 2005.93 See http://www.phonescoop.com/phones/new.php?m=c.94

See http://www.phonescoop.com/phones/new.php?m=f.95 Tiernan Ray, “Wi-Fi's Promise May Elude Investors,” Barron’s Online, June 28, 2005.96 Kharif, Olga “T-Mobile’s Trial Balloon,” August 14, 200697 Briefing for Commissioner Philip Jones, “T-Mobile HotSpot@Home, November 27, 200698 Id. 99 Id. 100 Id. 101 Tiernan Ray, “Wi-Fi's Promise May Elude Investors,” Barron’s Online, June 28, 2005.102 Seyfer, Jessie, “Television is coming to cell phones,” The Mercury News, October 3, 2005.103 Telephia, “From’Borat’ to the Discovery Channel – More than 2000 Video Titles are Available on the Third



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Strategy Analytics estimates “that by 2008, more than 150 million people worldwide will bewatching video on their mobile phones, generating about $4.7 billion in annual revenue for thetech industry.” 104

2. Smartphones

“A smartphone is any electronic handheld device that integrates the functionality of amobile phone, personal digital assistant or other information appliance. This is often achieved byadding telephone functions to an existing PDA or putting “smart” capabilities, such as PDAfunctions, into a mobile phone.” 105 The following are some examples of the variety ofSmartphone devices and functions to which consumers have access.

T-Mobile USA and Research In Motion (RIM) announced the availability of the newBlackBerry 7105t together with a new BlackBerry Internet E-mail service for Yahoo e-mailusers. 106 Users of the BlackBerry 7105t will be able to access their Yahoo e-mail accountsdirectly on their BlackBerry handset and will receive real-time delivery of e-mail messages sent

to their Yahoo e-mail accounts. 107

This device is also a quad-band phone and contains Bluetoothtechnology, speakerphone capabilities, wireless e-mail, text messaging, a web browser, instantmessaging, an organizer, and RIM’s SureType technology. 108

The Palm Treo, Palm Inc.’s smart phone has been a popular choice for many mobile professionals. 109 The Palm Treo combines a camera, MP3 player, and an Internet browser. ThePalm Treo 650, 700w, and 700p are all currently available. In addition, Research in Motion hasannounced that it is developing e-mail software that is similar to that of the BlackBerry for thePalm Treo, providing the Treo with even more options.

Hewlett-Packard’s Windows Mobile-based Pocket PC smart phone, the iPaq hw6515, is

equipped with an integrated keyboard, a built-in 1.3-megapixel camera, a Global PositioningSystem receiver, Microsoft Pocket Streets mapping software, 64MB of ROM and 64MB ofRAM. 110 The iPaq hw6515 also includes pocket versions of Microsoft Office programs, makingit easier to view and edit files from the smart phone. 111

Screen,” November 14, 2006.104 Seyfer, Jessie, “Television is coming to cell phones,” The Mercury News, October 3, 2005.105 Smartphone article, http://en.wikipedia.org/wiki/Smartphone . “The key feature of a smartphone is that one caninstall additional applications to the device. The applications can be developed by the manufacturer of the handhelddevice, by the operator or by any other third-party software developer.” Id.106

Zhang, Tong, “T-Mobile and RIM Announce Blackberry 7105t,” MobileTechReview, October 13, 2005; see also “Research In Motion, T-Mobile in pact for Yahoo mail access,” MarketWatch, October 13, 2005.107 Zhang, Tong, “T-Mobile and RIM Announce Blackberry 7105t,” MobileTechReview, October 13, 2005.108 Zhang, Tong, “T-Mobile and RIM Announce Blackberry 7105t,” MobileTechReview, October 13, 2005.109 Martin, James, Mobile Computing: BlackBerry Alternatives, ComputerWorld, January 20, 2006(http://www.computerworld.com/mobiletopics/mobile/story/0,10801,107925,00.html).110 Martin, James, Mobile Computing: BlackBerry Alternatives, ComputerWorld, January 20, 2006(http://www.computerworld.com/mobiletopics/mobile/story/0,10801,107925p2,00.html).111 Martin, James, Mobile Computing: BlackBerry Alternatives, ComputerWorld, January 20, 2006(http://www.computerworld.com/mobiletopics/mobile/story/0,10801,107925p2,00.html).



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Motorola Rokr E1 was the first phone designed to play music downloaded from AppleComputer’s hugely popular iTunes organizer. The phone, which is being sold through CingularWireless, stores up to 100 songs. The Motorola Rokr E1, a bar-style tri-band GSM phone, alsofeatures built-in stereo speakers, a VGA camera with flash, Bluetooth, microSD (TransFlash)memory card slot, speakerphone, and an airplane mode. 112

Samsung’s SGH-E750 and SGH-E760 tri-band handsets follow Samsung’s well-established clamshell design and are equipped with a 1.3 Megapixel camera, a digital compassand gesture recognition for mobile gaming. The Samsung SGH-E750 camera also comes with anintegrated flash, with the SGH-E760 including a “digital power amp” and twin speakers forenhanced audio. In addition, Samsung’s phones can wirelessly stream MP3 music via Bluetoothto the latest Bluetooth stereo headsets, like the SBH100. 113

3. Wireless E-mail Devices

Wireless e-mail devices, including the ubiquitous Blackberry, are increasingly popular

among consumers. According to the Wall Street Journal, “more than 42,000 organizations havea Blackberry e-mail server,” 114 and with the company’s recent addition of 592,000 customers inits last quarter, 3.1 million people now use the hand-held device. 115

The success of the BlackBerry is spurring competition in the wireless e-mail market. Forexample, Good Technology, Inc. is competing against the dominant Blackberry by targetingcorporate customers and making its software product, GoodLink, available on devices other thanthe Blackberry. It is also contracting with Cingular Wireless to aid in distribution. 116 As of

November 10, 2006, Good Technology indicated its software and service is being used by12,000 enterprises worldwide 117 and is reportedly competing with Blackberry’s perceivedweakness of predominantly requiring use of its own devices in order to increase

subscribership.118

4. Pocket PCs/PDAs

Devices such as Pocket PCs and PDAs are increasingly converging with mobiletechnologies. For example, the Palm TX is equipped with an integrated Wi-Fi chip and 100MBof user-accessible flash memory. 119 Flash memory can store data even if the device loses battery

power and utilizes a “312MHz XScale processor from Intel, an expansion card slot that supports

112 Phonescoop website, Motorola ROKR E1, http://www.phonescoop.com/phones/phone.php?p=777.113 Slocombe, Mike, “Samsung GSM Handsets Offer MP3 Wireless Streaming,” Digital-Lifestyles.info, October 12,

2005, (http://digital-lifestyles.info/display_page.asp?section=platforms&id=2666).114 Christopher Rhoads, “GoodLink Sets Sights on Blackberry,” Wall Street Journal Online, May 31, 2005.115 Mark Heinzl, “BlackBerry Maker's Profit Surges,” Wall Street Journal, June 30, 2005; Page B5.116 Christopher Rhoads, “GoodLink Sets Sights on Blackberry,” Wall Street Journal Online, May 31, 2005.117 Motorola To Acquire Good Technology,” Good Technology Press Release, November 10, 2006118 Christopher Rhoads, “GoodLink Sets Sights on Blackberry,” Wall Street Journal Online, May 31, 2005.119 Krazit, Tom, “Palm Unveils Wireless, Color PDAs,” IDG News Service, Wednesday, October 12, 2005,(http://www.pcworld.com/news/article/0,aid,122994,00.asp#).



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Packard’s new Pavilion Media Center m7300n series Photosmart PC will offer Wi-Ficonnectivity. 131

With the application of biometrics technology, some laptop computers are now equippedwith built-in wireless security. IBM has incorporated fingerprint reading capability into its

laptop line.132

In early 2005, the company announced its ThinkPad T43, a new line with a readerthat linked to an embedded security subsystem to provide built-in security. 133 The company notedthat it is investigating ways to integrate biometrics into all of its product lines. 134

6. Bluetooth Devices

Bluetooth devices use wireless technologies to increase the ease of use and theconsumer’s experience with electronic devices. The Bluetooth Media Player Headset is anadapter that sits between headphones and any audio/media player (CD/DVD/MP3) and provideswireless Bluetooth headset functionality. The Bluetooth Media Player Headset enables a user toanswer a call while listening to music by switching to Bluetooth mode. 135

The SONORIX Bluetooth Audio Player OBH-0100 is the first product of its kind in theworld to integrate mobile, wireless and audio technologies into a multi-purpose entertainmentdevice. In addition to the basic profiles, the key profiles supported are A2DP, Headset profileand Handsfree profile. 136

With the Bluetooth Media Center MMV-200 plugged into a user’s stereo, music stored inthe user’s mobile phone can be transferred wirelessly to the loudspeakers. The Bluetooth MediaCenter MMV-200 can also be connected to a TV and beam Mega pixel images and video clipsfrom the user’s mobile phone to the screen. Memory cards (from a phone, PC or digital camera)can be inserted directly into the MMV-200. The consumer’s phone functions as a remotecontrol. 137

The Bluetooth PowBOXTM is a portable wireless communication device built onBluetooth & Audio Entertainment Platform. This integrated device includes the BluetoothHeadset/Handsfree Function, MP3 Player, FM Radio, Voice Recording, Sharing Headset andBluetooth files transfer Memory Storage. It can work alone with all Bluetooth Qualified Productsand is compatible for Windows based computers with the USB interface. 138

131 Kawamoto, Dawn, “HP expands digital-entertainment offerings,” CNET News.com, January 4, 2006.132 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).133 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,

(http://www.toptechnews.com/story.xhtml?story_id=38457).134 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).135 Bluetooth website,http://www.bluetooth.com/Bluetooth/Connect/Products/Product_Details.htm?ProductID=1709.136 Bluetooth website,http://www.bluetooth.com/Bluetooth/Connect/Products/Product_Details.htm?ProductID=1873.137 Bluetooth website,http://www.bluetooth.com/Bluetooth/Connect/Products/Product_Details.htm?ProductID=1913.138 Bluetooth website,



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• Check-in to flights and receive electronic boarding passes.

• Download and play a wide variety of network games.

• Receive up-to-date news, stock prices, and weather information. 149

E-Commerce Times reports that “with improvements in technology and business models,momentum is steadily building” and appears to be favorably anticipated by content providers,wireless carriers, and consumers. 150 Content providers are motivated to explore m-commerce

because it should significantly reduce distribution costs, for example. 151 Wireless carriers alsoare looking for opportunities to add consumer value in a manner that generates additional sourcesof revenue, especially as average revenue per user (ARPU) for voice products continues todecline in the face of increasing competition. 152 Industry data indicates that the average ARPUhas fallen 82% since December 1994. 153

Data indicates that consumers are accustomed to purchasing incremental services on their

wireless phones, and their comfort with such micropayments is expected to spur growth in m-commerce. 154 A survey by ForceNine Consulting and Wirthin Worldwide showed that customershave already exhibited a willingness to pay for the “extras.” Consider that 40% of U.S. adultmobile consumers who use non-voice applications on their phones pay additional charges forsuch services, and given the trends observed in other countries, the opportunities for mobilecontent providers will grow as consumers eventually move from personalization applicationssuch as ringtones to more complex applications such as interactive java games. 155

Handset manufacturers are focusing on the expansion of m-commerce. For example, inMay 2005, NTT DoCoMO, a leading mobile communications operator in Japan, and its eightregional subsidiaries announced five new wireless phone models “equipped for mobile wallet e-

money, ticketing and other handy mobile smart-card functions.”156

Though the underlyingFOMA (freedom of multimedia access) service on this new series of “mobile wallet” handsets iscurrently only available to subscribers in Japan, it is a sign of things to come for other countriessuch as the US that are making strides in the development of m-commerce. 157

III. What “Wireless” Means – Consumer & Economic Interests & Challenges

Wireless technologies have had many positive impacts on consumers and on the socialand economic development of the country as a whole. Part A of this section addresses some of

149 Steve Schone, “The New ‘Anywhere, Anytime’ Sales Channel,” Computer Technology Review, October 1, 2004.150

Howard Buzick, “Near Future of Mobile Content; Handset is Cash Register,” E-Commerce Times, April 4, 2005.151 Howard Buzick, “Near Future of Mobile Content; Handset is Cash Register,” E-Commerce Times, April 4, 2005.152 Howard Buzick, “Near Future of Mobile Content; Handset is Cash Register,” E-Commerce Times, April 4, 2005.153 Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report andAnalysis of Competitive Market Conditions With Respect to Commercial Mobile Services, Tenth Report , (2005), at

p. 59, available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-173A1.pdf.154 Howard Buzick, “Near Future of Mobile Content; Handset is Cash Register,” E-Commerce Times, April 4, 2005.155 Howard Buzick, “Near Future of Mobile Content; Handset is Cash Register,” E-Commerce Times, April 4, 2005.156 “NTT DoCoMo Develops FOMA 901iS ‘Mobile Wallet’ Series,” NTT DoCoMo Press Release, May 17, 2005.157 “NTT DoCoMo Develops FOMA 901iS ‘Mobile Wallet’ Series,” NTT DoCoMo Press Release, May 17, 2005.



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the key consumer and social benefits and challenges implicated by wireless technologies. Part B briefly discusses the impact of the wireless industry on the nation’s economy.

A. Consumer and Societal Interests and Challenges

1. Current FCC Data Regarding Extent of Wireless Industry CompetitionThe FCC’s Eleventh Annual Report and Analysis of Competitive Market Conditions with

Respect to Commercial Mobile Services (Eleventh Report), released September 29, 2006, notedthat, with respect to carrier conduct, competitive pressure continues to drive carriers to introduceinnovative pricing plans and service offerings, and to match the pricing and service innovationsintroduced by rival carriers. 158 The FCC stated, “Consumers continue to pressure carriers tocompete on price and other terms and conditions of service by freely switching providers inresponse to differences in the cost and quality of service.” 159

The FCC report went on to say “[I]ndicators of market performance show thatcompetition continues to yield significant benefits to consumers.” 160 As an example of thewireless market’s competitiveness, consider that there are approximately 183 facilities-basedwireless carriers that serve some portion of the U.S. This includes four national carriers, such asVerizon Wireless, and many more regional and local carriers, and numerous resellers or MobileVirtual Network Operators (MVNOs), such as Virgin Mobile USA. 161 Some 94% of Americanshave a choice of four or more wireless carriers, and approximately 98% can choose from at leastthree. 162

While many consumers have an ability to choose from a number of carriers, competitionamong the carriers continues to grow. 163 The advent of pre-paid cell phones gives consumers theability to avoid long or short-term contracts and related early termination fees with wireless

providers altogether. 164 Additionally, the Eleventh Report concluded that “U.S. consumerscontinue to benefit from robust competition in the CMRS marketplace” with demand increasingfor both voice and data services 165 as mobile carriers “continue to build out their networks andexpand service availability,” including deployment of technologies “that allow them to offermobile Internet access services.” 166

Prices for wireless services have continually declined. In 2004, the average wireless billwas $38.71, a 42.5% decline from the 1993 average bill of $67.31. 167 Many plans no longer

158 10 th Annual CMRS Competition Report, REPORT (FCC 05-173), 9/30/2005159 Id.160 Id. 161 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K.Dane Snowden, CTIA,

May 20, 2005.162 http://hraunfoss.fcc.gov/edocs_public/attachments/FCC-06-142A1.pdf , FCC Annual Report, September 29, 2006163 Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report andAnalysis of Competitive Market Conditions With Respect to Commercial Mobile Services, Tenth Report , (2005), at

p. 77, available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-173A1.pdf.164 Wilson, Dan, “Compare T-Mobile TracFone and Virgin Prepaid Cell Phones and Services,” October 2, 2005,http://www.bestsyndication.com/2005/Dan-WILSON/Whats_NEW/10/100205-prepaid-cell-phones.htm.165 Id . at p. 76.166 Id . at p. 77.167 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K.Dane Snowden, CTIA,



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charge for roaming or long distance. In fact, the FCC reported a 13% decrease in the price perminute in 2003. 168 The Eleventh Report noted that “[e]quity analysts and other industryobservers continue to describe wireless price competition in the United States as intense.” 169

Similarly, the competition resulting from numerous providers and plans has increased

market penetration. In 1993, there were 11 million U.S. wireless subscribers, representing 5%market penetration of the entire US population, but by June 2006, there were 219.4 million U.S.wireless subscribers, representing 72% of the population. 170 It is important to note, “[a]s wireless

penetration among new users begins to slow and the competition to keep existing customerscontinues to accelerate, the likelihood of switching providers among those most dissatisfied withtheir recent retail purchasing experience has increased 46% from 2004.” 171 A slowing

penetration rate means that the wireless industry may become increasingly competitive forretailers as fewer new customers enter the market. 172 In comparison, we should also note thatwireless subscribership is growing faster than, and currently double the number of, Internetsubscribership around the world. 173 According to a study by Kagan Research, there will be 273.8million subscribers in the U.S. by 2014, up 48% from 2004. This demonstrates that the

penetration rate could reach 82.6% if current population forecasts materialize.174

2. Consumer and Societal Benefits

a. Improved Communication

Wireless technologies have improved our ability to communicate and stay in touch withone another in an infinite number of ways. Many of the wireless technologies consumers usetoday to keep in touch with one another are obvious. For example, cell phones allow us tocommunicate with friends, family, neighbors and other members of the community at almost anytime and place. Digital cameras allow us to send pictures to friends and family in a matter of

moments, if not seconds. Email, instant messaging, and text messaging also allow us to makecontact with others in an instant.

May 20, 2005.168 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K.Dane Snowden, CTIA,May 20, 2005.169 Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report andAnalysis of Competitive Market Conditions With Respect to Commercial Mobile Services, Tenth Report , (2005), at

p. 57, available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-173A1.pdf.170 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K.Dane Snowden, CTIA,May 20, 2005.171 “Cell Phone Churn Increasing,” ConsumerAffairs, October 6, 2005,

(http://www.consumeraffairs.com/news04/2005/wireless_churn.html), citing the J.D. Power and Associates 2005Wireless Retail Sales Satisfaction Study. Further, 20 percent of unsatisfied subscribers say they will ‘definitely’ or‘probably’ switch carriers within next 12 months, an increase of 13 percent in 2004; and dissatisfied customers are25 percent less likely to visit the same carrier again and 35 percent less likely to recommend the carrier. Id .172 Id . "The retail stores of wireless carriers face strong competition in the areas of price and promotions fromnational electronic retail outlets such as Best Buy and Radio Shack, which offer wireless service.” Id. quoting KirkParsons, senior director of wireless services at J.D. Power and Associates.173 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K.Dane Snowden, CTIA,May 20, 2005.174 “U.S. Wireless Data Revenue to Total $7.5 Billion in 2005,” Total Telecom, June 10, 2005.



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However, there may be other modes of communication that wireless technology hasmade possible that are not as readily apparent. For example, satellite technology enables localnon-profit groups around the country to participate in various forums or meetings facilitating theexchange of information and ideas. Examples of these wireless-enabled forums are emerging,such as Civic Network Television (CNT), a non-profit organization, which provides the

equipment and support necessary to enable non-profit groups around the country tosimultaneously participate electronically in courses, forums, and/or town meetings. 175 “Theevents take place in Washington, but they are beamed via satellite to conference rooms across thecountry.” 176 The individuals participating in the event from remote viewing sites can observe andcommunicate with the participants in Washington as well as other remote locations. “The resultis a series of conversations on civic and community issues that involve people all across theUnited States.” 177 The topics discussed during these forums include how to mobilize communityassets, how to develop leadership in divided communities, as well as the fundamentals ofcollaborating in small and large communities. 178

b. Education

“E-learning has changed from a technological curiosity to an integral part of rural publicschool education, offering more class options to students and even educating teachers.” 179 Although education via high speed data networks has the potential to revolutionize many typesof learning, its application to educating those located in rural areas is among the most important.One of the goals of distance learning is to bridge the learning gap that exists between publicschools located in rural and urban areas. An examination of the number of school age childrenliving in rural areas reveals its importance. Statistics show that almost one third of this country’s48 million public school students and 43 percent of this country’s public schools are located inrural communities. 180

Today, with the spread of advanced technology, “groups of isolated schools in more thana dozen states–including Minnesota, North Carolina, and Oklahoma–can share qualified teachersin subjects like physics, advanced math, and foreign languages.” 181 Now several states, including

Nebraska, South Dakota, and Iowa, offer teachers and other staff classes toward advanceddegrees or professional certification through distance learning. 182 Students also receiveindividual assistance when needed, despite the physical distance from their instructors.“Instructors offer small early-morning study groups through the videoconferencing system andcontact students on the phone or via e-mail if they seek individual help.” 183

175 “Civic Network Television: Training leaders by satellite,” Benton Organization, December 5, 1996,(http://www.benton.org/publibrary/inventing/civic.html).176 Id .177

Id .178 Id .179 Kingsbury, Alex, “Rural schools around the nation are expanding students' options with E-classes,” U.S. News &World Report, October 18, 2004, (http://www.usnews.com/usnews/edu/elearning/articles/04rural.htm).180 Id .181 Id .182 Id . Schools are also using wireless technology to instruct teachers. “The No Child Left Behind Act establishednew certification standards for teachers and classroom aides by requiring them to be ‘highly qualified in the subjectsthey teach.” This has burdened rural schools, where teachers often have limited access to continuing education. Id .183 Id .



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Distance learning is not, however, only providing assistance in traditional public school

settings. Native American reservations in Montana, for example, are receiving math classes, and people living in the hills of West Virginia are receiving arts and health courses via high speeddata networks. For example, HPWREN, the High Performance Wireless Research and Education

Network, is attempting to help bridge the “digital divide” by delivering high-speed Internetconnectivity to several remote communities in California. 184 HPWREN has most recentlyconnected the Santa Rosa Native American reservation, which is located in southeasternRiverside County. HPWREN’s first wireless link to the Native American community involvedthe Pala Native American Indian reservation, which is home to more than 600 tribal members,including more than 150 children who attend elementary school on the reservation. “By

providing the Pala Learning Center with high-speed Internet access, UCSD has opened up anincredible amount of opportunities for our tribe and its future generations,” said Robert Smith,Pala Tribal Chairman. 185 In addition to the Pala Tribe collaboration, the Rincon and La Jollareservations are now also connected to the HPWREN. 186

c. Rural Consumers

Many remote residences, businesses, communities and communities located in difficultand rugged terrain face heavy challenges in obtaining ubiquitous wireline broadband access.Such areas may be uneconomical to serve with fiber, outside the 3-mile DSL distance limitationor outside the footprint of a cable telecommunications company. Some remote communities stilllack basic phone service. Wireless broadband may be an effective option in these types ofsituations. As USA Today reported, “improved wireless technology has allowed severalthousand mostly small Internet providers across the USA to cheaply deliver broadband to remoteareas via antennas on hilltops, barns and homes.” 187 Indeed, wireless service providers arespending billions of dollars to improve their network coverage, capacity and quality across the

U.S. Wireless providers have invested more than $130 billion in the last six years alone.188

Inaddition, as discussed above, municipalities, including many in rural areas, are increasinglydeploying broadband technologies to provide broadband services to their residents.

As wireless technologies eliminate the need to run physical wires, communityconnectivity to the Internet, or a high-speed backbone network, may be obtained through awireless “back haul” that can cover dozens of miles. In addition, “the minimal costs forconstruction and equipment acquisition, along with the ease of configuration and maintenance,

184 http://hpwren.ucsd.edu/education.html.

185 Id . "We will begin classes to teach both the older and younger generations of our tribe - so that they can become

more familiar with the many opportunities available to them through the Internet." Id .186 Id . “Not only are Pala, La Jolla, and Rincon tribal members benefiting from high-speed Internet connectivity, butsoon all 18 San Diego County reservations will have a network connection - thanks to the recently formed SouthernCalifornia Tribal Chairmen's Association (SCTCA) Tribal Digital Village Network (TDVNet), which is funded byHewlett Packard.” Id .187 Paul Davidson, Inventive Wireless Providers Go Rural , USA Today, ( July 14, 2004).188 As of June 2006, there was total capital investment greater than $209.3 billion when summing cumulative andincremental capital investment. As of June 2000, total cumulative capital investment was 76.6 billion. Therefore,

between the June 2000 and June 2006 period, capital investment equaled approximately $132.7 billion. Dr. RobertRoche. “Wireless Industry Indices Report: Mid-Year 2006,” November 2006 at www.ctia.org



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Mobile Captioning System

A mobile captioning system developed at the Georgia Tech Research Institute useswireless technology to provide captioning for the approximately 10% of Americans who are deafor hard of hearing. At numerous venues, information is presented audibly to the public.

Simultaneously, the captions are transmitted to a receiver device such as the individual’s PDA orlaptop using Wi-Fi technology, which is already installed, in numerous public places whereevents such as government meetings or sporting events are typically held. The technology alsohas uses for hearing individuals, such as for transmitting statistics at a baseball game or fortranslating foreign languages into English. 194

TTY Services

Many wireless providers are seeking to support the deaf community by making “TTY”available on mobile phones. 195 TTY, also known as teletypewriter and as Text Telephone Deviceor Telecommunication Device for the Deaf (TDD), enables people who are deaf, hard of hearing,

or speech-impaired to use the telephone to communicate.196

TTY services require a specialdevice at both ends of the conversation and work by allowing people to type messages back andforth to one another instead of talking and listening. 197 When a TTY device is used inconjunction with a TTY-compatible wireless phone, customers with speech and hearingdisabilities can communicate wirelessly. 198

For example, T-mobile and Cingular both offer a wide selection of phones that are TTYcompatible. 199 In addition to providing TTY services, both the SideKick and the Blackberry

provide relay service online, and AOL Instant Messaging (AIM) also permits persons withhearing disabilities to communicate. The benefits of such services to the hearing disabledcommunity are immeasurable. In the context of 9-1-1, a TTY compatible mobile phone allowsan individual to communicate on his or her own TTY with TTYs located at the Public SafetyAnswering Point when calling emergency services. 200

TTY Compatible Devices

T-Mobile’s SideKick, a popular device, is common among the hearing impaired becausethe device is equipped with screens that are capable of showing more detail than a standard cell

phone, and the device also allows both instant messaging and Web surfing. 201 Other PDA typedevices such as PocketPC, Palm, Treo and Nokia are providing similar services. However,

194 Jane M. Sanders, “Virtual Voices,” Research Horizons, Winter 2005.195

“TTY Compatible Phones,” http://www.cingular.com/about/tty ; see also “T-Mobile Accessibility Information,”http://www.t-mobile.com/company/about/ttypolicy.asp.196 “T-Mobile Accessibility Information,” http://www.t-mobile.com/company/about/ttypolicy.asp.197 Id. 198 “TTY Compatible Phones,” http://www.cingular.com/about/tty.199 “TTY Compatible Phones,” http://www.cingular.com/about/tty ; “T-Mobile Accessibility Information,”http://www.t-mobile.com/company/about/ttypolicy.asp.200 www.t-mobile.com 201 Fortt, Jon, “Sidekick, other devices benefit the deaf,” San Jose Mercury News, May 8, 2003,(http://www.deaftoday.com/news/archives/002220.html ).



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States with programs for the deaf and disabled community typically limit universal service helpto telecommunications services and do not allow text pagers. California is a State that hasreleased a rulemaking considering whether text pagers might be allowed for deaf and disabledconsumers who desire it.

Relay Services

Many TTY users can employ a process called “relay.” 202 The relay process utilizes anoperator to translate text in order to have a phone conversation with a hearing person. 203 Personswith hearing disabilities can now access the Internet and make free operator-assisted phone callsfrom Web sites such as www.sprintrelayonline.com. 204

Sprint Relay Wireless, powered by GoAmerica, is available as an addition to the T-Mobile Sidekick and provides access to relay services. 205 Sprint Relay Wireless was designed forthe T-Mobile Sidekick and allows hearing impaired persons to utilize relay services from amobile phone, obviating the need for a computer. 206 MCI Wireless IP-Relay.com offers similar

relay services.207

Sprint Relay Wireless enables wireless users to connect to online relay services from

virtually anywhere using a choice of wireless handheld devices, including the RIM 957, 950,850, 857, and SideKick. 208 With Sprint Relay Online, calls may be placed from any Internetconnection, and there is no need for traditional TTY equipment. Sprint Relay Online is a freeservice that combines traditional relay service with the ease of the Internet allowing disabledindividuals to communicate on the go. 209

Video Relay

Video relay involves the use of a computer and a video camera connected to the Internetto make telephone calls. 210 The hearing disabled caller uses sign language to communicate withan operator through the Web-cam; the operator then translates to the hearing person on the otherend of the call. 211 The operator then translates the hearing person’s response into signlanguage. 212 Video relay allows people to communicate at a much faster speed and is a muchsmoother mode of communication. 213

202 Id .203 Id. 204 Id.205 http://www.wyndtell.com/relay/getSRW.php 206

http://www.wyndtell.com/relay/getSRW.php 207 Kuchinskas, Susan, “Hiptop2 Device Honed for Deaf Market,” internetnews.com, September 16, 2004,(http://www.internetnews.com/wireless/article.php/3408591).208 www.sprint.com/business/products/sections/relayServices.jsp.209 www.sprint.com/business/products/sections/relayServices.jsp.210 Fortt, Jon, “Sidekick, other devices benefit the deaf,” San Jose Mercury News, May 8, 2003,(http://www.deaftoday.com/news/archives/002220.html ).211 Id. 212 Id.213 Id.



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Sprint Video Relay Service (Sprint VRS) is powered by Communication Services for theDeaf (CSD) and enables American Sign Language (ASL) users to communicate using facialexpressions and body language cues. Through the use of full-motion video, words and phrasesare conveyed along with facial expressions and body language cues to ensure that nothing getslost in translation. 214 “People who are deaf, hard of hearing, deaf-blind, or have a speech

disability enrich their independent lives by utilizing relay services.” 215

Such services utilizeTTY/TDD devices and allow the disabled individual to communicate with friends, family, business associates, and service providers so they may participate in daily community life. 216 “Both parties either see or hear every word uttered in the conversation.” 217

Relay Conference Captioning

Sprint Relay Conference Captioning (RCC) is a service provided by Sprint that combinesreal-time captioning and voice relay service to provide conference calls for deaf and hard-of-hearing people. RCC services can be accessed from any Internet-connected computer and allowsthe hearing impaired person to receive real-time text of the conversation. A captioner will speak

a typed response to the other participants in the conference call. Such services are important tothe hearing impaired community as the number of conference calls increase as a result moreworkers relying on teleconferencing as a normal course of business. 218

Assistance for the Visually Disabled

The combination of TALKS by Cingular Wireless and the Nokia 6620 offers newassistance and accessibility to individuals with visual disabilities. 219 TALKS by CingularWireless is essentially a speech-enabling software that basically transforms the Nokia 6620cellular handset into a “talking mobile phone.” 220 The TALKS/ Nokia 6620 combination willallow persons visual disabilities to, inter alia , hear incoming Caller ID, know the phone’s signaland battery strength, text message and email, compose and access multi-media messages(MMS). 221

In addition, the Owasys 22C, a cellular telephone developed specifically for the visuallyimpaired, enables individuals to place and receive telephone calls using a speaking interface. 222 The Owasys 22C has omitted the screen altogether and instead includes widely spaced buttonson its keypad. 223 With the Owasys 22C every function speaks, including the caller ID, batteryand signal strength, phonebook, call logs, and configuration menus. 224 It is also equipped with aspeaker phone that only the operator of the phone can turn on. 225 This feature provides privacy

214 www.sprint.com/business/products/sections/relayServices.jsp.215 www.sprint.com/business/products/sections/relayServices.jsp.216

www.sprint.com/business/products/sections/relayServices.jsp.217 www.sprint.com/business/products/sections/relayServices.jsp.218 www.sprint.com/business/products/sections/relayServices.jsp.219 TALKS by Cingular Wireless and the Nokia 6620; http://www.cingular.com/about/talks_program.220 Id.221 Id.222 Owasys Wireless Devices, http://www.screenlessphone.com.223 Owasys Wireless Devices, http://www.screenlessphone.com.224 Owasys Wireless Devices, http://www.screenlessphone.com.225 Owasys Wireless Devices, http://www.screenlessphone.com.



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and ensures that caller information will not be spoken aloud unless the loudspeaker is turnedon.226

f. Improved Healthcare – Telemedicine

Wireless technologies also have a number of applications in the health-care arena. Non-voice wireless technologies may be employed in the health sector, for example, to analyze patients remotely, to perform mobile medical examinations, and to outfit patients with wirelessmedical monitoring devices. 227 In addition, activities of those confined to wheel chairs can bemonitored with wireless devices that record how individuals shift their weight, and thisinformation may be used to promote healthy skin. 228

Wireless medical record systems, especially those utilizing Wi-Fi technology, allowmedical staff to access and update records and make orders at the point of care. 229 Such actionsreduce errors and delays, improve efficiency and fit into the medical staff’s workflow. 230 Some

physicians even believe that using mobile technology to access medical records will increase the

amount of time they are able to spend with patients.231

It is imperative that medical records beavailable anytime and anywhere and wireless medical systems make this possible. 232

Such wireless medical record systems typically consist of wireless laptops (Wi-Fi access points) set up on carts in patient wards, treatment facilities and patient corridors. The carts canthen be rolled from bed to bed and ward to ward as necessary. Wireless tablets and sometimesPDA’s often supplement these laptops, either to provide staff with a dedicated device or for usein other medical activities. 233

“Wireless medical record systems are also inexpensive to deploy, costing a few percentof the total budget of an electronic medical records (EMR) system.” 234 Ohio State University(OSU) Medical Center, a teaching hospital in Columbus, Ohio; St. Vincent’s Hospital inBirmingham, Alabama; Memorial Medical Center in Springfield, Illinois, and St. John’s Hospitalin Springfield, Illinois have all deployed wireless medical records systems. 235

226 Owasys Wireless Devices, http://www.screenlessphone.com.227 “Business & Technology Trends Driving Voice, Video and Data Services,” Carolyn Brandon, CTIA, June 2005.228 John Peifer, “Rehabilitation Engineering Research Center on Mobile Wireless Technologies for Persons withDisabilities,” CTIA 2005 Wireless Accessibility Workshop.229 Gruman, Galen, “Wireless: Just what the doctor ordered,” CIO Magazine, August 1, 2003,(http://www.cio.com/archive/080103/mobile.html).230 Gruman, Galen, “Wireless: Just what the doctor ordered,” CIO Magazine, August 1, 2003,(http://www.cio.com/archive/080103/mobile.html).231

Gruman, Galen, “Wireless: Just what the doctor ordered,” CIO Magazine, August 1, 2003,(http://www.cio.com/archive/080103/mobile.html).232 Gruman, Galen, “Wireless: Just what the doctor ordered,” CIO Magazine, August 1, 2003,(http://www.cio.com/archive/080103/mobile.html).233 Gruman, Galen, “Wireless: Just what the doctor ordered,” CIO Magazine, August 1, 2003,(http://www.cio.com/archive/080103/mobile.html).234 Gruman, Galen, “Wireless: Just what the doctor ordered,” CIO Magazine, August 1, 2003,(http://www.cio.com/archive/080103/mobile.html).235 Gruman, Galen, “Wireless: Just what the doctor ordered,” CIO Magazine, August 1, 2003,(http://www.cio.com/archive/080103/mobile.html).



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An emergency management communications system has been developed by GlobalstarLLC for this purpose. 244 Globalstar’s emergency management communications system(GEMCOM) consists “of a satellite backhaul network mated to a miniaturized cellular systemthat allows first responders to communicate with each other, or connect to the public telephonenetwork via Globalstar. 245 Globalstar satellite phones are built into the portable unit and give

emergency workers access to critical information when land-based communications areunavailable, such as during and after a disaster and in remote locations.” 246

GEMCOMS utilizes standard cell phones and provides emergency workers with theability to place calls to numbers available on the public telephone network via Globalstar. 247 Emergency workers will also have the ability to call other emergency workers within anapproximate half-mile radius. In addition, traditional wireline telephones can be connected toGEMCOMS through standard telephone jacks. 248 A spokesperson for the NationalCommunications System said that the GEMCOM “units are definitely needed . . . We receivedthe unit 12 hours in advance of Hurricane Rita. Fortunately, damage from Rita was minimal, andwe have deployed the GEMCOMS to St. Bernard parish which was hardest hit in NewOrleans.” 249

h. National Security

Wireless technology has become increasingly important to National Security strategicinitiatives. In fact, wireless technologies are currently being used in the field of biometrics, forfacial and iris recognition programs, and for transmitting real time video from crime databasesonto a wireless device for remote access. 250

The Federal Bureau of Investigation (FBI) has said that national crime rates are decliningand “telematics played a large role in curtailing the tide of previous years.” 251 FBI agents usemobile “briefcases” that contain “mobile computing capabilities, including laptops, GPScapability, and wireless communication devices.” 252 “Fast dissemination of information to

244 “Globalstar Develops Wireless Emergency Management Communications System,” Telematics Journal, October7, 2005, (http://www.telematicsjournal.com/content/topstories/938.html).245 “Globalstar Develops Wireless Emergency Management Communications System,” Telematics Journal, October7, 2005, (http://www.telematicsjournal.com/content/topstories/938.html).246 “Globalstar Develops Wireless Emergency Management Communications System,” Telematics Journal, October7, 2005, (http://www.telematicsjournal.com/content/topstories/938.html).247 “Globalstar Develops Wireless Emergency Management Communications System,” Telematics Journal, October7, 2005, (http://www.telematicsjournal.com/content/topstories/938.html).248 “Globalstar Develops Wireless Emergency Management Communications System,” Telematics Journal, October

7, 2005, (http://www.telematicsjournal.com/content/topstories/938.html).249 “Globalstar Develops Wireless Emergency Management Communications System,” Telematics Journal, October7, 2005, (http://www.telematicsjournal.com/content/topstories/938.html).250 “Business & Technology Trends Driving Voice, Video and Data Services,” Carolyn Brandon, CTIA, June 2005.251 “FBI Says Automotive Telematics Vital Tool,” Telematics Journal, October 19, 2005,(http://www.telematicsjournal.com/content/topstories/966.html).252 “FBI Says Automotive Telematics Vital Tool,” Telematics Journal, October 19, 2005,(http://www.telematicsjournal.com/content/topstories/966.html ). “Although some capabilities are mounted tovehicles, the FBI prefers the briefcase setup as it allows maximum flexibility use in any vehicle or anywhere in thefield.” Id .



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agents on the street, and with State and municipal law enforcement and first responders is criticalin stopping crime and frustrating terrorists.” 253

i. Personal Security

Wireless technology, such as cellular technology, has become central to personal security.Cellular phones allow people to call for help in any number of emergencies where wirelinetelephones are not available.

Recently, the wireless industry partnered with the National Center for Missing &Exploited Children in order to make Amber Alert text messages available to wireless subscribersthat opt in to receive the geographically specific Wireless Amber Alerts. 254 The hoursimmediately following the abduction of a child are critical to the child’s successful recovery.Wireless AMBER Alerts will be an invaluable tool in the search process by quickly distributingthe emergency information to a large number of people. Since more than 60 percent ofAmericans own a wireless phone, Wireless Amber Alerts will increase the reach of the Amber

Alert program.255

As another example, OnStar is the leading provider of telematics services in the U.S. and

currently has more than two million subscribers. 256 OnStar’s in-vehicle safety, security, andinformation services use GPS satellite and cellular technology to link the vehicle and driver tothe OnStar Center. 257 The OnStar in-vehicle safety and security system provides many servicesto help protect drivers on the road. 258 Such services include automatic notification of airbagdeployment, remote door unlock, emergency services, stolen vehicle assistance roadsideassistance and accident assistance. 259 While the OnStar center can communicate directly with thedriver in the event of an emergency, it is also capable of pinpointing the location of the car andcan dispatch local emergency units to assist.

j. Anti-theft Measures

Specific wireless technologies are being used to prevent theft and ensure personalsecurity. For example, LoJack is a vehicle recovery system that allows police to track andrecover stolen vehicles. 260 LoJack operates based on wireless radio frequency technology via aunit that is hidden in the vehicle by a certified technician and registered in the LoJack database.When the vehicle is reported stolen, police computers send a silent radio signal to the vehicle,

253 “FBI Says Automotive Telematics Vital Tool,” Telematics Journal, October 19, 2005,

(http://www.telematicsjournal.com/content/topstories/966.html ). “Although some capabilities are mounted to vehicles, theFBI prefers the briefcase setup as it allows maximum flexibility use in any vehicle or anywhere in the field.” Id .254 CTIA Website, Industry Topics – Wireless Amber Alerts, http://www.ctia.org/industry_topics/topic.cfm/TID/34.255 CTIA Website, Industry Topics – Wireless Amber Alerts, http://www.ctia.org/industry_topics/topic.cfm/TID/34.256 OnStar website, OnStar Explained, http://www.onstar.com/us_english/jsp/explore/onstar_basics/technology.jsp.257 OnStar website, OnStar Explained, http://www.onstar.com/us_english/jsp/explore/onstar_basics/technology.jsp.258 OnStar website, OnStar Explained, http://www.onstar.com/us_english/jsp/explore/index.jsp.259 OnStar website, OnStar Explained, http://www.onstar.com/us_english/jsp/explore/onstar_basics/services.jsp.260 Stolen Vehicle Recovery System, http://www.lojack.com/what/stolen-vehicle-recovery-system.cfm.



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automatically activating the LoJack transmitter hidden in your vehicle. Police can track thesilent signal from the LoJack device from the ground or the air. 261

In addition, biometric features are being integrated into Hewlett-Packard PDAs, IBMThinkPads, and other handhelds and laptops as a way of securing devices without requiring users

to remember numerous passwords.262

The retail industry is also utilizing biometrics to preventtheft. Retailers are using products like onClick’s DigiPad, which records signatures and tracks behavioral biometrics, recording the speed, pressure, and style of writing rather than the loops ofthe actual signature. 263

B. Economic Interests

The wireless industry represents a key component of the nation’s economy. A recentstudy estimates that 3.6 million jobs in the US are directly or indirectly dependent on the U.S.wireless telecommunications industry. 264 The study found that the wireless industry generatedapproximately $118 billion in revenues in 2004 265 and contributed $92 billion to the U.S. Gross

Domestic Product (GDP) in 2004.266

During the same period, the study showed that the wirelessindustry paid approximately $63 billion in fees, taxes and levies to federal, State and localgovernments, 267 and the use and availability of wireless telecom services and products created anapproximately $157 billion customer surplus in 2004. 268

The impact of the wireless sector on our economy can be understood from a number of perspectives. Consider the following:

• Of the $118 billion spent on wireless products and services in 2004 by U.S. businesses and consumers, approximately $104.4 billion was spent on wirelesstelecommunications services. 269

• Wireless carriers have invested approximately $200 billion nationwide. Even aswireless prices and average revenue per user (ARPU) are decreasing, the wirelessindustry continues to invest heavily in its network. 270

261 Id .262 Millard, Elizabeth, “Biometrics for the Masses,” Top Tech News, October 17, 2005,(http://www.toptechnews.com/story.xhtml?story_id=38457).263 Id .264

“Impact of the US wireless telecom industry on the US economy,” David Lewin and Roger Entner, Ovum,September 2005, at p. 6.265 Id . at p. 5.266 Id . at p. 10.267 Id . at p. 6.268 Id . at p. 6-7. “Customer Surplus” is determined by calculating the difference between what end-users are willingto pay for a service and what they are actually paying for it.269 Id . at p. 5.270 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K.Dane Snowden, CTIA,May 20, 2005.



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• CMRS-related patents in the U.S. increased from 876 in 1996 to a record high of2,390 in 2003 (not including unlicensed wireless, Wi-Fi, or UWB patents, whichare also on the rise). 271

• Wireless devices allow those traveling to remain in constant contact with

customer, clients and co-workers thereby reducing unproductive travel.272

Wireless devices also result in improvements in logistics, 273 faster and moreefficient decision-making, 274 and expansion of small business enterprises. 275

• Healthcare efficiency has similarly enhanced from wireless devices. Healthcare providers are able to reduce the amount of call-backs due to illegible notes and prescriptions by directly inputting patient information into a wireless handheldcomputer. An estimated 616,000 healthcare professional are already usingwireless technology, which is saving in excess of $2.9 billion. 276

Over the next decade, it is anticipated that the wireless telecommunications industry will

generate an additional $700 billion in consumer surplus as volumes of use grow and pricesdecline and productivity gains will generate over $600 billion in additional GDP. 277 Further, theuse and supply of services and handsets is expected to generate over $450 billion in additionalGDP and create 2-3 million additional jobs. 278

Today, phones and plans commonly include innovative digital services, such as e-mail,calendar, Internet access, and text message functionality. By mid-2006, the wireless industryhad achieved 190 million digital subscribers, 279 and today, they have surpassed 97% digitalnetworks and achieved data rates up to 500 kbps. 280 Just 10 years ago, service was

predominantly analog, Internet access was limited, and data rates were 4.8kpbs. 281 As discussed previously, wireless carriers are also increasingly investing in wireless broadband technologies to

expand consumers’ ability to stay connected (without a physical connection) and use moreadvanced mobile applications.

271 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K.Dane Snowden, CTIA,May 20, 2005; see also Roche, Robert F., Ph.D., “What’s Up With Wireless? Camp NARUC Michigan StateUniversity,” CTIA, August 11, 2005, at Table “Licensed Wireless-Related Patents, 1973-2003.”.272 Id . at p. 19.273 Id .274 Id . at p. 20.275

Id .276 Id .277 Id . at p. 7.278 Id .279 “Innovation: The Keystone of the Commercial Mobile Wireless Experience,” CTIA Presentation to FCC, April2004, ( http://files.ctia.org/pdf/CMRSINNOVATIONmar04.pdf ).280 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K.Dane Snowden, CTIA,May 20, 2005.281 “Expanding the Wireless Frontier: Shaping New Jersey’s Telecommunications Future,” K.Dane Snowden, CTIA,May 20, 2005.



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C. Wireless Challenges

The Council of Better Business Bureaus (CBBB) began tracking cell phone complaints in

1997. Between 2001 and 2002 cell phone carriers complaints jumped 263 percent to the top of themost-complained about business. In 2003, it dropped only slightly to number two and in 2004 and2005 regained the number one position. In 2004 the CBBB analyzed complaints and determinedthat they fell into three categories: (1) complaints about billing; (2) complaints about the quality ofcustomer service; and (3) complaints about misrepresentation or miscommunication by sales orcustomer service personnel. While the increase was acknowledged to be, in part, attributable to thegrowth in popularity, the CBBB thought the pattern was unusual, even for a new industry, andwarranted a more in-depth analysis. 282 It should be noted, however, that these figures might bemisleading if they are not put into context. The CBBB divides most industries (other thanwireless) into multiple categories. For example, if the four separate categories used for the “cardealer” industry were summed into a single category, as is done for wireless, complaints in that

category would exceed wireless-related complaints – and the settlement rate for those complaintswould be lower than the wireless industry’s 89% settlement rate. If the credit and financecategories were summed, their complaints would be 68% more than those related to the wirelessindustry. Likewise, home improvement and housing-related complaints would be practicallydouble those related to wireless.

Complaints at the FCC grew to 25,852 in 2005, but seemed to be dropping, as only 8,666complaints were received by the FCC in the first half of 2006 283 which represented a decrease of39% from the first half of 2005. More than half were billing and rate-related. 284 Some analystshave posited that the large number of cell phone billing complaints may be partially attributableto a common practice in which consumers agree to long-term contracts in order to receive

discounted or free wireless phones at the point of sale. Because these contracts may includeearly cancellation penalties ranging up to $200 or more, consumers find it difficult and costly toswitch service. 285

In recent years, in response to the significant increase in consumer complaints aboutservice and billing, states have begun to exercise their authority to regulate cell phone carriers.Significant positive changes in the industry have resulted from these State actions andcommitment to the issue. Some examples are listed below:

1. Voluntary Consumer Code

Following a NARUC resolution adopting wireless best practices in July 2003, CTIA’sVoluntary Consumer Code was adopted that September. The resolution was developed by

282 Better Business Bureau Analysis of Cell Phone Complaints Reveals Root Causes of Customer Dissatisfaction,issued May 4, 2004.283 Federal Communications Commission, Consumer & Governmental Affairs Bureau, Quarterly Inquiries andComplaints Reports284 Id .285 Cell Phone Service Bills, Long-Term Contracts, and Complaints, Christopher A. Baker, AARP Policy Institute,June 2006.



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NARUC in cooperation with the FCC and the industry and adopted in lieu of a resolutionsupporting regulation of wireless service quality. The three-year old Code is designed toencourage greater wireless carrier communication and disclosure to consumers on a voluntary

basis. According to the CTIA website, 33 carriers, including all of the national carriers, haveadopted the Code and, in order to use CTIA’s Seal of Wireless Quality/Consumer Information in

their marketing materials, carriers’ compliance with the code must be demonstrated andrecertified annually. 286 These carriers cover 93% of all wireless subscribers.

Among other requirements, the Code requires carriers to “Disclose Rates and Terms ofService to Consumer” and to include disclosure of “the amount or range of any . . . fees orsurcharges that are collected and retained by the carrier.” Commitment Six requires adoptingcarriers to “Separately Identify Carrier Charges From Taxes On Billing Statements.” 287

The Code has been a positive step in customer service and demonstrates the stateswillingness to work with the industry and apply a light regulatory touch. Cell phone carriers donot have to agree to follow the Code but the FCC requires carriers to adhere to the Code as a

condition for wireless ETC designation. For those that agree to adhere, penalties for non-compliance are minimal.

2. Assurance of Voluntary Compliance

In July 2004, State Attorneys General from Alabama, Arkansas, Colorado, Delaware,Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan,Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, NorthCarolina, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Virginia,Wisconsin, and Wyoming entered into an Assurance of Voluntary Compliance with CingularWireless LLC, Sprint Spectrum L.P. and Verizon Wireless, and to settle inquiries involvingallegations that representations made by each carrier violated the consumer protection and trade

practices statues in each of the respective states.

The Attorneys General accepted terms of assurance including agreements for disclosureof material rates and terms during a sales transaction, coverage, cancellation periods for wirelessservice, advertising, disclosures of taxes and surcharges on consumer bills, consumer inquiriesand complaints, and compliance procedures.

3. Cooperative Agreements

Several States have established cooperative agreements with wireless companies to addressconsumer issues and complaints. Such arrangements typically provide a channel ofcommunication for states to work with wireless providers to handle specific constituent complaintmatters.

286 Truth-in-Billing Format , First Report and Order and Further Notice of Proposed Rulemaking, CC Docket No. 98-170, ¶58.287 For the complete list of the 33 wireless carriers that have adopted the CTIA Consumer Code, please see:http://www.ctia.org/wireless_consumers/consumer_code/index.cfm



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4. State Actions

States have attempted a variety of approaches to address perceived concerns with regardto the wireless industry. Often times the actions have been instigated through the Statelegislative process. For example, in 2004, Minnesota enacted the Wireless Consumer Protection

Act (Act).288

The Act requires wireless telephone carriers doing business in Minnesota to: (1)give consumers notice prior to making a proposed material change in their contract and (2)obtain consumers’ affirmative consent to the change. 289 The Act was intended to ensure thatwireless customers were given notice of and the opportunity to consent to substantives changesin their wireless contracts. Shortly after enactment the wireless industry successfully filed alawsuit seeking to invalidate it. 290

Sometimes, the action has taken place at the regulatory or administrative level. Forexample, the California PUC (CPUC) adopted a new Consumer Protection Initiative decision inMarch 2006. In adopting this decision, the CPUC focused on its two core competencies: (1)consumer education on the changing competitive marketplace and (2) enforcement of consumer

protection laws and rules. The decision created a new CPUC-led telecommunications consumereducation program (see www.calphoneinfo.com) that will provide information in 12 languages toreach out to California consumers. The CPUC's education content includes discussion ofconsumers’ rights and freedom of choice principles plus specific information on how to avoid

being a victim of consumer fraud (e.g. slamming and cramming). The website also informsconsumers where to report complaints and fraud clearly. The consumer education initiativelaunched in late June 2006, and over 8,300 hits to the CalPhoneInfo.com website were recordedon the first day alone. In this consumer education initiative, the CPUC has partnered with the

phone carriers, dozens of community-based organizations, and consumer groups to draft thecontent of the educational materials collaboratively. In addition to the website, this group isvoluntarily distributing the consumer educational information through brochures, posters, publicservice announcements, bill inserts, free text messages, and other media outreach efforts.

The March 2006 decision also enhanced the CPUC’s ability to enforce laws and rules in atimely and effective manner by creating a special Telecommunications Consumer Fraud Unit;expanding its toll-free hotline to cover allegations of fraud; and increasing cooperation withother law enforcement agencies such as the Attorney General and District Attorneys. In order toensure that the needs of non-English speaking populations in particular are protected, thedecision further directed CPUC staff to draft a report on in-language practices and any special

problems faced by consumers with limited English proficiency. Four statewide public participation hearings and two workshops were held with the report received in October 2006.An Order Instituting Rulemaking and proposed rules as to in language practices involvingtelecommunications (both wireline and wireless telecommunications services) was issued onJanuary 14, 2007.

The CPUC decision also adopted strengthened cramming rules, which apply to allcharges (whether communications or non-communications charges) placed on a consumer’s

288 2004 M INN . LAWS 261, ART . 5.289 Id. 290 Cellco Partnership, et al. v. Hatch, (Eighth Circuit No. 04-3198, District Court. No. 04-2981).



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phone bill by any company. These cramming rules provide that a phone company cannot bill acustomer for any unauthorized charge, even if the phone company did not originate the disputedcharge. These rules further state that a customer cannot be required to pay a disputed charge orassociated late charge while the phone company is investigating a complaint. According to therules, any such investigation regarding an unauthorized charge should be completed within 30

days of receipt of a customer complaint. Other rules – addressing investigatory efforts of CPUCstaff, worker identification, and Emergency 911 access – were broadened in order to extend towireless carriers. 291

5. Court Decisions

Thousands of wireless customers in 2000-2002 were knowingly sold wireless phones inareas where there was no service coverage and then were told contracts could not be cancelledwithout paying between $150 and $400 in early termination fees. A California court upheld theState’s action against a wireless company, even though the company claimed the State had no

jurisdiction under “terms and conditions” to assist these customers. 292 The 2003 CTIA Consumer

Code provides consumers the right to see coverage maps.As a result of State enforcement measures and actions coupled with competitive pressures

and advancing technology, there is evidence that the situation is improving. According to theJ.D. Power and Associates 2004 U.S. Wireless Regional Customer Satisfaction Index Study,overall satisfaction with wireless service providers has increased five percent over 2003. 293 TheFCC has also noted a decline in wireless complaints.

The FCC’s Truth In Billing Orders have touched upon the issue of State’s jurisdictionover wireless consumer issues while dealing with the broader issues regarding billing formattingand surcharges applied by all carriers. The FCC’s Truth In Billing Order (CC Docket No. 98-170/CG Docket No. 04-208, Released March 18, 2005) removed the exemption for CMRScarriers requiring that billing descriptions are brief, clear, non-misleading and in plain language,

but declined to prohibit non-government authorized surcharges, also known as discretionarysurcharges. In the case of wireless carriers, the FCC specifically prohibited States fromregulating or prohibiting line items or surcharges. However, in a decision released on July 31,2006, a three-judge panel of the U.S. Court of Appeals for the 11 th Circuit (Atlanta) ruled that theFCC exceeded its statutory authority when it preempted states from requiring or prohibiting theuse of line items on wireless bills. The unanimous ruling by a three-judge panel means that theGeorgia Public Service Commission and similar commissions around the country can enforcelaws limiting what wireless providers can put on their bills. 294

291 Questions on this initiative may be directed to President Michael Peevey, Commissioner Rachelle Chong orCommissioner John Bohn.292 Pacific Bell v. PUC, issued June 20, 2006.293 J.D. Power and Associates Reports Satisfaction With Wireless Service Providers Increases Significantly asCustomers Report Higher Ratings in Call Quality and Cost-Related Attributes , Press Release, J.D. Power andAssociates, Sept. 9, 2004 (“ J.D. Power and Associates Wireless Customer Satisfaction Study ”).294 11 th Circuit Decides FCC Was Wrong About Cell Phone Bills, Alyson M. Pulmer, Fulton County DailyReporter, August 15, 2006.



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6. Conclusion

Mobile communications devices are clearly a product that consumers desire. Theindustry’s phenomenal growth is a testament to this, as is its high degree of competition in manymarkets. In fact, it should be noted that many of the “complaints” that State officials hear

regarding the wireless industry are actually pleas for more service in hard to serve areas.

At the same time, there is little doubt that the exploding popularity of wirelesscommunications has created growing pains. There are legitimate and real consumer complaintsregarding certain consumer marketing, billing and other industry practices. States haveaddressed these concerns in a number of ways. The next section will discuss possible models forfuture State actions as well as a proposed framework for an ongoing dialogue with the wirelessindustry over these matters.

IV. What “Wireless” Means: Select Current Policy Issues

A. Consumer Protection Issues

Under the federal Communications Act, States currently have the authority to regulate the“terms and conditions” of wireless service and are preempted from regulating the rates andmarket entry of wireless carriers (Section 332(c)(3), an amendment approved in 1993 as part ofthe Omnibus Budget Reconciliation). This amendment clarified in federal law that States haveno authority over the regulation of entry and rates, but would preserve authority over so-calledterms and conditions, which is a dual-jurisdictional approach. As previously noted, States took adecidedly hands-off approach to regulation until an upsurge in complaints beginning in 2000.Since that time, States have approached the problems in a variety of ways, including throughattorneys generals offices, State public utilities commissions, legislatures and courts.

Throughout the last year of the 109 th Congress, significant discussion was generatedaround proposed legislation (H.R. 5252, amended in the Senate) that would have preemptedStates permanently in federal statute from enforcing provisions that affect the terms andconditions of wireless service. NARUC opposed these efforts and the legislation ultimatelyfailed to move. While NARUC continues to believe that broadly preemptory language is not inthe best interests of consumers, it also understands the need for ongoing dialogue with industryas the wireless market continues to evolve in an effort to foster a cooperative federal-Stateapproach on issues such as technological innovation, network build-out, greater competition, andeducating and protecting wireless consumers.

NARUC has recently passed two resolutions that are directly relevant to this subject. Thefirst concerns the overarching principles in an approach of “functional federalism”, in whichStates emphasize their core competencies in areas such as consumer protection, highlighted in itsFederalism and Telecom White Paper approved at the 2005 Summer Meeting (Resolution on

NARUC Telecommunications Legislative Reform). The second is a resolution (Resolution onState Jurisdiction over Wireless Industry), adopted at the 2006 Summer Meeting, that expressesits strong opposition to attempts to preempt its recognized authorities under “terms andconditions” in federal legislation, while reiterating its willingness to continue a collaborative



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dialogue with the wireless industry. Therefore, NARUC policies will continue to be guided bythe principles and statements included in these resolutions. NARUC believes that federalstandards or guidelines for consumer protection in wireless services may be an appropriate wayto help streamline rules that apply to wireless carriers, and address the primary concernexpressed by wireless carrier, specifically, the allegation that contradictory State consumer

protection laws unduly burden the industry with compliance costs.

At the same time NARUC believes that there must be a role for State enforcement ofthose standards. Experience has shown that State commissions and attorneys general are betterequipped to handle the myriad individual complaints in a case-specific, timely way as comparedto an overburdened Federal Communications Commission operating at a distance.

Within this framework of “national rules, State enforcement,” there is a good deal ofdebate that can and should happen between State and federal policy makers, consumer groups,State attorneys general and the wireless industry. For example, the level of State discretion to goabove, deviate or innovate beyond federal rules would undoubtedly be an area of disagreement

amongst various parties. Nonetheless, NARUC supports and commits itself to a process thatallows a full vetting of these policy options and ideas in order to explore possible options toachieve as much consensus as may be possible.

B. Wireless ETC Issues

1. ETC Background

ETC is an acronym for eligible telecommunications carrier. An eligibletelecommunications carrier is a common carrier that has been designated to receive universalservice support. To be designated as an ETC, a company must file an application with the State

commission and the FCC and meet all State and federal ETC criteria. Depending on each State’s jurisdiction, either the State commission or the FCC is responsible for reviewing applications forETC designation to ensure compliance with section 214(e)(1) of the Federal Act. 295

The amount of USF support going to competitive ETCs (CETCs) has growntremendously since 1999, and recently is a major cause in the growth in disbursements from theHigh-Cost Fund. According to the Universal Service Administrative Company (USAC), USF

payments to CETCs have increased from $535,000 in 1999, to an estimated $1.1 billion by the4th Quarter of 2006 (based on annualizing the 4 th Quarter actual disbursements from USAC of$286 million to the CETCs). For the 2007 year, it is expected that wireless CETCs will continueto receive an amount in the range of $1.1 billion, based on currently eligible carriers, and mayreceive additional funds depending on the resolution of applications for ETC status beforevarious State commissions. On the other hand, it’s important to note the amount ofcontributions to the USF that wireless carriers have made. Such contributions amounted toapproximately $2.5 billion for 2006, based on 230 million subscribers and a safe harborcontribution rate of 28.5 percent (not based on actual USAC data). This amounts to slightlyover $1.00 USF fee per wireless customer, on an average basis nationally. With the proposed

295 See 47 U.S.C. §214(e)(1).



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new safe harbor contribution rate of 37.1 percent and a higher subscription base, it is reasonableto assume that the contributions will increase further in 2007.

A telecommunications company designated as an ETC must offer the services supported by the federal universal service systems throughout its designated service area. 296 The ETC must

offer these services using either its own facilities or a combination of its own facilities and resaleof another carrier’s services. 297 If the company plans to offer the services solely through resale, itshall not be designated an ETC. 298

The supported services and the associated charges must be advertised by the ETCthroughout the service area for which designation is received, using media of generaldistribution. 299 The ETC must also advertise the availability of Lifeline and Link Up services in amanner reasonably designed to reach those likely to qualify for those services. 300

2. FCC Report and Order released March 17, 2005

In a Report and Order released March 17, 2005 (Report and Order, FCC 05-46), the FCCadopted additional requirements that all ETC applications must meet to be designated an ETC bythe FCC. 301 An ETC applicant must demonstrate: (1) a commitment and ability to provideservices, including providing service to all customers within its proposed service area; (2) how itwill remain functional in emergency situations; (3) that it will satisfy consumer protection andservice quality standards; (4) that it offers local usage comparable to that offered by theincumbent LEC; and (5) an understanding that it may be required to provide equal access if allother ETCs in the designated service area relinquish their designations pursuant to section214(e)(4) of the Act. 302 These requirements are mandatory for all ETCs designated by theCommission, including those using wireless technologies. 303 ETCs designated by the FCC priorto the Report and Order were required to make such showings when they submit their annualcertification filing on October 1, 2006. 304 The FCC also encouraged State commissions that havechosen to designate ETCs under delegated power from the FCC to apply these requirements toall ETC applicants over which they exercise jurisdiction. 305 A number of State commissions haveadopted the FCC’s ETC designation criteria, and some have chosen to expand upon therequirements by requiring additional criteria for ETC applicants in the areas of service qualityand reliability and consumer protection.

296 47 U.S.C. §214(e)(1)(A). The services that are supported by the federal universal support mechanisms are: (1)voice grade access to the public switched network; (2) local usage; (3) dual tone multi-frequency signaling or itsfunctional equivalent; (4) single-party service or its functional equivalent; (5) access to emergency services,including 911 and enhanced 911; (6) access to operator services; (7) access to interexchange services; (8) access todirectory assistance; and (9) toll limitation for qualifying low-income customers. See 47 C.F.R. §54.101.297

47 U.S.C. §214(e)(1)(A).298 See 47 C.F.R. § 54.101(a)(5).299 See 47 U.S.C. §214(e)(1)(B). 300 47 C.F.R. §§54.405(b) and 54.411(d).301 In the Matter of Federal-State Joint Board on Universal Service , Report and Order, CC Docket No. 96-45, FCC05-46, Adopted February 25, 2005, Released March 17, 2005.302 Id. at ¶20. 303 Id.304 Id.305 Id.



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In response to this important FCC Report and Order, the Telecommunications Committee

established a task force to examine the response of State commissions to this order and toundertake a survey. The first ETC Task Force Report was published at the Summer Meeting in2005, and has been updated several times since then. Forty States have responded to this survey,

and the survey demonstrates that State commissions have responded in various ways to the“encouragement” of the FCC Order and its specific criteria. A number of State commissionshave adopted the FCC’s ETC designation and annual certification criteria by their own rules or

by reference. Some States have modified the FCC proposed criteria and adopted them as rules.Meanwhile, some States have chosen to expand upon the requirements by requiring additionalcriteria for ETC applicants in the areas of service quality, network reliability and consumer

protection.

Since the ETC Task Force has surveyed the specific issues in the Report and Order, thisreport will not re-examine these issues again in great detail. In brief, the FCC Order requires thatthe ETC applicants must demonstrate its commitment and ability to provide supported services

throughout the designation service area by providing service to all customers in its designationservice who request it, and by submitting a formal network improvement plan that describes howuniversal service funds will be used to improve service and coverage. For the former, itsuggested several specific technologies and ways in which the ETC applicant should provideservice to such a requesting customer. For the latter, the FCC suggested that the ETC applicantsubmit a five-year plan describing with specificity its proposed improvements or upgrades to theapplicant’s network on a wire center basis throughout the designated service area.

The Report set forth detailed criteria in the following areas for the ETC applicant tofollow when requesting initial ETC designation or re-certification on an annual basis: a) abilityto remain functional in emergency situations; b) consumer protection; c) local usage; d) equalaccess; and e) adequate financial resources. It also encourages the State commission to carry outan analysis of whether or not the ETC designation will service the public interest, by examiningsuch factors as a cost-benefit study, potential for cream-skimming effects, and the financialimpact on the High-Cost Fund.

Finally, the Order set forth augmented reporting requirements that are currently required by the FCC to be submitted by October 1 st annually, which are called certification and reportingrequirements. They include enhanced and detailed information in the following areas:(1) progress reports on how the ETC met the goals outlined in its service improvement plan,including the submission of maps and a wire center-level analysis; (2) information on serviceoutages, lasting at least 30 minutes that potentially affect at least ten percent of users or an E911facility; (3) the number of unfulfilled service requests; (4) the number of complaints per 1,000handsets or lines; (5) certification that the ETC is complying with applicable service qualitystandards and consumer protection rules (such as the CTIA’s Voluntary Consumer Code, or aState-level standards); (6) ability to function in emergency situations; (7) provision of a localusage plan comparable to that offered by incumbent LEC; (8) provision of equal access to longdistance carriers in the event that no other ETC is providing it within the service area.



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C. Interconnection Issues

The Telecommunications Act of 1996 (Act) directed the FCC to take action to removestatutory, regulatory, economic, and operational barriers to local telephone services competition. In1998, the FCC established a framework of national rules. The FCC's strategic goal for competition

is to ensure that there is a comprehensive and sound competitive framework for communicationsservices. One of the objectives of the FCC has been to facilitate a more effective wholesale marketthrough interconnection policy and other competition-related rules.

For a wireless telecommunications company, interconnection means the linking of itswireless network to the network of a local exchange company, either directly or indirectly, forthe exchange of traffic. Compensation among companies is for transport and termination on onecarrier’s network of traffic that originates on the network facilities of the other carrier.

Each telecommunications carrier must interconnect directly or indirectly with thefacilities and equipment of other telecommunications carriers in conformity with the terms of

Section 251(a) of the Act. Incumbent local exchange companies (ILECs) may requestinterconnection with the local exchange network from a CMRS provider and vice-versa.Carriers may invoke the procedures set forth in Sections 252 of the Act. Providers receivingsuch a request must negotiate in good faith with the requesting carrier and must, if requested,submit to arbitration.

State commissions have significant roles concerning the interconnection of all carriers,including wireless providers. Under Section 252(e) of the Act, interconnection agreements must

be approved by the State commission. Any party negotiating an interconnection agreement canask a State commission to mediate or arbitrate differences or open issues.

Today, arrangements for direct or indirect interconnection of wireless facilities and forthe transfer of telecommunications between CMRS providers and local exchange companies(LECs) are considered routine. However, CMRS/LEC intercarrier compensation issues fortransport and termination of traffic might resurface in the FCC’s intercarrier compensationdocket.

D. Public Safety and E-911

911 is the official national emergency number in the U.S. and Canada. Dialing 911connects you to a Public Safety Answering Point (PSAP) dispatcher trained to route calls to localemergency medical, fire, and law enforcement agencies who can deliver help as quickly as

possible.Wireless has become a lifeline for people in emergency situations. Wireless users make more

than 224,000 calls to 911 every day – more than 70 million calls a year – to call for help, to stop crimes,and to help others in need. Many 911 systems now automatically report the telephone number andlocation of the 911 caller, a capability called Enhanced 911 or E-911. Wireless carriers candeploy technology to provide the latitude and longitude of the 911 caller within specific accuracyrequirements.



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1. FCC Wireless 911 Initiatives

The Wireless Communications and Safety Act of 1999 (911 Act) charges the FCC withfacilitating the implementation of end-to-end emergency response at the State and local level.The FCC’s role is limited to providing support and does not authorize it to regulate statewide

plans. The FCC adopted wireless 911 rules aimed at improving the reliability of wireless 911services and identifying the location of wireless 911 callers to enable emergency response personnel to provide assistance more quickly. The FCC’s wireless 911 rules apply to all cellularlicensees, broadband Personal Communications Service licensees, and certain SpecializedMobile Radio licensees.

The FCC’s June 12, 1996 order in Docket No. CC Docket No. 94-102 required thatwireless carriers transmit all 911 calls to a PSAP, regardless of whether the caller subscribes tothe carrier’s service. The order also required that wireless carriers provide location information,a capability referred to as Automatic Location Identification (ALI), in a two-phase plan.

Under Phase I, wireless carriers were required to provide a callback number for thehandset placing the 911 call and report the location of the cell tower that received the call.Compliance with Phase I was required within six months of a valid request by a PSAP, or April1, 1998, whichever was later.

Under Phase II, wireless carriers are required to begin providing the latitude andlongitude of the caller with specific accuracy requirements. Carriers have the option to providethis ALI information by deploying location information technology in their networks (a network-

based solution), Global Positioning System (GPS) technology in the subscribers’ handsets (ahandset-based solution), or a combination of location technology in both the network andhandsets (a hybrid solution).

The 1996 order required compliance with Phase II rules within six months of a validrequest by a PSAP, or September 1, 2003, whichever is later. Also, wireless carriers subject tothe rules were directed to report their Phase II plans, including the technologies they plan to use,

by November 9, 2000. The Phase II reports from carriers with nationwide footprints (Tier Icarriers) – that collectively serve over 78 percent of the nation’s mobile telephone subscribers --included specific Phase II compliance plans requiring certain relief from specific provisions ofthe Phase II rules. The FCC responded by allowing Tier I carriers – AT&T Wireless, CingularWireless, Nextel Communications, Sprint PCS, Verizon Wireless, and T-Mobile f/k/aVoiceStream Communications – to commit to individual compliance plans, but all of thesecarriers have committed that their plans for handset-based solutions will be fully implemented nolater than the end of the year 2005. Tier I carriers choosing handset-based location solutionsmust provide the location of wireless 911 calls with an accuracy of 50 meters for 67 percent ofcalls and 150 meters for 95 percent of calls. Carriers using a handset-based solution also mustensure that 95 percent of their customers have location-capable handsets no later than December31, 2005.

The FCC also received numerous requests for relief from non-nationwide CMRS providers seeking additional time to comply with Phase II rules. These carriers claimed



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technical problems and delays in distribution of network equipment and handsets in light ofvendors’ focus on filling orders from nationwide carriers. For non-nationwide Tier II (more than500,000 subscribers) and Tier III (no more than 500,000 subscribers) CMRS providers, the FCCadopted phase-in timelines, Docket No. FCC 02-210.

Tier II carriers – ALLTEL, US Cellular, Western Wireless, Leap Wireless, Qwest,Centennial Cellular, CenturyTel, Dobson, Triton PCS, American Cellular, Rural CellularCorporation, and Price Wireless – are required to report quarterly on their E-911 Phase I andPhase II deployment. Tier III carriers were required to provide an interim report due August 1,2003 concerning their E-911 deployment. Like Tier I carriers, the Tier II and Tier III carrierswho employ a network-based location technology are required to ensure that penetration oflocation-capable digital handsets among its subscribers reaches 95 percent no later thanDecember 31, 2005. Once a PSAP request is received, Tier II and Tier III carriers must, withinsix months, install hardware as needed and begin delivering Phase II enhanced 911 service to thePSAP.

More recently, on March 22, 2005, the FCC order in Docket No. FCC 05-79 addressed40 requests for relief from the Commission’s wireless E911 Phase II requirements filed by or on behalf of small wireless carriers. The petitions fell into six categories: (1) carriers deploying ahandset-based solution in conjunction with a CDMA upgrade; (2) carriers electing a network-

based solution; (3) carriers operating roaming-only networks (carriers’ carriers); (4) carrierselecting a handset-based solution in conjunction with a GSM upgrade; (5) AMPS/TDMA carrierselecting a handset-based solution; and (6) other requests. In individual cases, the FCC extendedthe December 31, 2005 deadline to ensure ninety-five percent penetration among theirsubscribers of location-capable handsets. The FCC denied a request for long-term relief from thePhase II rules for carriers operating roaming-only networks and serving as a “carrier’s carrier.The FCC denied a request for general relaxation of the Phase II requirements for smaller wirelesscarriers filed by the Rural Telecommunications Group. The FCC required each Tier III carrierthat was granted individual relief to file an interim status report with the FCC on September 1,2005.

It is important to note that the December 31, 2005, date primarily requires carrierschoosing a handset-based Phase II solution to ensure that at least 95% of their subscribers havelocation-capable handsets. The FCC has no jurisdiction over PSAPs, and there is nocorresponding requirement that PSAPs actually be able to receive Phase II data by December 31,2005.

E. Universal Service and Intercarrier Compensation

A primer on the interplay between universal service policy and intercarrier compensation asit relates to the telecommunications industry generally and the wireless industry specifically is well

beyond the scope of this paper. Volumes have been, and are written about these critical topicswhich are very much at the front of the minds of federal and State policy makers. NARUC, led bythe Telecommunications Committee’s Intercarrier Compensation Task Force, has been intimatelyinvolved in creating the forum where industry stakeholders have crafted a reform proposal that has

been presented before the FCC. Suffice it to say that questions of “who pays for what” will be



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tremendously important to all of telecommunications and will be an area of great interest to Stateregulators for the foreseeable future.

V. State Best Practices and Proactive Approaches

A. Overview

Consumers, State regulatory commissions and providers share many common goals.Two fundamental goals are (i) bringing state-of-the-art technologies to as many people asquickly as possible and (ii) effectively resolving consumer issues.

The remainder of the paper addresses the different ways states have approached thesegoals. Section B below enumerates a number of “best practices” aimed at facilitating consumerissues. Section C then examines several State regimes focused on the wireless industry.

B. Sample State Best Practices

1. Communicating with Consumers

Communication is a two-way street. Commissions need to listen to consumers and thewireless industry; commissions can also provide the public and industry with valuableinformation.

Good policy starts with a strong working knowledge of what consumers want, need andexpect from the wireless industry. Determining what consumers deem important and valuablewill likely vary considerably from place to place. For instance, one community may lack

coverage while another may need more capacity to handle increasing wireless traffic volume.Basic analog voice service may be of importance in a rural area while another area may be moreinterested in the latest applications.

Consumers oftentimes see commissions as experts on telecommunications issues and animportant resource. Commissions can provide the public with information on topics like thoseoutlined in Subsection 3 below and other basic information like industry statistics, comparisonsof analog and digital technologies, differences among cellular and other wireless platforms,

buying considerations and other State, federal and company resources.

2. Establishing Dialogue with Providers

Because State commissions typically have not regulated wireless providers economically,they may not have the same sort of established relationships with the wireless companies thatthey do with other telecommunications providers. Improved communications can yieldnumerous benefits. While many of these are self-evident, the providers can supply importantinformation to commissions that may help to resolve consumer complaints, to analyze State andfederal policy proposals, to promote efficient and effective use of financial resources and todisseminate information to the public.



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Oftentimes, the public affairs/regulatory personnel will be the appropriate point of

contact. However, especially when working on coverage, zoning and build-out issues,commissions will need good contacts with the engineering/network side of the company. Also,while under some corporate structures there may be duplication with the public affairs

department, commissions should work closely with the customer service personnel – especiallywhen resolving consumer complaints. Many State commissions already do so today.

3. Building Expertise within the Commission

If a commission becomes more involved with wireless issues, it is critical to build thecommission’s expertise on a wide range of issues. Commissioners, analysts, attorneys andconsumer protection specialists will all need a good working knowledge of the wireless business

basics, including:

• Technology basics regarding towers, handsets and systems;•

System and network design;• Build-out strategies and associated issues relating to costs and access to capital;• Industry and company-specific policy and regulatory approach;• Consumer complaint processes;• Marketing and advertising practices;• Dealer/franchisee relationships

Possible sources include wireless providers, industry associations, equipmentmanufacturers, the FCC, universities, research groups, and other State commissions.

4. Resolving Consumer Contacts

Commissions have considerable expertise and experience in resolving consumer issues.Three examples of commission involvement are: (1) statutory-based, i.e. an explicit grant ofconsumer protection functions; (2) ETC-based; states can use ETC designation and USFcertification as a way to, at a minimum, evaluate how well providers are complying withreasonable requests for service, or as a way to possibly gain greater involvement in resolvingindividual complaints; and (3) voluntary agreements with wireless providers for some State rolein addressing consumer complaints.

As with other consumer issues, commissions will want to coordinate efforts with theState’s Office of Attorney General, consumer counsels and the like, or with industryorganizations like CTIA – The Wireless Association.

5. Fostering Cooperation Among Interested Parties

State commissions could seek out additional parties interested in the policies surroundingthe deployment of wireless technology.



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On the local level, these may include elected officials, businesspeople and economicdevelopment experts, education professionals, public safety officials and members of the medicalcommunity. If communities lack subject matter expertise, commission staff can help themanalyze wireless issues. Good examples might be why a provider needs a tower in certainlocation or what the options for tower designs are. Commissions can provide local decision-

makers with contacts at the wireless providers as well. Obviously, commissions should besensitive that local governments, tribes and other entities may have primary responsibility forzoning and other issues and may not wish commission involvement.

In addition, as wireless carriers compete for limited capital funding to finance networkdeployment, commissions should carefully consider the effects that their decisions and policiesmight have upon investment in their states. In this regard, State commissions might alsoconsider consulting representatives of the financial markets and economists for advice on howcertain approaches might help or hurt investment.

For the wireless providers, commissions can furnish important information regarding

State, tribal and local dynamics. This cooperative role can yield better results for all involved.Commissions should, as with traditionally regulated utility issues, work closely with the

Governor’s office, Office of Attorney General, State legislature, State agencies, State/localentities that use other telecommunications networks, Native American tribes, congressionaldelegations, and federal agencies on a myriad of wireless topics.

C. State Case Studies

This section examines several States’ policies and programs to encourage development ofthe wireless industries in their states and how they address consumer interest issues.

1 . Arizona

In Arizona, legislation was enacted (SB 1486) in 2006 which limits the ArizonaCorporation Commission’s (ACC) jurisdiction with respect to wireless carriers. SB1486 statesspecifically:

"...The commission may adopt or administer arbitration procedures to resolvecomplaints or disputes brought by a party against a telecommunications company,except that the Commission shall not subject a wireless provider to arbitrationunless the wireless provider and customer consent in writing. This section doesnot prohibit the Commission from arbitrating disputes or complaints against awireline service provider, involving telecommunications services contained in the

bundle of services, to the extent the Commission has jurisdiction as authorized pursuant to this chapter."

Currently, when the ACC Consumer Services Section receives a wireless complaint froma consumer, it is referred to the contact provided by the wireless company addressed in thecomplaint (to the extent company contact information has been provided to the ACC). An



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3. Florida

The Florida Public Service Commission (FPSC) does not have jurisdiction over wirelesscarriers. Florida law expressly provides that Commercial Mobile Radio services (CMRS)

providers do not fall within the definitions of a “public utility” or “telecommunications

company” that is regulated under Florida law.306

The Florida Commission’s “hands-off” approach to wireless services has allowedconsumers to benefit from competition and has allowed the wireless industry to innovate to meetcustomer’s multi-faceted needs. 307 Wireless subscribers in Florida continue to increase yearly asconsumers enjoy the benefits of a competitive market for wireless service. Florida wirelesssubscribership was 12.5 million at year-end 2005. 308 With an express statutory exemption fromPSC jurisdiction, regulatory risk has been minimized, and carriers have shown an increasedwillingness to invest in the State.

As competitive markets continue to evolve, consumer satisfaction is critical to the

continued existence and growth of wireless carriers. Even though the Commission does nothave jurisdiction, Florida has an established, effective process for addressing customer complaintissues cooperatively with the wireless carriers.

Roles of the PSC and the Department of Agriculture & Consumer Services

In Florida, non-jurisdictional wireless complaints are generally routed to the FloridaDepartment of Agriculture and Consumer Services (the Department). The Department functionsas the State’s clearinghouse for consumer complaints. The Department assists consumers withinformation, protection, and complaints, regardless of whether it regulates that particularindustry. 309 While the Department has no jurisdiction over wireless carriers, they act as mediatorto get disputes between carriers and consumers resolved.

Because the FPSC lacks jurisdiction over wireless providers, it does not initiate acomplaint process of its own and generally refers wireless consumer complaints directly to theDepartment; however, the FPSC has one other noteworthy procedure to assist certain wirelessconsumers. Many larger wireless carriers provide the FPSC’s Bureau of Complaint Resolutionwith phone numbers of company employees who are designated to assist consumers whocontacted the FPSC with a wireless-related problem. These contact numbers are often referred toas “escalation numbers.” If (i) the wireless consumer’s complaint involves a company that has

provided the FPSC with such an “escalation number” and (ii) the wireless consumer is willing towork with the company, then the FPSC complaint analyst will offer the phone number to theconsumer. Otherwise, the FPSC refers wireless-related complaints to the Department, whichaddresses the complaints as follows:

306 Fla. Stat. Ann. Sections 364.02 (2), (13)(c), 366.02(1).307 FPSC Report on Status of Competition in the Telecom. Industry, 2004.308 FCC report on “Local Telephone Competition: Status as of December 31, 2004”, July 2005.309 http://www.doacs.state.fl.us/



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Addressing the Complaint

1. If a wireless complaint is filed, the Department provides a copy of the complaintto the FCC. The FCC does not regulate contractual arrangements with cellular

providers, but does handle complaints about wireless service.

2. The Department then attempts informal mediation to resolve the consumer’sdispute by providing the wireless carrier with a copy of the consumer complaintagainst them and asking them to provide input and comment regarding thecomplaint.

3. The Department then attempts to mediate the matter to a successful resolution for both parties. Often, the carrier will directly discuss the issue with the complainantto satisfactory conclusion.

4. If a solution cannot be found, the Department will document the complaint in its

database and close the file.5. If fraud or misrepresentation is found to be involved, then the Department may

investigate further and turn over their findings to the Attorney General’s office. 310

In short, Florida is addressing wireless consumer issues through a mix of generallyapplicable consumer protection law and interagency cooperation via the Florida PSC and theFlorida Department of Agriculture and Consumer Services.

4. Iowa

In October of 2006, Iowa adopted new eligibility criteria and annual reportingrequirements for ETCs. As a result, some wireless carriers that are CETCs will be required tosubmit a two year network improvement and maintenance plan, progress updates on the plans,coverage area maps depicting signal strength, information on calling plans and data on certainservice quality performance indicators. Only wireless carriers with ETC designation are subjectto these new rules. These new rules also require wireless CETCs to commit to complying withcertain minimum consumer protection standards based on the 2006 Cellular Telecommunicationsand Internet Association’s (CTIA) Consumer Code for Wireless Service. These new rulesextend the Iowa Utilities Board’s complaint jurisdiction over wireless CETCs in order to protectconsumers in the ETC context and further universal service goals.

5. Nebraska

The Nebraska Public Service Commission (NPSC) does not currently have statutory jurisdiction over wireless carriers. The wireless industry was deregulated in Nebraska with theenactment of LB 835 in 1987 prior to the widespread deployment of, and dramatic growth inconsumer preference for wireless service. While not regulating wireless carriers, the NPSC has

been taking complaints from customers regarding wireless issues since July of 2001. The two

310 Id.



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categories in which most wireless complaints fall are in are billing and service issues. The billingcategory includes early termination fees assessed by the carriers.

As a general rule, the wireless carriers have been working together with the NPSC toresolve these issues. NPSC Wireless complaint procedure: 1. Complaints are received via

telephone, online complaint form, fax, e-mail, or letter. 2. Once filed the complaint is added toour Access Database to facilitate record keeping including tracking that a response is provided by the carrier. 3. Provide information to wireless carriers by email or telephone call forinvestigation and resolution. 4. Carrier has 5 working days to respond to the NPSC. Legislationwas introduced in the Nebraska Legislature this January (LB 330) which would delegate to the

Nebraska Public Service Commission limited authority to resolve disputes between wirelesstelephone companies and consumers regarding billing and service agreements. The NebraskaPublic Service Commission (NPSC) does not have statutory jurisdiction over wireless carriers.

6. New York

Cellular Mobile Radiotelephone Service, now known as Commercial Mobile RadioService, or CMRS, was first offered in 1981. Like its predecessor mobile services, it was treatedas a regulated telephone service. In 1993, the federal government preempted State and localgovernments from regulating the entry of or the rates charged by any commercial mobile serviceor any private mobile service. 311 States retained an ability to regulate the other terms andconditions of CMRS and to establish requirements for ensuring the universal availability oftelecommunications services.

Under the Telecommunications Act of 1996 the States did gain responsibility for certainaspects of wireless services. 312 These responsibilities include the review and approval ofinterconnection between wireless service providers and other telecommunications providers,mediation and arbitration of interconnection disputes, 313 access to telephone numbers, 314 andcertification of Eligible Telecommunications Carriers (ETC) 315 to receive Universal Service FundHigh-Cost Support. 316

311 This occurred under the Omnibus Budget Reconciliation Act of 1993 (47 U.S.C. §332 (c)(3), as of June 30,1993). The New York PSC retained its authority until June 18, 1995, when it allowed an FCC decision to deny awaiver of the preemption to stand (PR Docket No. 94-108, Issued May 19, 1995). New York Public Service Law

§5(6) was enacted December 1, 1997 to suspend the application of Public Service Law to the provision of cellulartelephone services.312 "Wireless" includes CMRS, Private Radio Service, Personal Communications Services, Broadband PersonalCommunications Services, and Paging Services.313 47 U.S.C. §251 and 252.314 Delegated by the FCC under 47 U.S.C. §251(e).315 47 U.S.C. §214(e)(2).316 While wireless providers contribute to the Federal Universal Service Fund, there is no such requirement tocontribute to the State Targeted Accessibility Fund. (See Cases 94-C-0095 and 28425, Opinion No. 98-10, issuedJune 2, 1998).



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In 2005, the New York Public Service Commission (NY PSC), recognizing thecompetitive state of the wireless market, approved the merger of Sprint and Nextel. 317 Bothholding companies had subsidiaries that provided telecommunications services other than CMRSor Private Communications Services.

Since the 1997 suspension of Public Service Law, other government agencies have takenvarious roles over wireless services. The State Attorney General and the Consumer ProtectionBoard take complaints concerning wireless services. The Consumer Protection Board maintainsa Do-Not-Call list for wireless service customers. Finally, the New York City Department ofInformation Technology and Telecommunications has performed wireless service surveys and

provided coverage maps by company for public use.

In its recent Competition III Order, 318 the NY PSC found an interconnectedness oftelecommunications networks, plants, and users. An event on one platform often influencesother interconnected platforms and can adversely affect the public safety, health and welfare.Accordingly, the NY PSC is considering consistent and voluntary outage reporting. Staff has

invited parties to discuss the issues of emergency outage reporting. The NY PSC has alsorequested the filing of annual reports on network reliability by all telecommunications carriers,including wireless service providers. A proceeding to consider changes to its service qualityregulations has been initiated. 319

Finally, in response to the competitive and partially unregulated nature of the intermodaltelecommunications market, the NY PSC called for the establishment of a consumer report. 320 This report will be available on the NY PSC website and will include basic information about atelecommunications company services, including wireless services. This information would be

provided on a voluntary basis by participating telecommunications companies. The report willlikely include descriptions of essential public safety and health protections (911 and E-911availability, CALEA compliance, per call and all call blocking of caller ID information),consumer protections (slamming and cramming protections, privacy policies, access to RelayServices), consumer features (website access, directory listings, number portability) and how tofile a complaint. The NY PSC staff has invited parties to participate in developing this report.

7. North Carolina

Intermodal competition has substantially changed the communications industry in NorthCarolina. For the first time in history, North Carolinians have more wireless phones than wire

317 Case 05-C-0211 – Joint Petition of Sprint Communications Company L.P. on Behalf of Sprint Corporation and

Nextel Communications, Inc. for Approval of a Certificate of Merger, with Sprint Corporation being the SurvivingCorporation, issued and effective April 20, 2005.318 Case 05-C-0616 – Proceeding on Motion of the Commission to Examine Issues Related to the Transition toIntermodal Competition in the Provision of Telecommunications Services. – Statement of Policy on Further StepsToward Competition in the Intermodal Telecommunications Market and Order Allowing Rate Filings, issued April11, 2006.319 Case 06-C-0481 - Proceeding on Motion of the Commission Providing for the Examination of Service Qualityand Consumer Protection Regulations, Including Parts 602, 603 and 609 - Notice Concerning Service Quality andConsumer Protection Regulations, issued April 21, 2006.320 Case 05-C-0616, Order, issued April 11, 2006.



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line connections. According to the FCC’s “Local Telephone Competition” report, the number ofwireless subscribers in the State rose to 5.36 million, while wireline connections declined to 4.99million statewide, as of year-end 2004.

Like many states, the North Carolina Utilities Commission (NCUC) does not have

jurisdiction over wireless carriers. N.C. General Statute, Chapter 62-3(23)(j) states that the term“public utility” shall not include any person, not otherwise a public utility, conveying ortransmitting messages or communications by mobile radio communications service. Mobileradio communications service includes one-way or two-way radio service provided to mobile orfixed stations or receivers using mobile radio service frequencies. Thus, the NCUC jurisdictiondoes not include CMRS providers.

Despite not regulating the wireless industry, North Carolina has in place a process toresolve consumer complaints. When complaints regarding wireless carriers are reported to the

NCUC, they are directed to the North Carolina Consumer Services Division of the Public Staff,which in turn refers consumers to the Attorney General’s (AG) Office. The NCUC does not

attempt to mediate wireless complaints and does not directly deal with the wireless carriersregarding complaints against them. Rather, such complaints are handled by the State agencywith the jurisdiction over all consumer complaints.

The AG’s office handles consumer complaints and provides consumer tips on its websitesto help assist consumers when dealing with businesses. If customers feel that a wirelesscompany has misrepresented its rates or other terms and conditions of its service, they can file acomplaint with the AG’s Consumer Protection Division, and the Division will work to resolvethe situation. In cases where there is a pattern of illegal business practices, the AG’s ConsumerProtection Division may also take legal action to enforce the law on behalf of the public. Theoffice cannot, however, represent individuals in their private legal disputes.

The AG’s Consumer Protection Division also works to educate consumers so that theycan avoid problems from the start. They publish on their website consumer tips on a wide rangeof topics, including wireless services.

8. North Dakota

In addition to the wireless ETC, consumer protection, and interconnection issues handled by many State commissions, the North Dakota Public Service Commission (ND PSC) has starteda wireless outreach initiative designed to assist wireless phone customers in the State. Throughit, the PSC is pursuing a voluntary initiative designed to serve the State’s wireless consumers.

The Commission’s initiative consists of two programs: “Zap the Gap” and “ConnectingConsumers.” The “Zap the Gap” effort is designed to encourage wireless investment in theState, especially underserved areas. The ND PSC collects information from consumers todetermine areas where there is demand but low wireless coverage. The information is forwardedto wireless providers to help bring attention to areas needing service. ND PSC staff has created aclearinghouse of planning information for wireless companies. The information includesapproximations of the number of wireless phones per capita in different counties in the State,



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lists of suitable structures for wireless antennas, and consumer contact information that may helpwireless providers in their network planning. The ND PSC facilitates discussions betweencommunities that want wireless service and providers operating in the State.

“Zap the Gap” also identifies strategies to advocate for North Dakota’s interests in

wireless matters with other government agencies. Many of the decisions that affect wirelessinvestment in North Dakota are made at the federal level. This component of the initiative targetsfederal rulemakings and opportunities with the FCC, Rural Utilities Service and other Statecommissions. One such recent example was the successful effort to lobby for the resolution ofcell tower permitting delays at the FCC.

The “Connecting Consumers” effort is designed to help consumers with wirelessquestions and concerns that they may have with their current services. The PSC established aninformation center on its webpage for consumers wanting to learn more about wireless issues.The Commission has also commissioned an e-mail address – [email protected] – for consumerswishing to contact the ND PSC with questions and concerns over wireless phone issues. Such

efforts complement general consumer protection authority provided by the State’s AttorneyGeneral.

In 2005, the ND PSC, in cooperation with the Bismarck-Mandan Chamber of Commerce,hosted a statewide conference on wireless telecommunications. The event brought hundreds toBismarck and helped focus attention on the challenges and potential of wireless technologies inrural America.

9. South Dakota

Former South Dakota Public Utilities Commission Chairman (SD PUC) Bob Sahr startedwith a simple concept in 2002: Ask the State’s consumers for their thoughts on wireless services.The overwhelming response was to improve cell phone coverage in rural areas. The public knewwireless technology was a critical piece of community infrastructure – important to public safety,economic development and quality of life.

In 2003, the SD PUC turned this input into action. It developed an innovative approachto facilitate the State’s wireless build-out: Open a proactive dialogue with the providers, buildstaff expertise on wireless technology and work with local communities to help them bringwireless services to town.

Letters, e-mails and petitions flowed in from towns interested in improved wirelessservice. Communities offered city water towers, grain elevators, county courthouses and ruralwater towers as possible cell sites. Grass-roots meetings were held in dozens of towns. The SDPUC hosted the South Dakota Wireless Conference, with a keynote by fellow South Dakotan andcurrent FCC Commissioner Jonathan Adelstein, focusing on how to bring wireless technology tothe State’s consumers faster.

The wireless providers responded. In 2004, Cellular One constructed 25 new towers inSouth Dakota; Verizon Wireless 14. Many of these towers were located in communities that



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previously had no wireless services. Beyond improving coverage, the SD PUC staff and thewireless providers work together to resolve consumer complaints on issues like false roamingcharges, dropped calls, analog versus digital questions, lack of system capacity and billingdisputes.

10. Tennessee

The Tennessee Regulatory Authority (TRA) does not have statutory jurisdiction overwireless carriers. Tennessee Code Annotated, Chapter 65-4-101(a)(6)(F), with a limitedexception, exempts from regulation as a public utility any entity “offering domestic publiccellular radio telephone service authorized by the Federal Communications Commission.”

The major wireless providers all serve customers in Tennessee. Over the years, wirelesscarriers have invested billions of dollars to improve wireless services in Tennessee, and continueto invest several hundred million dollars every year. Wireless is also a major source of jobs forTennessee, directly employing about 8,000 people and indirectly employing many more.

The wireless industry has been deregulated in Tennessee since the mid-1980s, when thesecond wireless carrier began offering service in the State. Tennessee has since become one ofthe most vibrant and competitive markets in the nation. While the Tennessee Legislature doesnot regulate wireless pricing, it does look at certain service-related issues. For example, last yearTennessee enacted a State law requiring cellular companies to provide a 10-day cancellation

process.

As a general rule, the TRA does not handle complaints on wireless carriers as theapplicable statute does not provide it with jurisdiction. However, an established process is in

place to ensure that customer issues are addressed. The TRA will typically refer a complaint tothe carrier, so that the carrier can attempt to resolve the matter. Further, if the wireless complaintinvolves issues of fraud and false advertising, then the matter will be referred to the TennesseeDivision of Consumer Affairs (TN DCA). Created in 1977, the TN DCA works to enforce theState Consumer Protection Act and assist consumers and businesses affected by unfair business

practices. The TN DCA coordinates mediation between consumers and businesses, and publishesa list of businesses that fail to address complaints. 321

The TN DCA Process for Complaints

1. To get a wireless complaint handled, the customer must live in Tennessee and mustcomplete a written complaint form.

2. A file of the complaint is created, and the file is assigned to a specialist.

3. The specialist will send a copy of the complaint to the business, and the business willhave 15 days to respond.

321 www.state.tn.us/consumer



The legislation did not pass, but that did not end the legislative interest in the VirginiaCommission’s role in wireless complaint resolution.

At the request of the patron of the legislation, we contacted wireless companies andobtained their voluntary agreement for the Virginia Commission staff to handle complaints from

wireless customers. The program was coordinated with Virginia's Department Agriculture andConsumer Services, which is the clearing house for other than utility complaints in Virginia andformerly received such complaints to a limited degree. It took effect in mid-April 2006 and has

been met with overwhelming success, thanks largely to the cooperation of wireless providers.From the program’s inception through the end of 2006, we resolved some 500 complaints (10%of total complaints taken over the same time period) which returned approximately $90,000 toconsumers in the form of bill credits. This was accomplished without any advertising other thansome information contained on our website which follows:http://www.scc.virginia.gov/division/puc/consumer/faq_wireless.htm.

* * *

While consumer complaints will continue to exist, decision makers on both the private and public sides are pursuing cooperative approaches to ensure that such needs are addressed withoutexcessive regulation that would impede wireless innovation and competition. An accessibleavenue for complaint resolution, mediation and disposition is an important component in makingcompetition work. States, as the “laboratories of democracy,” are the ideal place to experimentwith different approaches to new marketplace issues. The preceding examples show howcooperation between different State agencies and the federal government and the industry can

provide citizens with such an avenue for resolving both complaints and misunderstandings.

07 0221 mobile technologies

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