Wireless Information Services

In its just-released semi-annual report, the FCC reports that the number of broadband lines in service continues to increase at a healthy pace. You can view the entire report here. This robust growth is good news for our country, and especially its economy and its productivity.

Particularly noteworthy is the uptick in mobile wireless broadband subscribership--from 380,000 high-speed lines in June 2005 to 11 million in June 2006. Obviously, change is afoot. (There is a reporting lag of approximately six months; with all the new wireless offerings, including new feature-rich interactive content, I suspect the growth curve was even steeper in the second half of 2006.)

Communications Daily [subscription required] reports in yesterday's edition that FCC Chairman Kevin Martin is proposing on his own initiative to classify wireless broadband as "information services." The regulatory classifications in the current Communications Act--"telecommunications," "information services," "broadcasting," and "cable"--make no sense in today's marketplace and technological environment characterized by competition and convergence. I've written a lot about this. For an early essay on why the Communications Act's service classifications turn on what are essentially meaningless metaphysical techno-functional constructs, see my "The Metaphysics of VoIP." And for a more extended law review treatment in the Federal Communications Law Journal, see "Why Stovepipe Regulation No Longer Works: An Essay on the Need for a New Market-Oriented Communications Policy."

A major overhaul of the Communications Act that gets rid of these outmoded service distinctions for most regulatory purposes is all but inevitable. But for now we must work with the Communications Act we have. Chairman Martin's initiative to formally classify wireless broadband services as information services makes good sense. As wireless services become more important as an alternative broadband platform, they should be subject to the same deregulatory regime that applies to the others, whether telco, cable, broadband-over-powerline ("BPL"), or other. While none but the most rabid pro-regulatory advocates suggest that wireless broadband should be subject to common carrier-like rate and nondiscrimination obligations, reclassification now would be helpful to make clear that wireless broadband providers will not be regulated more stringently than other broadband providers. Like broadband services provided over other platforms, wireless broadband typically includes Internet access and other interactive features involving changes in form or content that are the hallmarks of information services.

After the Supreme Court's Brand X decision the Commission moved quickly to reclassify the telco's broadband service and it has also already classified BPL as an information service. Since the rates for wireless services were deregulated at the federal and state levels over a decade ago, the growth in subscribership has been remarkable. There are now over 220 million wireless subscribers, roughly 50 million more than the number of landlines in service. It is wireless' turn to be designated an information service.