FCC Takes Up Wireless Licensing

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The Federal Communications Commission votes Tuesday on the rules governing wireless licenses. The decisions they make could radically alter the U.S. cell phone industry, changing the kinds of cell phones you can use and what kinds of software you have on them.

ALEX CHADWICK, host:

This is DAY TO DAY. I'm Alex Chadwick.

ALEX COHEN, host:

And I'm Alex Cohen.

In a few minutes, the latest in reggae from a most unlikely source, two white guys known as the Culver City Dub Collective.

CHADWICK: First, can you hear me now? How about a new cell phone that doesn't cost $500 and lets you change phone companies when you want and pick features and software?

A government agency is voting today on the future of cell phones and other wireless devices. There's a lot of money in this and the possibility of real change for the device that makes modern life possible, or in some cases impossible.

NPR's digital culture correspondent Laura Sydell joins us. Laura, welcome.

And two words, not to scare people away, but: spectrum allocation.

LAURA SYDELL: I know, it sounds like it's going to make your eyes glaze over. But television stations are going to move to digital in 2009 and there's this all this spectrum. And it's going to be auctioned off. And what's crucial here is the rules. So...

CHADWICK: And spectrum is sort of the waves that cell phones travel on, that's how we're able to make these calls.

SYDELL: That's right. It's this wireless spectrum. It's in the air. You can't see it.

CHADWICK: Yeah.

SYDELL: But it is the reason that you and I are able to talk on a cell phone. That's right.

CHADWICK: All these waves belong to us. They have for generations. The government decided they belong to the public. So the Federal Communications Commission is setting rules in order to auction off some of this spectrum that is coming back into public hands. What are they doing?

SYDELL: Yeah. This is the place where it gets dicey. There're some things that they're discussing. One of them is, you may have noticed that when you buy a cell phone, it has to be approved by your carrier. So if I buy one from Verizon - say I'm going to switch, go to AT&T - I can't just do that. I actually have to go and get a new cell phone from AT&T.

Well, the FCC with this new spectrum is considering making a rule that they have to let any device on their spectrum. So that could mean, for example, that Apple might not have had to just to go with one carrier with the iPhone. And the other thing they're considering is allowing people to download any software they want onto their phone. Right now you probably notice that you can't download every bit of software that you want.

The other thing - the other big thing they're talking about here is forcing whoever buys it to rent out portions of spectrum. So that would mean the possibility that some other carriers could come along and say we're going rent spectrum and start a new cell phone business. And consumer groups like this because it means there could be more competition, not just the big four: Verizon, T-Mobile, AT&T and Sprint.

CHADWICK: Well, there are these four biggies who were set to bid on this spectrum and there could be others bidding on it. But then Google came in and said if you change these rules so that we can go in the direction that you've just kind of outlined, then we'll get in and we guarantee that we're going to bid more than four-and-a-half-billion dollars for some of this, and everything will be better for everybody.

SYDELL: Google indeed, though, has an interest. There's a reason that they're getting behind the same positions as the consumer groups. Because for them, right, if your cell phone can download any software, you can go to Google, right? If your cell phone isn't blocked from going to specific places or your mobile device or your PDA, and if you look at your mobile device you will see it is blocked. There's a lot of things you can't download and can't get. But you will now have the option, if it's open, of going to Google, anywhere, anytime, any place, and they like that idea.

CHADWICK: The anti-Google position I've read from industry groups does make sense in a way, but only in a way that could be dreamed up by a Washington lobby group, I think. Essentially they argue that the potential huge savings for consumers being able to switch back and forth on plans might make the spectrum, in total, kind of less valuable. So the government - that is, taxpayers - might lose something along the way, despite the fact that consumers, the people who buy these phones, likely would be saving a lot. Can they actually make this argument with a straight face?

SYDELL: Well, they can make this argument. For one thing, it is more valuable to them if they can hold onto complete control of the spectrum and they can decide what wireless devices you're going to use and what software you're going to download. It's more valuable to the taxpayer because they're willing to bid more on it and so therefore from the auction the taxpayers are going to make more money. So those are two of their big arguments.

CHADWICK: But aren't the taxpayers, the 240 million people, who owns cell phones, who are presumably going to get cheaper service because cell phones will be cheaper?

SYDELL: Well, they say cell phones might not be cheaper because right now they subsidize the cost of a cell phone, so you would have to pay for the cell phone yourself. On the other hand, you could take it with you if you decide you don't like Verizon and you want to go to AT&T.

CHADWICK: NPR digital culture correspondent Laura Sydell. Laura, thank you.

SYDELL: You're welcome.

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