Former FCC chief: U.S. wireless market <i>is</i> behind

(Credit: Reed Hundt)

Speeches by FCC bigwigs usually are pretty boring. Most of the time they involve a lot of policy minutia, grandiose plans to improve rural broadband access or some hand wringing over the amount of sex and violence on television. Even when the speech concern something that has a lot of implications, like the ongoing 700MHz auction, you tend to zone out after the first few minutes.

But after an FCC chief leaves office, it can be a different story. Yesterday, the FCC chairman under President Clinton gave an interview to Telephony Online. In the interview Reed Hundt talked about a lot of things, including the 700Mhz the universal service charge that we see on all cell phone bills. Yet what really caught my eye were his comments on the U.S. wireless market.

"[The U.S.] is the last market in the world that people choose to bring a new wireless product to." he said. "Not second or third--the absolute last." While I would agree with that statement in principle--Moto usually favors its home territory first--it was interesting to see it spelled out that way. A lack of high-end devices is a common complaint of U.S. cell phones users, and though many reasons have been identified, Hundt laid out another factor that I hadn't considered previously. "Right now the policy of the FCC has been to encourage AT&T and Verizon to become the twin Bells that dominate the wireless business. They're allowed to buy all the spectrum they can find," he said. "This is the only country in the world where the rule is the big guys can buy all of it...It's very hard for innovators to get into the market, in terms of content or software or hardware."

Though I've always though that the large carriers often stifle wireless innovation in the United States, I hadn't thought about it in that particular way. Granted, Hundt was nominated by a Democrat, and he may have a small ax to grind with the Bush administration, but I think he still has a point. Shutting smaller companies are shut out of the spectrum bidding process certainly wouldn't encourage much innovation. Hundt mentioned that Mexico, Canada, the United Kingdom, China and Japan carve out spectrum for new entrants. Perhaps the FCC should do the same. Admittedly, it doesn't sound like such a bad idea. What do you think?