Wireless industry defends itself against mounting criticism

CTIA lobbyist says U.S. companies offer competitive prices for high speeds, cool handsets and apps

Facing an unprecedented onslaught of criticism of its pricing models, exclusive handset deals and other practices, the wireless industry is gearing up to defend itself in hearings before the Federal Communications Commission and other government groups.

"The wireless industry in the U.S. has the coolest handsets, the applications are more robust, and the networks have the highest speeds with the lowest pricing," said Christopher Guttman-McCabe, vice president of regulatory affairs at the CTIA in an interview today. "Can things get better? Yes. But things will get better."

The CTIA, an association of wireless service providers, handset makers and a growing number of vendors of other wireless-based products and services, such as Google Inc., says it is a bit confused by the level of criticism heaped upon the industry in recent weeks. Critics have leveled a variety of charges at wireless companies. Among other things, they contend that there's a lack of innovation in the wireless market and they say that providers are overcharging for services, according to Guttman-McCabe.

"I think it's extremely hard to understand the criticism we're hearing," Guttman-McCabe said. "People pay ... a hell of a lot less than they paid [for wireless services] 15 years ago, and think of what you get now that you couldn't get then."

The CTIA is planning to carefully watch the FCC meeting on Thursday, when the agency will consider whether to conduct three probes, or "inquiries," into the wireless industry. The FCC will decide whether it will work to find ways to encourage wireless vendors to be more innovative, competitive and open in providing information to consumers looking to buy wireless services.

Guttman-McCabe said the CTIA expects the FCC to go forward with the inquiries, which will provide the industry with an opportunity to defend itself against the criticism. Officials from the wireless trade group won't testify or file written comments on Thursday, but the organization does expect to be given an opportunity to respond later, he said.

Although several industry critics and the FCC have recently voiced myriad concerns about the wireless industry, generating a spate of bad publicity, the CTIA noted that actual customer complaints to carriers this year have declined in nearly every category -- in both actual numbers and in the ratio of complaints per million customers.

The only area where complaints have risen is among consumers concerned about wireless telephone solicitations from a variety of companies, including those looking to sell car warranty extensions. Some of the carriers have aggressively fought those calls, many of which are made illegally by advertisers using auto-calling systems, Guttman-McCabe said.

He also noted that most carriers have implemented over the past 18 months new plans that allow customers to drop a plan or change a phone without penalty during a 30-day trial period. "I would put our industry up against any other in terms of the customer experience," Guttman-McCabe said.

The CTIA has already attacked the results of a survey conducted by the Organization for Economic Cooperation and Development that found that the price of wireless services in the U.S. is among the highest in the world. And Guttman-McCabe stated today that how the OECD arrived at its estimate of an average U.S. user cost of $53 per month is "beyond me." Some U.S. carriers have plans that provide voice and texting to what he called the average global user for less than $14 a month.

He also questioned those who say the U.S. wireless industry isn't innovative, noting that most of the top-selling wireless handsets around the world were first introduced in the U.S.

At the same time, he noted that 100,000 software wireless applications are now being sold in at least six major application stores. No stores were available as recently as 14 months ago, he said. Also, the U.S. has by far the most users of the fastest HSPA and EVDO networks.

"I'm willing to debate where the industry is from an innovation perspective, but it's not fair to say we're not innovative," Guttman-McCabe said.

He also said that he would welcome a discussion or debate on exclusive handset deals such as the one AT&T Inc. has for selling the iPhone. "That's a good policy topic," he said, noting that some of the deals are difficult to understand.

Arguments that prices for wireless service are unfairly higher than prices of wired broadband service don't hold water either, Guttman-McCabe added. Some critics have noted that a wired DSL line might cost a home computer user as little as $13 a month while wireless services can average about $60 a month for voice, data and texting.

"As to whether wireless service is not really worth it, I'd say 80% of my Internet use is on my BlackBerry and not my laptop," he said. "I rarely bring my laptop on a trip anymore."

Guttman-McCabe said that a recent event, he was able to use his BlackBerry to review a document sent by a colleague, check the weather in a foreign city he was about to visit, and tweet about his talk to his followers. "It's about productivity" -- and about placing a value on that, he said.

Copyright © 2009 IDG Communications, Inc.

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