Mobile Technologies

NARUC Telecommunications Committee Wireless Workgroup

February 2007

TABLE OF CONTENTS I. II. A. B. Introduction....5 What Wireless Means Voice & Beyond..6 Wireless Voice Technology................................................................................................ 7 Wireless Technologies Broader in Scope than Voice Technologies .................................. 7 1. Wireless Broadband ........................................................................................................ 7 2. Wi-Fi ............................................................................................................................... 8 3. WiMAX .......................................................................................................................... 9 4. Wireless Local Area Networks (LANs)........................................................................ 10 5. EV-DO .......................................................................................................................... 10 6. Ultra wideband.............................................................................................................. 10 7. Bluetooth....................................................................................................................... 11 8. GPS ............................................................................................................................... 12 9. RFID ............................................................................................................................. 12 10. Biometrics ..................................................................................................................... 12 11. 3G Technology.............................................................................................................. 13 12. Higher Speeds & Mobile Broadband Services ............................................................. 14 Data Applications.............................................................................................................. 14 Convergence of Wireless Device Functionality ............................................................... 16 1. Cellular Phones ............................................................................................................. 16 2. Smartphones.................................................................................................................. 17 3. Wireless E-mail Devices............................................................................................... 18 4. Pocket PCs/PDAs.......................................................................................................... 18 5. Laptop Computers......................................................................................................... 19 6. Bluetooth Devices......................................................................................................... 20 7. Digital Cameras ............................................................................................................ 21 8. M-Commerce Major component of Wireless Sector ................................................. 21 What Wireless Means Consumer & Economic Interests & Challenges 22 Consumer and Societal Interests and Challenges ............................................................. 23 1. Current FCC Data Regarding Extent of Wireless Industry Competition ..................... 23 2. Consumer and Societal Benefits ................................................................................... 24 a. Improved Communication ........................................................................................ 24 b. Education .................................................................................................................. 25 c. Rural Consumers....................................................................................................... 26 d. Business Consumers ................................................................................................. 27 e. Special Needs Consumers......................................................................................... 27 f. Improved Healthcare Telemedicine....................................................................... 31 g. Disaster Relief........................................................................................................... 32

C. D.

III. A.

B. C. 1. 2. 3. 4. 5. 6. IV. A. B. 1. 2. C. D. 1. E. V. A. B. 1. 2. 3. 4. 5. C. 1. 2. 3. 4. 5. 6.

h. National Security ...................................................................................................... 33 i. Personal Security ...................................................................................................... 34 j. Anti-theft Measures .................................................................................................. 34 Economic Interests............................................................................................................ 35 Wireless Challenges.......................................................................................................... 37 Voluntary Consumer Code ........................................................................................... 37 Assurance of Voluntary Compliance ............................................................................ 38 Cooperative Agreements............................................................................................... 38 State Actions ................................................................................................................. 39 Court Decisions............................................................................................................. 40 Conclusion .................................................................................................................... 40 What Wireless Means: Select Current Policy Issues.41 Consumer Protection Issues.............................................................................................. 41 Wireless ETC Issues ......................................................................................................... 42 ETC Background .......................................................................................................... 42 FCC Report and Order released March 17, 2005 ......................................................... 43 Interconnection Issues....................................................................................................... 45 Public Safety & E-911 ...................................................................................................... 45 FCC Wireless 911 Initiatives ........................................................................................ 46 Universal Service and Intercarrier Compensation ............................................................ 47 State Best Practices and Proactive Approaches.48 Overview........................................................................................................................... 48 Sample State Best Practices .............................................................................................. 48 Communicating with Consumers.................................................................................. 48 Establishing Dialogue with Providers........................................................................... 48 Building Expertise within Commission ........................................................................ 49 Resolving Consumer Contacts...................................................................................... 49 Fostering Cooperation Among Interested Parties ......................................................... 49 State Case Studies ............................................................................................................. 50 Arizona.......................................................................................................................... 36 California ...................................................................................................................... 51 Florida ........................................................................................................................... 37 Iowa............................................................................................................................... 39 Nebraska ....................................................................................................................... 39 New York...................................................................................................................... 39

7. 8. 9. 10. 11. 12.

North Carolina .............................................................................................................. 40 North Dakota................................................................................................................. 41 South Dakota................................................................................................................. 42 Tennessee...................................................................................................................... 42 Texas ............................................................................................................................. 44 Virginia ......................................................................................................................... 44

I.

Introduction

For approximately 228 million Americans,1 wireless telecommunications is a means by which they place and receive voice communications free of cables or cords and without being confined 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 sector encompasses 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 ubiquity raises many public policy issues that the wireless industry may have to address. The FCC regulates the entry of wireless voice providers and has essentially deregulated rates given the high level of competition in wireless. State utility agencies regulate the terms and conditions of service, if allowed by State law and policy. State utility agencies are generally concerned with how the wireless voice service impacts certain social issues, such as E-911, universal service, access charges, 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 and why it is, is what gave rise to this paper. Therefore, this papers objectives are: To explore the value that consumers place on their wireless devices through an overview of the wireless sectors impact beyond voice services, its economic importance and value to consumers, and its capacity for enhancing the deployment of broadband technologies. To discuss those policy issues for which regulators have concerns, such as consumer service, access and benefits, and public safety. To assess wireless regulation in light of the principles adopted by NARUC in its Telecom and Federalism White Paper, adopted July 2005 technological neutrality and core competencies of levels of government. To enhance NARUCs 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 consumers experience by facilitating wireless investment. To discuss non-regulatory solutions which offer reasonable perspectives in the federal policy debate and focus attention on important public policy issues.

http://www.ctia.org

Overview of White Paper This white paper addresses some key topics for regulators to consider regarding wireless communications: What is meant by wireless; what are the implications for consumers and the economy; 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 following sections: Section II: What Wireless Means Voice & Beyond - This section highlights a number of wireless technologies and applications that reach beyond cellular voice service. This section also explores the convergence of wireless device functionality. These concepts are important to understand because regulators must comprehend the structure and development of the industry in order to ensure that regulations are structured to benefit consumers 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. What Wireless Means Consumer and Economic Interests and Challenges - This section explores a range of consumer and societal interests and challenges in wireless technologies. This section also provides a brief overview of the economic impact of the wireless sector. What Wireless Means Select Policy Issues - This section identifies current policy issues relating to wireless products and services, and describes how different regulatory agencies the FCC, states, etc. have responded. State Best Practices and Proactive Approaches - This section discusses various State approaches with respect to wireless services. The paper explores certain State practices that NARUC believes most effectively furthers the goals of protecting the consumer and providing for the public welfare.

Section III:

Section IV:

Section V:

II.

What Wireless Means Voice & Beyond

Despite the overwhelming popularity of the cell phone and its entry into the communications sector as a voice device, wireless encompasses a great deal more than just the cell phone. Wireless includes promising wireless broadband technologies such as wireless fidelity (Wi-Fi), WiMAX, and next generation cellular networks along with a host of data applications (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 numerous technologies and applications that reach beyond traditional voice applications.

A.

Wireless Voice Technology

Wireless phones transmit telephone calls via a system of radio waves and towers or antennas.2 Because radio waves travel though the air and can be interrupted by any number of factors, 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 networks architecture. For example, the location of 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 carriers network at the same time, the networks capacity may be strained and a busy signal will result instead of call completion.6 Dead spots result when the signal between the handset and the cell tower is blocked, usually by hilly terrain, excessive foliage 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 broadband service as data transmission speeds exceeding 200 kilobits per second (Kbps), or 200,000 bits per second, in at least one direction. Users may use wireless PDAs to access the Internet, receive and send email, download video and music, and more. It has been predicted that [o]ver half of the population of North America will use wireless networking thats 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.
Understanding Wireless Phone Coverage Areas, FCC Consumer Facts, http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html 3 Understanding Wireless Phone Coverage Areas, FCC Consumer Facts, http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html 4 Understanding Wireless Phone Coverage Areas, FCC Consumer Facts, http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html 5 Understanding Wireless Phone Coverage Areas, FCC Consumer Facts, http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html 6 Understanding Wireless Phone Coverage Areas, FCC Consumer Facts, http://www.fcc.gov/cgb/consumerfacts/cellcoverage.html 7 Significant statistical information regarding wireless broadband deployment in each State is available through the FCCs 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 annually regarding their broadband service offerings. Most, if not all wireless broadband providers, file the Form 477 report with the FCC on a confidential basis. However, State utility commissions may obtain provider-specific information regarding 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). 8 Ray, Tiernan, Wi-Fis Promise may elude investors, Barrons Online, September 26, 2005.
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In 2004, approximately 1.6 million U.S. homes subscribed to wireless broadband.9 Though cable modem and DSL dominated the home broadband market that same year with a combined 46 million subscribers,10 wireless broadband can offer the unique advantage of mobility.11 Wireless services often times are more cost effective and efficient way to provide services to rural and sparsely populated areas. 2. Wi-Fi

Wi-Fi is a form of wireless broadband technology that involves multiple antennae that send parallel streams of data.12 Wi-Fi is a registered trademark term promoted by the Wi-Fi Alliance, 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 a result of Wi-Fis MIMO (multiple-input, multiple output) technology, Wi-Fis bandwidth has increased 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 the are within 300 feet of a transmitting antenna and have the appropriate receiving hardware installed 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 a continuous mesh network of wireless signals.17 In order to provide an initial connection to the Internet 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 less expensive than installing a wireline network of the same size.19 To this end, a growing number of 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

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 music downloading services for mobile phones; high speed wireless Internet access services for laptops, and video services enabling customers to watch video clips of television shows, sports, news, weather, and other content on advanced handsets. 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-Fis Promise May Elude Investors, Barrons Online, September 26, 2005. 13 Municipal Provision of Wireless Internet, FTC Staff Report (Federal Trade Commission, Sept. 2006) 14 Ray, Tiernan, Wi-Fis Promise May Elude Investors, Barrons Online, September 26, 2005. 15 Ray, Tiernan, Wi-Fis Promise May Elude Investors, Barrons Online, September 26, 2005. 16 Municipal Provision of Wireless Internet, FTC Staff Report (Federal Trade Commission, Sept. 2006) 17 Id. 18 Id. 19 Id.

Trade Commission (FTC) has noted, whether the long-term operating costs of such a wireless network 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 used for 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, DelOro Group, estimated that sales of Wi-Fi gear increased by 16% to $2.64 billion in 2005.23 Yet while Wi-Fi addresses broadband access in popular public locations, it does not provide true widespread 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 range26) than is covered by a Wi-Fi deployment,27 peak speeds of 20 Mbps,28 and is relatively cost-effective. In the words of Intels James 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 more users more quickly.29 With Nokia and Intels latest announcement of plans to make WiMAX a new standard,30 expansion of the technology appears to be likely. Intels backing, in fact, prompted the statement that broadband wireless looks like it might bust out of its niche and become something of a rival to cellular, cable and phone networks.31 Perhaps most notably, in 2006 Sprint-Nextel announced that it plans to spend as much as $3 billion through 2008 building a WiMAX network.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 services will likely address such drawbacks.33

20 21

Id. Tiernan, Ray, Wi-Fi's Promise May Elude Investors, Barrons Online, June 28, 2005. 22 Hotspot Statistics, http://www.wifinder.com/. 23 Tiernan, Ray, Wi-Fis Promise May Elude Investors, Barrons 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 hardware and 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 Street Journal, June 10, 2005; at p. B3. 31 Bill Alpert, WiMaxs Strong Signal, Barrons 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=12960 33 Bill Alpert, WiMaxs Strong Signal, Barrons Online, July 4, 2005.

4.

Wireless Local Area Networks (LANs)

A wireless local area network (LAN) is a type of local-area network that uses highfrequency radio waves rather than wires to communicate between nodes.34 Each node, which may 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 devices anywhere 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 email.36 LANs are only able to encompass relatively small areas, and most are confined to a single building or group of buildings.37 Forrester Research recently found that 25% of businesses in North America and Europe are deploying, or considering deploying, wireless local area networks (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 a WiFi hotspot.39 EVDO networks can be accessed with EVDO capable phones or by inserting an EVDO PC card into your laptop, which provides a wireless connection to the Internet at very fast speeds; average download speeds are between 400Kbps and 700Kbps.40 EVDO has many advantages. EVDOs signal can travel on the same cellular sites as cellular phones, there is no limited range from the cell tower or hot spot that must be accessed, users can gain access anywhere they can locate a secure, encrypted cellular signal, users can download and run video clips in real time, and EVDO can provide service to customers that are outside of traditional cable-modem or DSL areas.41 Verizon EVDO and Sprint EVDO are currently available.42 Verizon has indicated that it will invest $1 billion in EVDO over the next two years.43 At speeds of about 10 times the average dial-up speed (or 300-500 Kbps), Verizons EV-DO offering is being marketed at a flat rate to consumers and businesses in certain markets.44 6. Ultra wideband

Ultra wideband (also known as UWB or as digital pulse wireless) is a wireless technology used for transmitting large amounts of digital data over a wide spectrum of
34 35

Definition of local-area network, http://www.webopedia.com/TERM/l/local_area_network_LAN.html. Id. 36 Id. 37 Id. 38 Ray, Tiernan, Wi-Fis Promise May Elude Investors, Barrons 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 carry huge amounts of data over a short distance (up to 230 feet) at very low power, ultra wideband radio 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 a significant impact on electronic products in the future.48 According to a Dow Jones Newswire report, ultra wideband will be embedded in electronic products starting in 2006 to boost speed and data capacity so that consumers will be able to finally break free from the plethora of electric cords. In the initial stages, adapters will be available to connect existing electronic devices wirelessly, but as early as 2007, the technology will be included on some high-end cell phones and MP3 players to facilitate adapter-less beaming of music and video from their computers from 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 reach approximately 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 to replace the cables connecting portable and/or fixed electronic devices.51 The Bluetooth core system 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 data classes 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-inone phone that can double as a portable phone at home or in the office, get quickly synchronized with 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

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 wide spectrum (number of frequency channels) at the same time. Transmitter and receiver must be coordinated to send and receive pulses with an accuracy of trillionths of a second. On any given frequency band that may already be in use, the ultra wideband signal has less power than the normal and anticipated background noise so theoretically no interference 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; Page B4. 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 each device. 8. GPS

The Global Positioning System (GPS) is a grouping of twenty-four satellites that orbit the Earth 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 the equipment, but can be pinpointed to within one (1) meter when special military-approved equipment is used. GPS equipment is widely used in science and has become increasingly affordable permitting almost anyone to own a GPS receiver. The US Department of Defense owns 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 the electromagnetic spectrum to uniquely identify an object, animal, or person.57 An RFID system has three components: an antenna and transceiver (often combined into one reader) and a transponder, sometimes referred to as the tag.58 The antenna transmits a signal over radio waves and activates the transponder.59 Once activated, the tag transmits data back to the antenna.60 RFID is increasingly being used as an alternative to the bar code that has the advantage of not requiring direct contact or line-of-sight scanning.61 RFID tags are also used to track assets, manage inventory and authorize payments, and they increasingly serve as electronic keys for everything from autos to secure facilities. 10. Biometrics

Biometrics is a method of verifying an individuals identity based on physical features like fingerprints or iris patterns.62 Biometrics has emerged in the wireless industry as a result of growing 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 potential to secure networks and data without placing any responsibility on the user.65
55 56

Bluetooth definition, http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci211680,00.html. GPS definition, http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci213986,00.html 57 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 biometrics examines 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 continue to 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 requiring users to remember numerous passwords.68 In addition, retailers using products like onClicks DigiPad, which records signatures, have increased the use of biometrics.69 Although some believe that signing an electronic pad results 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 of the actual signature. 70 11. 3G Technology

3G technology is an industry standard for third-generation (3G) wireless networks. The 3G standard, called International Mobile Telecommunications-2000 (IMT-2000), consists of five operating 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 highspeed packet data access, and it is the preferred technology for 3G.72 3G technologies hold much promise and might give cellular-enabled devices an edge over 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

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, a fingerprint is physiological, but according to Joseph Kim, associate director of consulting at International Biometric Group, 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 wireless Internet 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, Cingular launched its High Speed Downlink Packet Access (HSDPA) technology in 16 cities on December 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 Verizons VCast broadband multimedia service.75 Still other carriers have deployed networks supporting higher-speeds and new applications, and more investment is occurring. 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, Motorolas canopy network solutions now deliver 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 and offer 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 voice service. 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 video downloads, 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 camera sales, 12% of US households have camera phones.79

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; San Jose, 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, at Table 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 Jerseys Telecommunications Future, K. Dane Snowden, CTIA, May 20, 2005.

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In 2004, U.S. wireless subscribers downloaded approximately 250 million ringtones, 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 to cellular subscribers who opt-in to receive text message alerts with information about children abducted in the subscribers region.83 Sirius and XM, rival satellite radio offerings, have expanded beyond car stereos and into homes, offices, and portable devices. In June 2005, Sirius Satellite Radio agreed to the use of Sprints wireless network to offer some music channels to Sprint customers later that year.84 Multiple wireless carriers now offer XM satellite channels over their network to their subscribers as well. Jupiter Research predicts that over the next five years, the wireless gaming market in North America will increase tenfold, becoming a $4.1 billion industry.85 Napster and Ericsson have joined forces to develop a wireless version of Napsters online music service to deliver full-length songs to wireless phones and make it available to wireless carriers around the world.86 Verizon Wireless offers Timecard, an application developed by ECONZ Wireless that allows remote employees to clock in and out via their wireless phones and transmits 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 dial into the automated system via their wireless phones, enter the assigned parking space number, and call back on exit to end the billing cycle and have the transaction billed to their credit card.88

80 81

USA Today, June 10, 2005 Michael Finneran, Wireless Outlook for 2005 Business Communications Review, January 1, 2005; page 2. 82 See http://telephia.com/html/documents/Device_ReportVideoCapabilityv4F.pdf 83 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, Associated Press, 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 as to content providers. For example, CTIA The Wireless Association reports that wireless data revenues are rising each year, with 70% growth from 2005 to 2006.89 The Yankee Group projects that wireless data applications will account for 13% of the wireless industrys 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 inspired entrepreneurs and entertainment titans alike are in a mad rush to develop songs, graphics, games and 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. One website, 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 in this section are not meant to be an exhaustive list of the products available to consumers, but rather 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 when indoors. 95 In mid-2006, T-Mobile introduced its HotSpot@Home dual-mode, Wi-Fi device in limited markets.96 HotSpot@home is based on Unlicensed Mobile Access (UMA) technology, which permits wireless operators to offer familiar GSM services over unlicensed spectrum using WiFi technology.97 HotSpot@Home requires a dual mode GSM/WiFi handset and a broadband connection.98 T-Mobile currently offers two sleek handsets and a WiFi access point optimized for 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 phone may be high.101 Although analysts say TV on mobile phones is at least two years from reaching a mass U.S. audience, the technology has already established a presence in Europe and Asia.102 Telephia reports that more than 2,000 mobile video titles are available to US wireless subscribers.103
89 90

Business & Technology Trends Driving Voice, Video and Data Services, Carolyn Brandon, CTIA, June 2005. 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, Barrons Online, June 28, 2005. 96 Kharif, Olga T-Mobiles Trial Balloon, August 14, 2006 97 Briefing for Commissioner Philip Jones, T-Mobile HotSpot@Home, November 27, 2006 98 Id. 99 Id. 100 Id. 101 Tiernan Ray, Wi-Fi's Promise May Elude Investors, Barrons Online, June 28, 2005. 102 Seyfer, Jessie, Television is coming to cell phones, The Mercury News, October 3, 2005. 103 Telephia, FromBorat 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 be watching video on their mobile phones, generating about $4.7 billion in annual revenue for the tech industry.104 2. Smartphones

A smartphone is any electronic handheld device that integrates the functionality of a mobile phone, personal digital assistant or other information appliance. This is often achieved by adding telephone functions to an existing PDA or putting smart capabilities, such as PDA functions, into a mobile phone.105 The following are some examples of the variety of Smartphone devices and functions to which consumers have access. T-Mobile USA and Research In Motion (RIM) announced the availability of the new BlackBerry 7105t together with a new BlackBerry Internet E-mail service for Yahoo e-mail users.106 Users of the BlackBerry 7105t will be able to access their Yahoo e-mail accounts directly 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 Bluetooth technology, speakerphone capabilities, wireless e-mail, text messaging, a web browser, instant messaging, an organizer, and RIMs 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. The Palm Treo 650, 700w, and 700p are all currently available. In addition, Research in Motion has announced that it is developing e-mail software that is similar to that of the BlackBerry for the Palm Treo, providing the Treo with even more options. Hewlett-Packards 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 Positioning System receiver, Microsoft Pocket Streets mapping software, 64MB of ROM and 64MB of RAM.110 The iPaq hw6515 also includes pocket versions of Microsoft Office programs, making it 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 can install additional applications to the device. The applications can be developed by the manufacturer of the handheld device, 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 Apple Computers hugely popular iTunes organizer. The phone, which is being sold through Cingular Wireless, stores up to 100 songs. The Motorola Rokr E1, a bar-style tri-band GSM phone, also features built-in stereo speakers, a VGA camera with flash, Bluetooth, microSD (TransFlash) memory card slot, speakerphone, and an airplane mode.112 Samsungs SGH-E750 and SGH-E760 tri-band handsets follow Samsungs wellestablished clamshell design and are equipped with a 1.3 Megapixel camera, a digital compass and gesture recognition for mobile gaming. The Samsung SGH-E750 camera also comes with an integrated flash, with the SGH-E760 including a digital power amp and twin speakers for enhanced audio. In addition, Samsungs phones can wirelessly stream MP3 music via Bluetooth to 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 have a Blackberry e-mail server,114 and with the companys recent addition of 592,000 customers in its 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. For example, Good Technology, Inc. is competing against the dominant Blackberry by targeting corporate customers and making its software product, GoodLink, available on devices other than the 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 by 12,000 enterprises worldwide117 and is reportedly competing with Blackberrys perceived weakness 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 mobile technologies. For example, the Palm TX is equipped with an integrated Wi-Fi chip and 100MB of 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

Phonescoop website, Motorola ROKR E1, http://www.phonescoop.com/phones/phone.php?p=777. 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, 2006 118 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#).
113

112

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the SD I/O, SD, and multimedia card (MMC) formats, and a 320-pixel by 480-pixel screen.120 The Palm TX also includes DataVizs Documents To Go software for creating and editing files and is compatible with MobiTVs application that will allow users to watch live television on handheld devices.121 The Palm Z22 is equipped with a color screen and 20MB of user-accessible flash memory. 122 The Z22 is very inexpensive (said to be cheaper than buying a paper organizer and refilling it every year with the new calendar) and appropriate for persons who do not need a WiFi connection. 123 5. Laptop Computers

Wireless technologies are increasingly becoming standard features in laptop computers. Consider the following examples of manufacturers who are adding features that can be used with wireless technologies. For example, in the U.S., Dell customers can purchase Latitude D620 and D820 laptop computers equipped with Verizon or Cingulars 3G as well Wi-Fi technologies for wireless data capabilities.124 4G Mobile and the Dubai based i-mate have launched the worlds first Windows Mobile 5.0 mini laptop phones in India.125 Jasjar, K-Jam, PDA handset, JAM and SP3i are the five products that were launched in the Indian market.126 The mini laptop phone known as the Jasjar has a 520 MHz Intel processor, 128 MB of permanent memory and Internet telephony software allowing the user to browse through the Internet at high-speed.127 The model known as K-Jam has a 1.3 mega-pixel camera, is EDGE enabled and has a 2.8 TFT Transfelctive LCD and mini USB, allowing the user to enjoy advanced PDA functions. 128 In addition, Hewlett-Packard recently expanded its notebook line to include new models for the HP Pavilion dv1000 series entertainment notebook, which will include a built-in Webcam.129 The HP Pavilion dv8000 series will include Microsoft Windows XP Media Center, which is designed to allow users to watch, record and pause live TV, as well as edit and share digital content.130 In addition to a wireless keyboard, mouse and remote control, Hewlett-

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#). 121 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#). 122 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#). 123 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#). 124 See Dell Press Release, Slimmer, Lighter and More Powerful Dell Notebooks Deliver Better Connectivity, Security and Durability/Next-Generation Design, Features Driven by Business Customers Requirement (March 29, 2006) 125 First mini laptop phone introduced, International Reporter, October 21, 2005, (http://us.internationalreporter.com/news/read.php?id=743). The phone may be used anywhere in the world. Id. 126 Id. 127 Id. 128 Id. 129 Kawamoto, Dawn, HP expands digital-entertainment offerings, CNET News.com, January 4, 2006. 130 Kawamoto, Dawn, HP expands digital-entertainment offerings, CNET News.com, January 4, 2006.

120

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Packards new Pavilion Media Center m7300n series Photosmart PC will offer Wi-Fi connectivity.131 With the application of biometrics technology, some laptop computers are now equipped with 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 reader that linked to an embedded security subsystem to provide built-in security.133 The company noted that 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 the consumers experience with electronic devices. The Bluetooth Media Player Headset is an adapter that sits between headphones and any audio/media player (CD/DVD/MP3) and provides wireless Bluetooth headset functionality. The Bluetooth Media Player Headset enables a user to answer 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 the world to integrate mobile, wireless and audio technologies into a multi-purpose entertainment device. In addition to the basic profiles, the key profiles supported are A2DP, Headset profile and Handsfree profile.136 With the Bluetooth Media Center MMV-200 plugged into a users stereo, music stored in the users mobile phone can be transferred wirelessly to the loudspeakers. The Bluetooth Media Center MMV-200 can also be connected to a TV and beam Mega pixel images and video clips from the users mobile phone to the screen. Memory cards (from a phone, PC or digital camera) can be inserted directly into the MMV-200. The consumers phone functions as a remote control.137 The Bluetooth PowBOXTM is a portable wireless communication device built on Bluetooth & Audio Entertainment Platform. This integrated device includes the Bluetooth Headset/Handsfree Function, MP3 Player, FM Radio, Voice Recording, Sharing Headset and Bluetooth files transfer Memory Storage. It can work alone with all Bluetooth Qualified Products and is compatible for Windows based computers with the USB interface.138
Kawamoto, Dawn, HP expands digital-entertainment offerings, CNET News.com, January 4, 2006. 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,
132 131

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7.

Digital Cameras

Digital cameras are also incorporating wireless technologies to increase consumer experiences. For example, Kodaks EasyShare-One zoom digital cameras now allow digital pictures to be sent by e-mail directly from the camera, without cables and without access to a computer.139 The camera is equipped with a pop-up Wi-Fi card that makes it possible to share pictures wirelessly.140 However, in order to send pictures wirelessly, the EasyShare-One must access a Wi-Fi network or a public hot spot.141 Although the camera does not contain an Internet browser and, therefore, cannot connect to a Wi-Fi hot spot that requires authorization, Kodak is partnering with T-Mobile on developing a plan in which camera buyers take advantage of TMobile hot spots. 142 The Kodaks EasyShare-One zoom has the picture-taking ability of the 4megapixel, 3X optical zoom Kodak and video capability. In addition, the camera has 256 megabytes of internal memory that allows the camera owner to store and organize up to 1,500 photos.143 Hewlett-Packards recent additions to the HP Photosmart digital cameras line include cameras that have a button for ordering and sharing photos through Snapfish, Hewlett-Packards online photo service.144 Snapfish has designed a system that will allow users to access, review, store, and share digital videos from their cell phones and digital cameras.145 The service uses technology designed to convert most digital video formats into a common one that can be played through most Internet browsers.146 8. M-Commerce Major Component of Wireless Sector

As the role of wireless devices continues to shift from purely communicational (voice) to transactional, mobile-commerce (m-commerce) will become an increasingly important tool for businesses to reach consumers.147 By 2007, according to ARC Group, approximately 546 million users will spend close to $40 billion on mobile commerce.148 M-Commerce offers a number of applications that may appeal to the mobile consumer. Using wireless devices, consumers have the ability to: Purchase items instantly in the retail sector. Perform financial transactions such as transfers, bill payments, and security trading with banking institutions.

http://www.bluetooth.com/Bluetooth/Connect/Products/Product_Details.htm?ProductID=1708. 139 Baig, Edward, Kodak lets you snap then e-mail shots without any wires, USA Today, October 12, 2005. 140 Id. 141 Id. 142 Id. 143 Id. 144 Kawamoto, Dawn, HP expands digital-entertainment offerings, CNET News.com, January 4, 2006. 145 Kawamoto, Dawn, HP expands digital-entertainment offerings, CNET News.com, January 4, 2006. 146 Kawamoto, Dawn, HP expands digital-entertainment offerings, CNET News.com, January 4, 2006. 147 Steve Schone, The New Anywhere, Anytime Sales Channel, Computer Technology Review, October 1, 2004. 148 Steve Schone, The New Anywhere, Anytime Sales Channel, Computer Technology Review, October 1, 2004.

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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 also are looking for opportunities to add consumer value in a manner that generates additional sources of revenue, especially as average revenue per user (ARPU) for voice products continues to decline in the face of increasing competition.152 Industry data indicates that the average ARPU has 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 mcommerce.154 A survey by ForceNine Consulting and Wirthin Worldwide showed that customers have already exhibited a willingness to pay for the extras. Consider that 40% of U.S. adult mobile consumers who use non-voice applications on their phones pay additional charges for such services, and given the trends observed in other countries, the opportunities for mobile content providers will grow as consumers eventually move from personalization applications such as ringtones to more complex applications such as interactive java games.155 Handset manufacturers are focusing on the expansion of m-commerce. For example, in May 2005, NTT DoCoMO, a leading mobile communications operator in Japan, and its eight regional subsidiaries announced five new wireless phone models equipped for mobile wallet emoney, ticketing and other handy mobile smart-card functions.156 Though the underlying FOMA (freedom of multimedia access) service on this new series of mobile wallet handsets is currently only available to subscribers in Japan, it is a sign of things to come for other countries such 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 social and economic development of the country as a whole. Part A of this section addresses some of
Steve Schone, The New Anywhere, Anytime Sales Channel, Computer Technology Review, October 1, 2004. 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 and Analysis 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.
150 149

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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 nations economy. A. Consumer and Societal Interests and Challenges 1. Current FCC Data Regarding Extent of Wireless Industry Competition

The FCCs Eleventh Annual Report and Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services (Eleventh Report), released September 29, 2006, noted that, with respect to carrier conduct, competitive pressure continues to drive carriers to introduce innovative pricing plans and service offerings, and to match the pricing and service innovations introduced by rival carriers.158 The FCC stated, Consumers continue to pressure carriers to compete on price and other terms and conditions of service by freely switching providers in response to differences in the cost and quality of service.159 The FCC report went on to say [I]ndicators of market performance show that competition continues to yield significant benefits to consumers.160 As an example of the wireless markets competitiveness, consider that there are approximately 183 facilities-based wireless carriers that serve some portion of the U.S. This includes four national carriers, such as Verizon Wireless, and many more regional and local carriers, and numerous resellers or Mobile Virtual Network Operators (MVNOs), such as Virgin Mobile USA.161 Some 94% of Americans have a choice of four or more wireless carriers, and approximately 98% can choose from at least three.162 While many consumers have an ability to choose from a number of carriers, competition among the carriers continues to grow.163 The advent of pre-paid cell phones gives consumers the ability 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. consumers continue to benefit from robust competition in the CMRS marketplace with demand increasing for both voice and data services165 as mobile carriers continue to build out their networks and expand service availability, including deployment of technologies that allow them to offer mobile Internet access services.166 Prices for wireless services have continually declined. In 2004, the average wireless bill was $38.71, a 42.5% decline from the 1993 average bill of $67.31.167 Many plans no longer
10th Annual CMRS Competition Report, REPORT (FCC 05-173), 9/30/2005 Id. 160 Id. 161 Expanding the Wireless Frontier: Shaping New Jerseys 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, 2006 163 Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report and Analysis 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 Jerseys Telecommunications Future, K.Dane Snowden, CTIA,
159 158

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charge for roaming or long distance. In fact, the FCC reported a 13% decrease in the price per minute in 2003.168 The Eleventh Report noted that [e]quity analysts and other industry observers 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 customers continues to accelerate, the likelihood of switching providers among those most dissatisfied with their recent retail purchasing experience has increased 46% from 2004.171 A slowing penetration rate means that the wireless industry may become increasingly competitive for retailers as fewer new customers enter the market.172 In comparison, we should also note that wireless subscribership is growing faster than, and currently double the number of, Internet subscribership around the world.173 According to a study by Kagan Research, there will be 273.8 million 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 with one another in an infinite number of ways. Many of the wireless technologies consumers use today to keep in touch with one another are obvious. For example, cell phones allow us to communicate with friends, family, neighbors and other members of the community at almost any time 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 make contact with others in an instant.

May 20, 2005. 168 Expanding the Wireless Frontier: Shaping New Jerseys 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 and Analysis 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 Jerseys 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 2005 Wireless 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 are 25 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 from national electronic retail outlets such as Best Buy and Radio Shack, which offer wireless service. Id. quoting Kirk Parsons, senior director of wireless services at J.D. Power and Associates. 173 Expanding the Wireless Frontier: Shaping New Jerseys 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 has made possible that are not as readily apparent. For example, satellite technology enables local non-profit groups around the country to participate in various forums or meetings facilitating the exchange 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 to simultaneously participate electronically in courses, forums, and/or town meetings.175 The events take place in Washington, but they are beamed via satellite to conference rooms across the country.176 The individuals participating in the event from remote viewing sites can observe and communicate with the participants in Washington as well as other remote locations. The result is a series of conversations on civic and community issues that involve people all across the United States.177 The topics discussed during these forums include how to mobilize community assets, how to develop leadership in divided communities, as well as the fundamentals of collaborating in small and large communities.178 b. Education

E-learning has changed from a technological curiosity to an integral part of rural public school 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 types of 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 public schools located in rural and urban areas. An examination of the number of school age children living in rural areas reveals its importance. Statistics show that almost one third of this countrys 48 million public school students and 43 percent of this countrys public schools are located in rural communities.180 Today, with the spread of advanced technology, groups of isolated schools in more than a dozen statesincluding Minnesota, North Carolina, and Oklahomacan share qualified teachers in 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 advanced degrees or professional certification through distance learning.182 Students also receive individual assistance when needed, despite the physical distance from their instructors. Instructors offer small early-morning study groups through the videoconferencing system and contact students on the phone or via e-mail if they seek individual help.183
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 established new certification standards for teachers and classroom aides by requiring them to be highly qualified in the subjects they 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 speed data networks. For example, HPWREN, the High Performance Wireless Research and Education Network, is attempting to help bridge the digital divide by delivering high-speed Internet connectivity to several remote communities in California.184 HPWREN has most recently connected the Santa Rosa Native American reservation, which is located in southeastern Riverside County. HPWRENs first wireless link to the Native American community involved the 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 an incredible 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 Jolla reservations are now also connected to the HPWREN.186 c. Rural Consumers

Many remote residences, businesses, communities and communities located in difficult and 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 limitation or outside the footprint of a cable telecommunications company. Some remote communities still lack basic phone service. Wireless broadband may be an effective option in these types of situations. As USA Today reported, improved wireless technology has allowed several thousand mostly small Internet providers across the USA to cheaply deliver broadband to remote areas via antennas on hilltops, barns and homes.187 Indeed, wireless service providers are spending 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 In addition, as discussed above, municipalities, including many in rural areas, are increasingly deploying broadband technologies to provide broadband services to their residents. As wireless technologies eliminate the need to run physical wires, community connectivity to the Internet, or a high-speed backbone network, may be obtained through a wireless back haul that can cover dozens of miles. In addition, the minimal costs for construction and equipment acquisition, along with the ease of configuration and maintenance,
http://hpwren.ucsd.edu/education.html. 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, but soon all 18 San Diego County reservations will have a network connection - thanks to the recently formed Southern California Tribal Chairmen's Association (SCTCA) Tribal Digital Village Network (TDVNet), which is funded by Hewlett 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 and incremental 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. Robert Roche. Wireless Industry Indices Report: Mid-Year 2006, November 2006 at www.ctia.org
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represent a true sea change in technology, and provides the means for rural communities not only to catch up to their metropolitan counterparts, but to surpass them in the availability of bandwidth. For once, rural America can be a technology leader.189 One example of the benefits of wireless technology for rural consumers is in home health care. As Kenneth Schlager discussed, wireless broadband communications networks increase the productivity of rural home healthcare by providing higher quality care at lower cost. He added that video teleconferencing coupled with computer server-based communications and resource management provides the foundation for a renaissance in rural home health care. 190 d. Business Consumers

Wireless technologies offer businesses the ability to reduce costs and improve communications with employees, clients, customers, and suppliers. It is generally reported that businesses have increased productivity by providing remote employees with wireless access to information and databases. Similarly, cost reduction goals are achieved as paperwork, timesheets, and memos are delivered to mobile devices. Communication with traveling employees or employees working in distant offices has improved through the use of teleconferencing and videoconferencing, and e-mail has enabled documents and information to reach employees anytime and anywhere. Wireless technologies are also helping businesses in many ways that may not be commonplace. As one example, wireless technology can provide assistance to businesses by helping them locate or track equipment and inventory. Consider that C and C Marine Services Company, a major barge company, now utilizes this type of wireless application to allow its headquarters to communicate directly with its fleet of 223 barges.191 The managers were having difficulty determining the exact positions of the Companys barges, and, therefore, they were unable to efficiently schedule the barges for additional work, barges were under-utilized and customers were not served effectively. The solution was a wireless application that provides continuous GPS-based location data and allows communication between the fleet and company headquarters.192 Now the company instantly knows the position of barges in its fleet and can schedule them more effectively, decreasing downtime and response time to customer requests while increasing sales.193 e. Special Needs Consumers

A number of wireless technologies focus on increasing accessibility and assistance for special needs consumers. Some of the products and services that have already shown the ability to effect the methods of communication for special needs consumers are described below.
Appalachian Regional Commission, Wireless Broadband Access in Appalachia, http://www.arc.gov/index.do?nodeId=1813 (last visited Feb. 11, 2006). 190 Posting of future Kansas to http://www.ruraltelecon.org/dp/node/367 (Oct. 10, 2005, 21:31 EST). 191 Wireless Broadband Access in Appalachia, ARC Online Resource Center, http://www.arc.gov/index.do?nodeId=1813. 192 Id. The wireless application was developed with help from the Carnegie Mellon University e-commerce practicum. Id. 193 Id.
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Mobile Captioning System A mobile captioning system developed at the Georgia Tech Research Institute uses wireless technology to provide captioning for the approximately 10% of Americans who are deaf or 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 individuals PDA or laptop using Wi-Fi technology, which is already installed, in numerous public places where events such as government meetings or sporting events are typically held. The technology also has uses for hearing individuals, such as for transmitting statistics at a baseball game or for translating 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 Device or 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 special device at both ends of the conversation and work by allowing people to type messages back and forth to one another instead of talking and listening.197 When a TTY device is used in conjunction with a TTY-compatible wireless phone, customers with speech and hearing disabilities can communicate wirelessly.198 For example, T-mobile and Cingular both offer a wide selection of phones that are TTY compatible.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 with hearing disabilities to communicate. The benefits of such services to the hearing disabled community are immeasurable. In the context of 9-1-1, a TTY compatible mobile phone allows an individual to communicate on his or her own TTY with TTYs located at the Public Safety Answering Point when calling emergency services.200 TTY Compatible Devices T-Mobiles SideKick, a popular device, is common among the hearing impaired because the 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 type devices such as PocketPC, Palm, Treo and Nokia are providing similar services. However,
Jane M. Sanders, Virtual Voices, Research Horizons, Winter 2005. 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 help to telecommunications services and do not allow text pagers. California is a State that has released a rulemaking considering whether text pagers might be allowed for deaf and disabled consumers who desire it. Relay Services Many TTY users can employ a process called relay.202 The relay process utilizes an operator to translate text in order to have a phone conversation with a hearing person.203 Persons with hearing disabilities can now access the Internet and make free operator-assisted phone calls from Web sites such as www.sprintrelayonline.com.204 Sprint Relay Wireless, powered by GoAmerica, is available as an addition to the TMobile Sidekick and provides access to relay services.205 Sprint Relay Wireless was designed for the T-Mobile Sidekick and allows hearing impaired persons to utilize relay services from a mobile 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 Internet connection, and there is no need for traditional TTY equipment. Sprint Relay Online is a free service that combines traditional relay service with the ease of the Internet allowing disabled individuals to communicate on the go. 209 Video Relay Video relay involves the use of a computer and a video camera connected to the Internet to make telephone calls.210 The hearing disabled caller uses sign language to communicate with an operator through the Web-cam; the operator then translates to the hearing person on the other end of the call.211 The operator then translates the hearing persons response into sign language.212 Video relay allows people to communicate at a much faster speed and is a much smoother mode of communication.213

Id. 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 the Deaf (CSD) and enables American Sign Language (ASL) users to communicate using facial expressions and body language cues. Through the use of full-motion video, words and phrases are conveyed along with facial expressions and body language cues to ensure that nothing gets lost 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 utilize TTY/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 combines real-time captioning and voice relay service to provide conference calls for deaf and hard-ofhearing people. RCC services can be accessed from any Internet-connected computer and allows the 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 to the hearing impaired community as the number of conference calls increase as a result more workers 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 new assistance and accessibility to individuals with visual disabilities.219 TALKS by Cingular Wireless is essentially a speech-enabling software that basically transforms the Nokia 6620 cellular handset into a talking mobile phone.220 The TALKS/ Nokia 6620 combination will allow persons visual disabilities to, inter alia, hear incoming Caller ID, know the phones signal and 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 visually impaired, 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 buttons on its keypad.223 With the Owasys 22C every function speaks, including the caller ID, battery and signal strength, phonebook, call logs, and configuration menus.224 It is also equipped with a speaker phone that only the operator of the phone can turn on.225 This feature provides privacy
214 215

www.sprint.com/business/products/sections/relayServices.jsp. 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 turned on.226 f. Improved Healthcare Telemedicine

Wireless technologies also have a number of applications in the health-care arena. Nonvoice 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 wireless medical monitoring devices.227 In addition, activities of those confined to wheel chairs can be monitored with wireless devices that record how individuals shift their weight, and this information may be used to promote healthy skin.228 Wireless medical record systems, especially those utilizing Wi-Fi technology, allow medical staff to access and update records and make orders at the point of care.229 Such actions reduce errors and delays, improve efficiency and fit into the medical staffs 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 be available 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 can then be rolled from bed to bed and ward to ward as necessary. Wireless tablets and sometimes PDAs often supplement these laptops, either to provide staff with a dedicated device or for use in other medical activities. 233 Wireless medical record systems are also inexpensive to deploy, costing a few percent of the total budget of an electronic medical records (EMR) system.234 Ohio State University (OSU) Medical Center, a teaching hospital in Columbus, Ohio; St. Vincents Hospital in Birmingham, Alabama; Memorial Medical Center in Springfield, Illinois, and St. Johns Hospital in Springfield, Illinois have all deployed wireless medical records systems. 235

Owasys Wireless Devices, http://www.screenlessphone.com. 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 with Disabilities, 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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The Lifenet Medtronic system is a system that utilizes wireless Bluetooth technology to link cell phones to cardiac monitors in the field, which in turn links ambulances with local hospitals. Using Lifenet, doctors are able to save critical time by making a diagnosis and being prepared to operate as soon as the patient arrives at the hospital. 236 Video cameras and wireless laptop computers are also aiding those who have had strokes. Local hospitals now have the ability to set up video camera systems that are linked to distant hospitals and experts.237 The wireless laptop allows the expert to view all scans and tests with a near perfect view and make an early diagnosis.238 This process speeds treatment to the patient and saves critical time. g. Disaster Relief

In most cases, cellular or PCS wireless phones are an essential element in coordinating and providing emergency relief when a natural disaster renders useless traditional wireline communications. This was particularly evident in the wake of Hurricane Katrina, which decimated traditional communications networks. A columnist for the Chicago Sun-Times, who traveled with two guardsmen into the floodwaters of New Orleans after Hurricane Katrina struck, reported that it was clear the cell phone is among the most important tools the guardsmen bring with them.239 Cell phones were used to pass along orders and commands and one guardsman stated that [i]ts just easier to talk on cell phones than walkie-talkies. Without cell phones wed have to run back and forth between trucks. 240 The ability to use cellular phones in the wake of a natural disaster can be compromised, however, if the cellular communications infrastructure is damaged. In those situations, satellite technology can fill the gap. When electricity, Internet connections, and cellphone towers [are] lost . . . satellite phones become the only way officials and emergency workers could communicate.241 Satellite phones work by beaming their signals to satellites that are orbiting the Earth, and the satellite then sends them back down. 242 Since satellites are not damaged by natural disasters, satellite phones can be used in emergencies when regular cell phones cannot. Satellite phones also work in remote locations where other communications tools are useless. 243

Gruman, Galen, Wireless: Just what the doctor ordered, CIO Magazine, August 1, 2003, (http://www.cio.com/archive/080103/mobile.html). 237 Clark, Cheryl, Diagnosis by laptop extends medicines reach, SignOnSanDiego.com, February 5, 2004. 238 The camera is so good, we can see the patients pupils and watch his eye movements. Id. 239 Mitchell, Mary, Where military goes, so do the cellphones, Chicago Sun-Times, September 13, 2005. 240 Mitchell, Mary, Where military goes, so do the cellphones, Chicago Sun-Times, September 13, 2005. 241 Reed, Keith Reed, Satellite phones likely to remain niche player, The Boston Globe, October 3, 2005. 242 Reed, Keith Reed, Satellite phones likely to remain niche player, The Boston Globe, October 3, 2005. 243 Reed, Keith Reed, Satellite phones likely to remain niche player, The Boston Globe, October 3, 2005.

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An emergency management communications system has been developed by Globalstar LLC for this purpose.244 Globalstars emergency management communications system (GEMCOM) consists of a satellite backhaul network mated to a miniaturized cellular system that allows first responders to communicate with each other, or connect to the public telephone network via Globalstar. 245 Globalstar satellite phones are built into the portable unit and give emergency workers access to critical information when land-based communications are unavailable, such as during and after a disaster and in remote locations. 246 GEMCOMS utilizes standard cell phones and provides emergency workers with the ability 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 an approximate half-mile radius. In addition, traditional wireline telephones can be connected to GEMCOMS through standard telephone jacks. 248 A spokesperson for the National Communications System said that the GEMCOM units are definitely needed . . . We received the unit 12 hours in advance of Hurricane Rita. Fortunately, damage from Rita was minimal, and we have deployed the GEMCOMS to St. Bernard parish which was hardest hit in New Orleans.249 h. National Security

Wireless technology has become increasingly important to National Security strategic initiatives. In fact, wireless technologies are currently being used in the field of biometrics, for facial and iris recognition programs, and for transmitting real time video from crime databases onto a wireless device for remote access.250 The Federal Bureau of Investigation (FBI) has said that national crime rates are declining and telematics played a large role in curtailing the tide of previous years.251 FBI agents use mobile briefcases that contain mobile computing capabilities, including laptops, GPS capability, and wireless communication devices. 252 Fast dissemination of information to

Globalstar Develops Wireless Emergency Management Communications System, Telematics Journal, October 7, 2005, (http://www.telematicsjournal.com/content/topstories/938.html). 245 Globalstar Develops Wireless Emergency Management Communications System, Telematics Journal, October 7, 2005, (http://www.telematicsjournal.com/content/topstories/938.html). 246 Globalstar Develops Wireless Emergency Management Communications System, Telematics Journal, October 7, 2005, (http://www.telematicsjournal.com/content/topstories/938.html). 247 Globalstar Develops Wireless Emergency Management Communications System, Telematics Journal, October 7, 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, October 7, 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 to vehicles, the FBI prefers the briefcase setup as it allows maximum flexibility use in any vehicle or anywhere in the field. Id.

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agents on the street, and with State and municipal law enforcement and first responders is critical in 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 wireline telephones 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 subscribers that opt in to receive the geographically specific Wireless Amber Alerts.254 The hours immediately following the abduction of a child are critical to the childs successful recovery. Wireless AMBER Alerts will be an invaluable tool in the search process by quickly distributing the emergency information to a large number of people. Since more than 60 percent of Americans 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 OnStars in-vehicle safety, security, and information services use GPS satellite and cellular technology to link the vehicle and driver to the OnStar Center. 257 The OnStar in-vehicle safety and security system provides many services to help protect drivers on the road.258 Such services include automatic notification of airbag deployment, remote door unlock, emergency services, stolen vehicle assistance roadside assistance and accident assistance. 259 While the OnStar center can communicate directly with the driver in the event of an emergency, it is also capable of pinpointing the location of the car and can dispatch local emergency units to assist. j. Anti-theft Measures

Specific wireless technologies are being used to prevent theft and ensure personal security. For example, LoJack is a vehicle recovery system that allows police to track and recover stolen vehicles.260 LoJack operates based on wireless radio frequency technology via a unit 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,

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, the FBI 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 the silent signal from the LoJack device from the ground or the air.261 In addition, biometric features are being integrated into Hewlett-Packard PDAs, IBM ThinkPads, 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 prevent theft. Retailers are using products like onClicks DigiPad, which records signatures and tracks behavioral biometrics, recording the speed, pressure, and style of writing rather than the loops of the actual signature.263 B. Economic Interests

The wireless industry represents a key component of the nations economy. A recent study 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 generated approximately $118 billion in revenues in 2004265 and contributed $92 billion to the U.S. Gross Domestic Product (GDP) in 2004.266 During the same period, the study showed that the wireless industry paid approximately $63 billion in fees, taxes and levies to federal, State and local governments,267 and the use and availability of wireless telecom services and products created an approximately $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 wireless telecommunications services.269 Wireless carriers have invested approximately $200 billion nationwide. Even as wireless prices and average revenue per user (ARPU) are decreasing, the wireless industry continues to invest heavily in its network. 270

Id. 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 willing to pay for a service and what they are actually paying for it. 269 Id. at p. 5. 270 Expanding the Wireless Frontier: Shaping New Jerseys 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 of 2,390 in 2003 (not including unlicensed wireless, Wi-Fi, or UWB patents, which are 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 more efficient 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 handheld computer. An estimated 616,000 healthcare professional are already using wireless 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 prices decline and productivity gains will generate over $600 billion in additional GDP.277 Further, the use and supply of services and handsets is expected to generate over $450 billion in additional GDP 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 industry had achieved 190 million digital subscribers,279 and today, they have surpassed 97% digital networks 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 more advanced mobile applications.

271

Expanding the Wireless Frontier: Shaping New Jerseys Telecommunications Future, K.Dane Snowden, CTIA, May 20, 2005; see also Roche, Robert F., Ph.D., Whats Up With Wireless? Camp NARUC Michigan State University, 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, April 2004, (http://files.ctia.org/pdf/CMRSINNOVATIONmar04.pdf). 280 Expanding the Wireless Frontier: Shaping New Jerseys Telecommunications Future, K.Dane Snowden, CTIA, May 20, 2005. 281 Expanding the Wireless Frontier: Shaping New Jerseys 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 the most-complained about business. In 2003, it dropped only slightly to number two and in 2004 and 2005 regained the number one position. In 2004 the CBBB analyzed complaints and determined that they fell into three categories: (1) complaints about billing; (2) complaints about the quality of customer service; and (3) complaints about misrepresentation or miscommunication by sales or customer service personnel. While the increase was acknowledged to be, in part, attributable to the growth in popularity, the CBBB thought the pattern was unusual, even for a new industry, and warranted a more in-depth analysis.282 It should be noted, however, that these figures might be misleading if they are not put into context. The CBBB divides most industries (other than wireless) into multiple categories. For example, if the four separate categories used for the car dealer 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 complaints would be lower than the wireless industrys 89% settlement rate. If the credit and finance categories were summed, their complaints would be 68% more than those related to the wireless industry. Likewise, home improvement and housing-related complaints would be practically double those related to wireless. Complaints at the FCC grew to 25,852 in 2005, but seemed to be dropping, as only 8,666 complaints were received by the FCC in the first half of 2006283 which represented a decrease of 39% from the first half of 2005. More than half were billing and rate-related.284 Some analysts have posited that the large number of cell phone billing complaints may be partially attributable to 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 include early cancellation penalties ranging up to $200 or more, consumers find it difficult and costly to switch service.285 In recent years, in response to the significant increase in consumer complaints about service 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 and commitment to the issue. Some examples are listed below: 1. Voluntary Consumer Code

Following a NARUC resolution adopting wireless best practices in July 2003, CTIAs Voluntary Consumer Code was adopted that September. The resolution was developed by
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 and Complaints Reports 284 Id. 285 Cell Phone Service Bills, Long-Term Contracts, and Complaints, Christopher A. Baker, AARP Policy Institute, June 2006.
282

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NARUC in cooperation with the FCC and the industry and adopted in lieu of a resolution supporting regulation of wireless service quality. The three-year old Code is designed to encourage 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, have adopted the Code and, in order to use CTIAs Seal of Wireless Quality/Consumer Information in their marketing materials, carriers compliance with the code must be demonstrated and recertified annually.286 These carriers cover 93% of all wireless subscribers. Among other requirements, the Code requires carriers to Disclose Rates and Terms of Service to Consumer and to include disclosure of the amount or range of any . . . fees or surcharges that are collected and retained by the carrier. Commitment Six requires adopting carriers to Separately Identify Carrier Charges From Taxes On Billing Statements.287 The Code has been a positive step in customer service and demonstrates the states willingness to work with the industry and apply a light regulatory touch. Cell phone carriers do not 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 noncompliance 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, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Virginia, Wisconsin, and Wyoming entered into an Assurance of Voluntary Compliance with Cingular Wireless LLC, Sprint Spectrum L.P. and Verizon Wireless, and to settle inquiries involving allegations 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 disclosure of material rates and terms during a sales transaction, coverage, cancellation periods for wireless service, advertising, disclosures of taxes and surcharges on consumer bills, consumer inquiries and complaints, and compliance procedures. 3. Cooperative Agreements

Several States have established cooperative agreements with wireless companies to address consumer issues and complaints. Such arrangements typically provide a channel of communication for states to work with wireless providers to handle specific constituent complaint matters.

Truth-in-Billing Format, First Report and Order and Further Notice of Proposed Rulemaking, CC Docket No. 98170, 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

286

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4.

State Actions

States have attempted a variety of approaches to address perceived concerns with regard to the wireless industry. Often times the actions have been instigated through the State legislative 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 that wireless customers were given notice of and the opportunity to consent to substantives changes in their wireless contracts. Shortly after enactment the wireless industry successfully filed a lawsuit seeking to invalidate it.290 Sometimes, the action has taken place at the regulatory or administrative level. For example, the California PUC (CPUC) adopted a new Consumer Protection Initiative decision in March 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 consumer education program (see www.calphoneinfo.com) that will provide information in 12 languages to reach out to California consumers. The CPUC's education content includes discussion of consumers 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 informs consumers where to report complaints and fraud clearly. The consumer education initiative launched in late June 2006, and over 8,300 hits to the CalPhoneInfo.com website were recorded on 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 the content of the educational materials collaboratively. In addition to the website, this group is voluntarily distributing the consumer educational information through brochures, posters, public service announcements, bill inserts, free text messages, and other media outreach efforts. The March 2006 decision also enhanced the CPUCs ability to enforce laws and rules in a timely and effective manner by creating a special Telecommunications Consumer Fraud Unit; expanding its toll-free hotline to cover allegations of fraud; and increasing cooperation with other law enforcement agencies such as the Attorney General and District Attorneys. In order to ensure that the needs of non-English speaking populations in particular are protected, the decision 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 involving telecommunications (both wireline and wireless telecommunications services) was issued on January 14, 2007. The CPUC decision also adopted strengthened cramming rules, which apply to all charges (whether communications or non-communications charges) placed on a consumers
288 289

2004 MINN. LAWS 261, ART. 5. 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 a customer for any unauthorized charge, even if the phone company did not originate the disputed charge. These rules further state that a customer cannot be required to pay a disputed charge or associated late charge while the phone company is investigating a complaint. According to the rules, 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 CPUC staff, worker identification, and Emergency 911 access were broadened in order to extend to wireless carriers.291 5. Court Decisions

Thousands of wireless customers in 2000-2002 were knowingly sold wireless phones in areas where there was no service coverage and then were told contracts could not be cancelled without paying between $150 and $400 in early termination fees. A California court upheld the States 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 the J.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 The FCC has also noted a decline in wireless complaints. The FCCs Truth In Billing Orders have touched upon the issue of States jurisdiction over wireless consumer issues while dealing with the broader issues regarding billing formatting and surcharges applied by all carriers. The FCCs Truth In Billing Order (CC Docket No. 98170/CG Docket No. 04-208, Released March 18, 2005) removed the exemption for CMRS carriers requiring that billing descriptions are brief, clear, non-misleading and in plain language, but declined to prohibit non-government authorized surcharges, also known as discretionary surcharges. In the case of wireless carriers, the FCC specifically prohibited States from regulating 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 11th Circuit (Atlanta) ruled that the FCC exceeded its statutory authority when it preempted states from requiring or prohibiting the use of line items on wireless bills. The unanimous ruling by a three-judge panel means that the Georgia Public Service Commission and similar commissions around the country can enforce laws limiting what wireless providers can put on their bills.294

Questions on this initiative may be directed to President Michael Peevey, Commissioner Rachelle Chong or Commissioner 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 as Customers Report Higher Ratings in Call Quality and Cost-Related Attributes, Press Release, J.D. Power and Associates, Sept. 9, 2004 (J.D. Power and Associates Wireless Customer Satisfaction Study). 294 11th Circuit Decides FCC Was Wrong About Cell Phone Bills, Alyson M. Pulmer, Fulton County Daily Reporter, August 15, 2006.

291

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6.

Conclusion

Mobile communications devices are clearly a product that consumers desire. The industrys phenomenal growth is a testament to this, as is its high degree of competition in many markets. 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 wireless communications has created growing pains. There are legitimate and real consumer complaints regarding certain consumer marketing, billing and other industry practices. States have addressed these concerns in a number of ways. The next section will discuss possible models for future State actions as well as a proposed framework for an ongoing dialogue with the wireless industry 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 and market entry of wireless carriers (Section 332(c)(3), an amendment approved in 1993 as part of the Omnibus Budget Reconciliation). This amendment clarified in federal law that States have no authority over the regulation of entry and rates, but would preserve authority over so-called terms and conditions, which is a dual-jurisdictional approach. As previously noted, States took a decidedly 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 through attorneys generals offices, State public utilities commissions, legislatures and courts. Throughout the last year of the 109th Congress, significant discussion was generated around proposed legislation (H.R. 5252, amended in the Senate) that would have preempted States permanently in federal statute from enforcing provisions that affect the terms and conditions of wireless service. NARUC opposed these efforts and the legislation ultimately failed to move. While NARUC continues to believe that broadly preemptory language is not in the best interests of consumers, it also understands the need for ongoing dialogue with industry as the wireless market continues to evolve in an effort to foster a cooperative federal-State approach on issues such as technological innovation, network build-out, greater competition, and educating and protecting wireless consumers. NARUC has recently passed two resolutions that are directly relevant to this subject. The first concerns the overarching principles in an approach of functional federalism, in which States emphasize their core competencies in areas such as consumer protection, highlighted in its Federalism and Telecom White Paper approved at the 2005 Summer Meeting (Resolution on NARUC Telecommunications Legislative Reform). The second is a resolution (Resolution on State Jurisdiction over Wireless Industry), adopted at the 2006 Summer Meeting, that expresses its strong opposition to attempts to preempt its recognized authorities under terms and conditions 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 by the principles and statements included in these resolutions. NARUC believes that federal standards or guidelines for consumer protection in wireless services may be an appropriate way to help streamline rules that apply to wireless carriers, and address the primary concern expressed 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 of those standards. Experience has shown that State commissions and attorneys general are better equipped to handle the myriad individual complaints in a case-specific, timely way as compared to an overburdened Federal Communications Commission operating at a distance. Within this framework of national rules, State enforcement, there is a good deal of debate 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 go above, 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 that allows a full vetting of these policy options and ideas in order to explore possible options to achieve as much consensus as may be possible. B. Wireless ETC Issues 1. ETC Background

ETC is an acronym for eligible telecommunications carrier. An eligible telecommunications carrier is a common carrier that has been designated to receive universal service 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 States jurisdiction, either the State commission or the FCC is responsible for reviewing applications for ETC 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 grown tremendously since 1999, and recently is a major cause in the growth in disbursements from the High-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 the 4th Quarter of 2006 (based on annualizing the 4th Quarter actual disbursements from USAC of $286 million to the CETCs). For the 2007 year, it is expected that wireless CETCs will continue to receive an amount in the range of $1.1 billion, based on currently eligible carriers, and may receive additional funds depending on the resolution of applications for ETC status before various State commissions. On the other hand, its important to note the amount of contributions to the USF that wireless carriers have made. Such contributions amounted to approximately $2.5 billion for 2006, based on 230 million subscribers and a safe harbor contribution rate of 28.5 percent (not based on actual USAC data). This amounts to slightly over $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 reasonable to 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 resale of another carriers services.297 If the company plans to offer the services solely through resale, it shall not be designated an ETC.298 The supported services and the associated charges must be advertised by the ETC throughout the service area for which designation is received, using media of general distribution.299 The ETC must also advertise the availability of Lifeline and Link Up services in a manner 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 FCC adopted additional requirements that all ETC applications must meet to be designated an ETC by the FCC.301 An ETC applicant must demonstrate: (1) a commitment and ability to provide services, including providing service to all customers within its proposed service area; (2) how it will remain functional in emergency situations; (3) that it will satisfy consumer protection and service quality standards; (4) that it offers local usage comparable to that offered by the incumbent LEC; and (5) an understanding that it may be required to provide equal access if all other ETCs in the designated service area relinquish their designations pursuant to section 214(e)(4) of the Act.302 These requirements are mandatory for all ETCs designated by the Commission, including those using wireless technologies.303 ETCs designated by the FCC prior to the Report and Order were required to make such showings when they submit their annual certification filing on October 1, 2006.304 The FCC also encouraged State commissions that have chosen to designate ETCs under delegated power from the FCC to apply these requirements to all ETC applicants over which they exercise jurisdiction.305 A number of State commissions have adopted the FCCs ETC designation criteria, and some have chosen to expand upon the requirements by requiring additional criteria for ETC applicants in the areas of service quality and reliability and consumer protection.
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 its functional 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 to directory 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, FCC 05-46, Adopted February 25, 2005, Released March 17, 2005. 302 Id. at 20. 303 Id. 304 Id. 305 Id.
296

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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 to undertake a survey. The first ETC Task Force Report was published at the Summer Meeting in 2005, 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 commissions have adopted the FCCs 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 additional criteria 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, this report will not re-examine these issues again in great detail. In brief, the FCC Order requires that the 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 designation service who request it, and by submitting a formal network improvement plan that describes how universal service funds will be used to improve service and coverage. For the former, it suggested several specific technologies and ways in which the ETC applicant should provide service to such a requesting customer. For the latter, the FCC suggested that the ETC applicant submit a five-year plan describing with specificity its proposed improvements or upgrades to the applicants 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 to follow when requesting initial ETC designation or re-certification on an annual basis: a) ability to remain functional in emergency situations; b) consumer protection; c) local usage; d) equal access; and e) adequate financial resources. It also encourages the State commission to carry out an analysis of whether or not the ETC designation will service the public interest, by examining such factors as a cost-benefit study, potential for cream-skimming effects, and the financial impact 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 1st annually, which are called certification and reporting requirements. 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 service outages, lasting at least 30 minutes that potentially affect at least ten percent of users or an E911 facility; (3) the number of unfulfilled service requests; (4) the number of complaints per 1,000 handsets or lines; (5) certification that the ETC is complying with applicable service quality standards and consumer protection rules (such as the CTIAs Voluntary Consumer Code, or a State-level standards); (6) ability to function in emergency situations; (7) provision of a local usage plan comparable to that offered by incumbent LEC; (8) provision of equal access to long distance 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 remove statutory, regulatory, economic, and operational barriers to local telephone services competition. In 1998, 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 communications services. One of the objectives of the FCC has been to facilitate a more effective wholesale market through interconnection policy and other competition-related rules. For a wireless telecommunications company, interconnection means the linking of its wireless network to the network of a local exchange company, either directly or indirectly, for the exchange of traffic. Compensation among companies is for transport and termination on one carriers network of traffic that originates on the network facilities of the other carrier. Each telecommunications carrier must interconnect directly or indirectly with the facilities and equipment of other telecommunications carriers in conformity with the terms of Section 251(a) of the Act. Incumbent local exchange companies (ILECs) may request interconnection 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 receiving such 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 can ask a State commission to mediate or arbitrate differences or open issues. Today, arrangements for direct or indirect interconnection of wireless facilities and for the transfer of telecommunications between CMRS providers and local exchange companies (LECs) are considered routine. However, CMRS/LEC intercarrier compensation issues for transport and termination of traffic might resurface in the FCCs intercarrier compensation docket. D. Public Safety and E-911

911 is the official national emergency number in the U.S. and Canada. Dialing 911 connects you to a Public Safety Answering Point (PSAP) dispatcher trained to route calls to local emergency 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 and

location of the 911 caller, a capability called Enhanced 911 or E-911. Wireless carriers can deploy technology to provide the latitude and longitude of the 911 caller within specific accuracy requirements.

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1.

FCC Wireless 911 Initiatives

The Wireless Communications and Safety Act of 1999 (911 Act) charges the FCC with facilitating the implementation of end-to-end emergency response at the State and local level. The FCCs 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 911 services and identifying the location of wireless 911 callers to enable emergency response personnel to provide assistance more quickly. The FCCs wireless 911 rules apply to all cellular licensees, broadband Personal Communications Service licensees, and certain Specialized Mobile Radio licensees. The FCCs June 12, 1996 order in Docket No. CC Docket No. 94-102 required that wireless carriers transmit all 911 calls to a PSAP, regardless of whether the caller subscribes to the carriers 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 the handset 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 April 1, 1998, whichever was later. Under Phase II, wireless carriers are required to begin providing the latitude and longitude of the caller with specific accuracy requirements. Carriers have the option to provide this ALI information by deploying location information technology in their networks (a networkbased solution), Global Positioning System (GPS) technology in the subscribers handsets (a handset-based solution), or a combination of location technology in both the network and handsets (a hybrid solution). The 1996 order required compliance with Phase II rules within six months of a valid request by a PSAP, or September 1, 2003, whichever is later. Also, wireless carriers subject to the 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 I carriers) that collectively serve over 78 percent of the nations mobile telephone subscribers -included specific Phase II compliance plans requiring certain relief from specific provisions of the Phase II rules. The FCC responded by allowing Tier I carriers AT&T Wireless, Cingular Wireless, Nextel Communications, Sprint PCS, Verizon Wireless, and T-Mobile f/k/a VoiceStream Communications to commit to individual compliance plans, but all of these carriers have committed that their plans for handset-based solutions will be fully implemented no later than the end of the year 2005. Tier I carriers choosing handset-based location solutions must provide the location of wireless 911 calls with an accuracy of 50 meters for 67 percent of calls and 150 meters for 95 percent of calls. Carriers using a handset-based solution also must ensure that 95 percent of their customers have location-capable handsets no later than December 31, 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 of vendors focus on filling orders from nationwide carriers. For non-nationwide Tier II (more than 500,000 subscribers) and Tier III (no more than 500,000 subscribers) CMRS providers, the FCC adopted 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 Cellular Corporation, and Price Wireless are required to report quarterly on their E-911 Phase I and Phase 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 carriers who employ a network-based location technology are required to ensure that penetration of location-capable digital handsets among its subscribers reaches 95 percent no later than December 31, 2005. Once a PSAP request is received, Tier II and Tier III carriers must, within six months, install hardware as needed and begin delivering Phase II enhanced 911 service to the PSAP. More recently, on March 22, 2005, the FCC order in Docket No. FCC 05-79 addressed 40 requests for relief from the Commissions wireless E911 Phase II requirements filed by or on behalf of small wireless carriers. The petitions fell into six categories: (1) carriers deploying a handset-based solution in conjunction with a CDMA upgrade; (2) carriers electing a networkbased solution; (3) carriers operating roaming-only networks (carriers carriers); (4) carriers electing a handset-based solution in conjunction with a GSM upgrade; (5) AMPS/TDMA carriers electing a handset-based solution; and (6) other requests. In individual cases, the FCC extended the December 31, 2005 deadline to ensure ninety-five percent penetration among their subscribers of location-capable handsets. The FCC denied a request for long-term relief from the Phase II rules for carriers operating roaming-only networks and serving as a carriers carrier. The FCC denied a request for general relaxation of the Phase II requirements for smaller wireless carriers filed by the Rural Telecommunications Group. The FCC required each Tier III carrier that 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 carriers choosing a handset-based Phase II solution to ensure that at least 95% of their subscribers have location-capable handsets. The FCC has no jurisdiction over PSAPs, and there is no corresponding 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 as it 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 topics which are very much at the front of the minds of federal and State policy makers. NARUC, led by the Telecommunications Committees Intercarrier Compensation Task Force, has been intimately involved 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 State regulators 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 as quickly as possible and (ii) effectively resolving consumer issues. The remainder of the paper addresses the different ways states have approached these goals. Section B below enumerates a number of best practices aimed at facilitating consumer issues. 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 the wireless industry; commissions can also provide the public and industry with valuable information. Good policy starts with a strong working knowledge of what consumers want, need and expect from the wireless industry. Determining what consumers deem important and valuable will 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 more interested in the latest applications. Consumers oftentimes see commissions as experts on telecommunications issues and an important resource. Commissions can provide the public with information on topics like those outlined in Subsection 3 below and other basic information like industry statistics, comparisons of 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 that they do with other telecommunications providers. Improved communications can yield numerous benefits. While many of these are self-evident, the providers can supply important information to commissions that may help to resolve consumer complaints, to analyze State and federal policy proposals, to promote efficient and effective use of financial resources and to disseminate 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 especially when 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 the commissions expertise on a wide range of issues. Commissioners, analysts, attorneys and consumer 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, equipment manufacturers, 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 of consumer protection functions; (2) ETC-based; states can use ETC designation and USF certification as a way to, at a minimum, evaluate how well providers are complying with reasonable requests for service, or as a way to possibly gain greater involvement in resolving individual complaints; and (3) voluntary agreements with wireless providers for some State role in addressing consumer complaints. As with other consumer issues, commissions will want to coordinate efforts with the States Office of Attorney General, consumer counsels and the like, or with industry organizations like CTIA The Wireless Association. 5. Fostering Cooperation Among Interested Parties

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

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On the local level, these may include elected officials, businesspeople and economic development experts, education professionals, public safety officials and members of the medical community. If communities lack subject matter expertise, commission staff can help them analyze wireless issues. Good examples might be why a provider needs a tower in certain location or what the options for tower designs are. Commissions can provide local decisionmakers with contacts at the wireless providers as well. Obviously, commissions should be sensitive that local governments, tribes and other entities may have primary responsibility for zoning and other issues and may not wish commission involvement. In addition, as wireless carriers compete for limited capital funding to finance network deployment, commissions should carefully consider the effects that their decisions and policies might have upon investment in their states. In this regard, State commissions might also consider consulting representatives of the financial markets and economists for advice on how certain 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 Governors office, Office of Attorney General, State legislature, State agencies, State/local entities that use other telecommunications networks, Native American tribes, congressional delegations, and federal agencies on a myriad of wireless topics. C. State Case Studies

This section examines several States policies and programs to encourage development of the 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 Arizona Corporation Commissions (ACC) jurisdiction with respect to wireless carriers. SB1486 states specifically: "...The commission may adopt or administer arbitration procedures to resolve complaints or disputes brought by a party against a telecommunications company, except that the Commission shall not subject a wireless provider to arbitration unless the wireless provider and customer consent in writing. This section does not prohibit the Commission from arbitrating disputes or complaints against a wireline 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 from a consumer, it is referred to the contact provided by the wireless company addressed in the complaint (to the extent company contact information has been provided to the ACC). An

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attempt is then made to resolve the complaint on an informal level. The customer is also informed they may also contact the FCC and is provided the FCCs contact information. 2. California

As discussed in a previous section, the California Public Utilities Commission (CPUC) adopted a Consumer Protection Initiative in March 2006. A few of the CPUCs more recent actions that recognize the impact of, and/or promote, wireless technologies are highlighted below. Broadband over Power Lines In April 2006, the CPUC adopted a decision establishing a regulatory framework to foster deployment of broadband over power line (BPL) services. The decision removes regulatory obstacles to broadband infrastructure deployment and thereby promotes broadband competition. Since BPL uses existing utility infrastructure, the decision adopts a streamlined environmental review process to speed deployment. The decision covers all types of BPL technologies, including those that utilize wireless links for portions of the network. Universal Service In mid-2006, the CPUC opened two rulemaking proceedings to comprehensively review its universal service policies. At a spring 2006 workshop, program stakeholders particularly those in the deaf and disabled communities specifically requested access to wireless and broadband devices to better meet their needs. However, many of the current programs are restricted to landline phone services or equipment due to the date of the program inception when other technologies were not available on a widespread basis. The first universal service rulemaking proceeding, launched May 2006, is focusing on public policy programs (Lifeline, Teleconnect, Deaf and Disabled, Public Payphone Program) and funding mechanisms. The second universal service proceeding, initiated in June 2006, will focus on the California high cost fund that provides support to the four largest landline phone companies in California. In 2007, it is expected that a third and final universal service proceeding will be launched on the California High Cost Fund that provides support to small rural ILECs. In both proceedings, the CPUC is exploring how to continue ensuring affordable and widespread availability of high-quality telecommunications services in light of technological innovations and increasingly competitive markets. In California today, there are more wireless phones than there are wireline phones; with some consumers are cutting the (landline) cord in favor of other technologies. This development of wireless and other new technologies such as Voice over Internet Protocol (VoIP) and Wi-Fi/WiMAX raises questions for how the CPUC will continue to meet the requirements put forth by the California Legislature, which called for the CPUC to ensure the continued affordability and widespread availability of high-quality telecommunications services to all Californians.

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3.

Florida

The Florida Public Service Commission (FPSC) does not have jurisdiction over wireless carriers. 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 Commissions hands-off approach to wireless services has allowed consumers to benefit from competition and has allowed the wireless industry to innovate to meet customers multi-faceted needs.307 Wireless subscribers in Florida continue to increase yearly as consumers enjoy the benefits of a competitive market for wireless service. Florida wireless subscribership was 12.5 million at year-end 2005.308 With an express statutory exemption from PSC jurisdiction, regulatory risk has been minimized, and carriers have shown an increased willingness 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 not have jurisdiction, Florida has an established, effective process for addressing customer complaint issues 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 Florida Department of Agriculture and Consumer Services (the Department). The Department functions as the States clearinghouse for consumer complaints. The Department assists consumers with information, protection, and complaints, regardless of whether it regulates that particular industry.309 While the Department has no jurisdiction over wireless carriers, they act as mediator to get disputes between carriers and consumers resolved. Because the FPSC lacks jurisdiction over wireless providers, it does not initiate a complaint process of its own and generally refers wireless consumer complaints directly to the Department; however, the FPSC has one other noteworthy procedure to assist certain wireless consumers. Many larger wireless carriers provide the FPSCs Bureau of Complaint Resolution with phone numbers of company employees who are designated to assist consumers who contacted the FPSC with a wireless-related problem. These contact numbers are often referred to as escalation numbers. If (i) the wireless consumers complaint involves a company that has provided the FPSC with such an escalation number and (ii) the wireless consumer is willing to work with the company, then the FPSC complaint analyst will offer the phone number to the consumer. Otherwise, the FPSC refers wireless-related complaints to the Department, which addresses the complaints as follows:

306 307

Fla. Stat. Ann. Sections 364.02 (2), (13)(c), 366.02(1). 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 complaint to the FCC. The FCC does not regulate contractual arrangements with cellular providers, but does handle complaints about wireless service. The Department then attempts informal mediation to resolve the consumers dispute by providing the wireless carrier with a copy of the consumer complaint against them and asking them to provide input and comment regarding the complaint. 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 complainant to satisfactory conclusion. If a solution cannot be found, the Department will document the complaint in its database and close the file. If fraud or misrepresentation is found to be involved, then the Department may investigate further and turn over their findings to the Attorney Generals office.310

2.

3.

4.

5.

In short, Florida is addressing wireless consumer issues through a mix of generally applicable consumer protection law and interagency cooperation via the Florida PSC and the Florida Department of Agriculture and Consumer Services. 4. Iowa

In October of 2006, Iowa adopted new eligibility criteria and annual reporting requirements for ETCs. As a result, some wireless carriers that are CETCs will be required to submit 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 certain service quality performance indicators. Only wireless carriers with ETC designation are subject to these new rules. These new rules also require wireless CETCs to commit to complying with certain minimum consumer protection standards based on the 2006 Cellular Telecommunications and Internet Associations (CTIA) Consumer Code for Wireless Service. These new rules extend the Iowa Utilities Boards complaint jurisdiction over wireless CETCs in order to protect consumers 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 the enactment of LB 835 in 1987 prior to the widespread deployment of, and dramatic growth in consumer 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 billing category includes early termination fees assessed by the carriers. As a general rule, the wireless carriers have been working together with the NPSC to resolve 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 to our 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 for investigation and resolution. 4. Carrier has 5 working days to respond to the NPSC. Legislation was introduced in the Nebraska Legislature this January (LB 330) which would delegate to the Nebraska Public Service Commission limited authority to resolve disputes between wireless telephone companies and consumers regarding billing and service agreements. The Nebraska Public Service Commission (NPSC) does not have statutory jurisdiction over wireless carriers. 6. New York

Cellular Mobile Radiotelephone Service, now known as Commercial Mobile Radio Service, or CMRS, was first offered in 1981. Like its predecessor mobile services, it was treated as a regulated telephone service. In 1993, the federal government preempted State and local governments from regulating the entry of or the rates charged by any commercial mobile service or any private mobile service.311 States retained an ability to regulate the other terms and conditions of CMRS and to establish requirements for ensuring the universal availability of telecommunications services. Under the Telecommunications Act of 1996 the States did gain responsibility for certain aspects of wireless services.312 These responsibilities include the review and approval of interconnection between wireless service providers and other telecommunications providers, mediation and arbitration of interconnection disputes,313 access to telephone numbers,314 and certification of Eligible Telecommunications Carriers (ETC)315 to receive Universal Service Fund High-Cost Support.316

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 a waiver 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 cellular telephone services. 312 "Wireless" includes CMRS, Private Radio Service, Personal Communications Services, Broadband Personal Communications 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 to contribute to the State Targeted Accessibility Fund. (See Cases 94-C-0095 and 28425, Opinion No. 98-10, issued June 2, 1998).

311

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In 2005, the New York Public Service Commission (NY PSC), recognizing the competitive state of the wireless market, approved the merger of Sprint and Nextel.317 Both holding companies had subsidiaries that provided telecommunications services other than CMRS or Private Communications Services. Since the 1997 suspension of Public Service Law, other government agencies have taken various roles over wireless services. The State Attorney General and the Consumer Protection Board take complaints concerning wireless services. The Consumer Protection Board maintains a Do-Not-Call list for wireless service customers. Finally, the New York City Department of Information 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 of telecommunications networks, plants, and users. An event on one platform often influences other 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 also requested the filing of annual reports on network reliability by all telecommunications carriers, including wireless service providers. A proceeding to consider changes to its service quality regulations has been initiated.319 Finally, in response to the competitive and partially unregulated nature of the intermodal telecommunications 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 a telecommunications company services, including wireless services. This information would be provided on a voluntary basis by participating telecommunications companies. The report will likely include descriptions of essential public safety and health protections (911 and E-911 availability, CALEA compliance, per call and all call blocking of caller ID information), consumer protections (slamming and cramming protections, privacy policies, access to Relay Services), consumer features (website access, directory listings, number portability) and how to file 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 North Carolina. For the first time in history, North Carolinians have more wireless phones than wire
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 Surviving Corporation, issued and effective April 20, 2005. 318 Case 05-C-0616 Proceeding on Motion of the Commission to Examine Issues Related to the Transition to Intermodal Competition in the Provision of Telecommunications Services. Statement of Policy on Further Steps Toward Competition in the Intermodal Telecommunications Market and Order Allowing Rate Filings, issued April 11, 2006. 319 Case 06-C-0481 - Proceeding on Motion of the Commission Providing for the Examination of Service Quality and Consumer Protection Regulations, Including Parts 602, 603 and 609 - Notice Concerning Service Quality and Consumer Protection Regulations, issued April 21, 2006. 320 Case 05-C-0616, Order, issued April 11, 2006.
317

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line connections. According to the FCCs Local Telephone Competition report, the number of wireless subscribers in the State rose to 5.36 million, while wireline connections declined to 4.99 million 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 or transmitting messages or communications by mobile radio communications service. Mobile radio communications service includes one-way or two-way radio service provided to mobile or fixed stations or receivers using mobile radio service frequencies. Thus, the NCUC jurisdiction does not include CMRS providers. Despite not regulating the wireless industry, North Carolina has in place a process to resolve 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 Generals (AG) Office. The NCUC does not attempt to mediate wireless complaints and does not directly deal with the wireless carriers regarding complaints against them. Rather, such complaints are handled by the State agency with the jurisdiction over all consumer complaints. The AGs office handles consumer complaints and provides consumer tips on its websites to help assist consumers when dealing with businesses. If customers feel that a wireless company has misrepresented its rates or other terms and conditions of its service, they can file a complaint with the AGs Consumer Protection Division, and the Division will work to resolve the situation. In cases where there is a pattern of illegal business practices, the AGs Consumer Protection Division may also take legal action to enforce the law on behalf of the public. The office cannot, however, represent individuals in their private legal disputes. The AGs Consumer Protection Division also works to educate consumers so that they can avoid problems from the start. They publish on their website consumer tips on a wide range of 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 started a wireless outreach initiative designed to assist wireless phone customers in the State. Through it, the PSC is pursuing a voluntary initiative designed to serve the States wireless consumers. The Commissions initiative consists of two programs: Zap the Gap and Connecting Consumers. The Zap the Gap effort is designed to encourage wireless investment in the State, especially underserved areas. The ND PSC collects information from consumers to determine areas where there is demand but low wireless coverage. The information is forwarded to wireless providers to help bring attention to areas needing service. ND PSC staff has created a clearinghouse of planning information for wireless companies. The information includes approximations 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 help wireless providers in their network planning. The ND PSC facilitates discussions between communities that want wireless service and providers operating in the State. Zap the Gap also identifies strategies to advocate for North Dakotas interests in wireless matters with other government agencies. Many of the decisions that affect wireless investment in North Dakota are made at the federal level. This component of the initiative targets federal rulemakings and opportunities with the FCC, Rural Utilities Service and other State commissions. One such recent example was the successful effort to lobby for the resolution of cell tower permitting delays at the FCC. The Connecting Consumers effort is designed to help consumers with wireless questions and concerns that they may have with their current services. The PSC established an information center on its webpage for consumers wanting to learn more about wireless issues. The Commission has also commissioned an e-mail address wireless@nd.gov for consumers wishing to contact the ND PSC with questions and concerns over wireless phone issues. Such efforts complement general consumer protection authority provided by the States Attorney General. 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 to Bismarck and helped focus attention on the challenges and potential of wireless technologies in rural America. 9. South Dakota

Former South Dakota Public Utilities Commission Chairman (SD PUC) Bob Sahr started with a simple concept in 2002: Ask the States consumers for their thoughts on wireless services. The overwhelming response was to improve cell phone coverage in rural areas. The public knew wireless 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 approach to facilitate the States wireless build-out: Open a proactive dialogue with the providers, build staff expertise on wireless technology and work with local communities to help them bring wireless services to town. Letters, e-mails and petitions flowed in from towns interested in improved wireless service. Communities offered city water towers, grain elevators, county courthouses and rural water towers as possible cell sites. Grass-roots meetings were held in dozens of towns. The SD PUC hosted the South Dakota Wireless Conference, with a keynote by fellow South Dakotan and current FCC Commissioner Jonathan Adelstein, focusing on how to bring wireless technology to the States consumers faster. The wireless providers responded. In 2004, Cellular One constructed 25 new towers in South 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 the wireless providers work together to resolve consumer complaints on issues like false roaming charges, dropped calls, analog versus digital questions, lack of system capacity and billing disputes. 10. Tennessee The Tennessee Regulatory Authority (TRA) does not have statutory jurisdiction over wireless carriers. Tennessee Code Annotated, Chapter 65-4-101(a)(6)(F), with a limited exception, exempts from regulation as a public utility any entity offering domestic public cellular radio telephone service authorized by the Federal Communications Commission. The major wireless providers all serve customers in Tennessee. Over the years, wireless carriers have invested billions of dollars to improve wireless services in Tennessee, and continue to invest several hundred million dollars every year. Wireless is also a major source of jobs for Tennessee, directly employing about 8,000 people and indirectly employing many more. The wireless industry has been deregulated in Tennessee since the mid-1980s, when the second wireless carrier began offering service in the State. Tennessee has since become one of the most vibrant and competitive markets in the nation. While the Tennessee Legislature does not regulate wireless pricing, it does look at certain service-related issues. For example, last year Tennessee 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 the applicable 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 to the carrier, so that the carrier can attempt to resolve the matter. Further, if the wireless complaint involves issues of fraud and false advertising, then the matter will be referred to the Tennessee Division of Consumer Affairs (TN DCA). Created in 1977, the TN DCA works to enforce the State Consumer Protection Act and assist consumers and businesses affected by unfair business practices. The TN DCA coordinates mediation between consumers and businesses, and publishes a 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 must complete 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 will have 15 days to respond.

321

www.state.tn.us/consumer

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4. TN DCA will work with both the business and the consumer to resolve the complaint. If necessary, TN DCA will forward complaints to other agencies, including the Office of the Attorney General of the State of Tennessee. In Tennessee, consumer complaints for wireless service continue to be low. Since last year, Tennessee has had only 237 wireless complaints - ranging from not getting service to merger service problems. In addition, wireless carriers appear to have successfully responded to consumer complaints. To improve service, wireless carriers have hired more people, enhanced coverage by adding new towers, and provided much more information to educate consumers. Competition may also serve as motivation for wireless providers to continue to provide enhanced customer service. In Tennessee, 93% of consumers can choose from among 5 or more wireless carriers. Thus, competition provides an additional incentive for wireless carriers to continue to improve its services to meet customers demands. 11. Texas

The Public Utility Commission of Texas does not have jurisdiction over wireless carriers. Texas law expressly states that providers of commercial mobile services are not subject to regulation by the Texas Commission. The one exception to this general rule is in the area of the Texas Universal Service Fund (TUSF). Under State law and the Commissions rules, wireless carriers are subject to assessments to support the TUSF. Currently, that assessment is five percent of total taxable intrastate telecommunications receipts. Wireless carriers also are eligible to apply for designation as an Eligible Telecommunications Provider (ETP) and to receive reimbursement from the TUSF for providing service in high-cost areas. Currently, two wireless carriers have been granted this status in Texas. The Commission has also been delegated authority by the FCC to designate Eligible Telecommunications Carriers for purposes of the Federal Universal Service Fund. The Customer Protection Division of the Public Utility Commission of Texas does not have jurisdiction over wireless customer complaints. Several of the wireless carriers in Texas work with the division to provide better service to their customers. The Call Center staff gives the customer the option of filing their complaint with the FCC or calling an executive number with the participating wireless company that will allow the company one last opportunity to resolve the customers issues before a complaint is filed with the FCC. In certain cases the staff will contact the regulatory staff of the wireless carrier to alert them of a customer issue and recommend that they contact the customer immediately. 12. Virginia

In the 2006 session of the Virginia General Assembly, legislation was introduced which would have given the Virginia State Corporation Commission jurisdiction over wireless companies. The exceptions to this renewal of State authority would have been those issues for which States were already pre-empted (i.e., rate setting, entry requirements, and tower siting).

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The legislation did not pass, but that did not end the legislative interest in the Virginia Commissions role in wireless complaint resolution. At the request of the patron of the legislation, we contacted wireless companies and obtained their voluntary agreement for the Virginia Commission staff to handle complaints from wireless customers. The program was coordinated with Virginia's Department Agriculture and Consumer Services, which is the clearing house for other than utility complaints in Virginia and formerly 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 programs 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 to consumers in the form of bill credits. This was accomplished without any advertising other than some 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 without excessive regulation that would impede wireless innovation and competition. An accessible avenue for complaint resolution, mediation and disposition is an important component in making competition work. States, as the laboratories of democracy, are the ideal place to experiment with different approaches to new marketplace issues. The preceding examples show how cooperation between different State agencies and the federal government and the industry can provide citizens with such an avenue for resolving both complaints and misunderstandings.

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