Wireless Carterfone

WIRELESS CARTERFONE
[SOURCE: New America Foundation, AUTHOR: Rob Frieden, Penn State University]
Frieden paper explains why wireless Carterfone policy constitutes a long overdue policy response to carrier practices that often have nothing to do with protecting their networks from technical harm or other legitimate network management needs. For example, blocking the implementation of wireless Carterfone enables carriers to continue locking subscribers into two-year service contracts with substantial penalties for early termination. In exchange for the service commitment, consumers acquire a carrier-subsidized handset, but they also consent to carrier-imposed restrictions on the use of the handset they bought, including the ability to access telecommunications and content services of competitors even after the carrier has recouped its subsidy. This analysis explains how wireless carriers benefit financially by avoiding Carterfone obligations and refutes the rationales and justifications for this behavior. The paper also demonstrates that the FCC has ample statutory authority to apply wireless Carterfone policy based on the largely ignored fact that when wireless cellular telephone companies provide telecommunications service, they remain subject to most common carrier regulations regardless of the fact that they also may offer less regulated information services. Finally, this report explains that wireless carriers must comply with public interest regulatory mandates even though they might conflict with carriers’ preferred business plans. The Commission has undertaken a number of analogous initiatives to protect consumers from mandatory bundling arrangements, such as its 2005 order mandating alternatives to cable set-top box leasing, which underscore the continued importance of Carterfone principles to protecting the public interest.
http://www.newamerica.net/publications/policy/wireless_cartefone

* Full text:
http://www.newamerica.net/files/Wireless_Carterfone_Frieden.pdf