Broadband-usage fee is the next battleground
The commercial mobile operator community finds itself in a strange position when it comes to the FCC’s proposed nationwide mobile broadband network for the public-safety community.
The industry’s lobbying and advocacy arm, the Cellular Telecommunications & Internet Association (CTIA), has been eerily silent about virtually all aspects of the FCC’s public-safety broadband plan — including the commission’s recommendation that the 10 MHz D Block spectrum in the 700 MHz band be auctioned to commercial operators, against the wishes of the public-safety community. Indeed, the two largest commercial operators, Verizon Wireless and AT&T, had recommended that the FCC reallocate the D Block to first responders. (Interestingly, neither Verizon nor AT&T has commented about the plan thus far.)
Perhaps the biggest aspect of the plan CTIA is screaming about on the inside is the FCC’s recommendation that Congress provide $16 billion to construct and operate the network for the next decade and how that money would be raised: through an ongoing fee, likely in the neighborhood of $1 per month, charged to broadband users.
CTIA has been railing against mobile taxation and is lobbying Congress to pass a five-year mobile-phone tax break. CTIA operates a separate Web site to convey this message, mywireless.org, which spells out what it calls unfair and excessive wireless taxes and fees that exceed 24% in some states and average about 15% nationwide.
“And further unchecked, taxes on wireless services continue to increase much faster than taxes on other goods and services,” the association says. “Complicated and costly regulations raise prices and add hassles for consumers, without improving the quality and coverage of their service.”
But an effort to oppose a fee to build a nationwide public-safety communications network could be perceived as being un-American. The mobile industry is facing quite the conundrum: If it rocks the boat on any aspect of this plan, it will appear that it opposes the plan altogether and is wasting precious time in getting mobile broadband into the hands of the public-safety community.
In addition, the timing for the network rollout is fragile, as the FCC’s plan is based on the notion of building out the network in conjunction with commercial LTE rollouts — which are expected to explode later this year and early next year. Missing that rollout schedule would more than likely double the cost of deploying the network, the FCC has said. The last thing CTIA wants is the fee to consumers — which it so strongly opposes — double as a result of its lobbying efforts, which would be a political and public-relations nightmare for the association.
Because of these factors, my guess is CTIA is going to let this one slide, allowing consumer advocates to do its dirty work by arguing that Congress should find another way to fund the network other than by adding a new tax.
Should Congress ultimately impose the broadband-usage fee, there will need to be some significant education among consumers as to why this charge will appear on their bill. It’s not as straight forward as an E-911 fee. Reading blogs and commentary from folks not tied to public safety, I’ve already seen a bunch of questions posed as to why first responders need a mobile broadband network in the first place. Those questions are even coming from people who work in the wireless industry. If those folks don’t fully grasp the merits of this initiative, it stands to reason that it’s going to take an enormous effort to convince consumers not only that it’s necessary, but that they need to foot the bill. The time to start the education process is now.
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