More choices needed for wireless consumers (Sen. John Kerry)

We’ve got a busy couple of days ahead in the Senate Commerce Committee, but they’re exactly the kind of days you’ve been fighting to see for a long time.  First, we’ll have a nomination hearing for Julius Genachowski, who is President Obama’s pick to head the FCC, the right guy to help implement the President’s technology agenda including an open Internet. As part of the Recovery Act, Congress directed the FCC to come up with a comprehensive plan for building out broadband to every household, and to do it by February of 2010.  We need to get Julius confirmed so he can get down to doing what the President and so many of us in Congress know he is capable of–delivering a national broadband plan.

So that’s today.  And tomorrow, we’re looking at the wireless marketplace from the consumer’s perspective.  There are now 270 million cell phone subscribers in America, and 18 percent of households rely solely on wireless phones to communicate.  That number’s growing, and it doesn’t take a big leap to understand that the future of telephony in this country is traveling through the airwaves, not buried in the ground.  We need to be focused on ensuring that the wireless marketplace remains competitive, and that consumers have access to innovative technologies whether they live in a densely populated city or a sparsely populated small town.

Today, we’ve got a wireless marketplace where four companies account for more than 85 percent of all subscribers.  These large carriers strike deals with the companies creating the newest and most innovative phones, leaving smaller regional wireless carriers without access to the latest technologies to attract consumers.  In fact, nine of the most popular ten phones are locked in a deal with one of these big wireless carriers, and are only available through one network.

What does that mean for consumers?  It means if you want to buy an iPhone, you’ve got to subscribe to AT&T.  If you want a Blackberry Storm, you’ve got to be a Verizon customer.  And if you live in rural America, you’re probably using whatever phones are not locked up in an exclusive contract rather than the newest technology.

Here’s the question I think we need to wrestle with: the decision for what phone you can use is being made largely by the wireless service providers.  We don’t see that happen in similar markets.  Your broadband provider doesn’t decide what kind of computer you can connect at the end of your DSL or cable wire.  And forty years ago, the FCC ruled in the historic Carterfone decision that AT&T couldn’t pick and choose which phones can and can’t connect to its network.

Is the status quo the right model for maximizing innovation, competition and consumer choice?  Or do we need a change?  On Monday, I sent a letter with three of my Commerce Committee colleagues asking Acting FCC Chairman Copps to examine this issue.  And on Wednesday afternoon, we’ll hear the arguments on both sides in our hearing. This is a big issue, affecting everyone with a cell phone and central to our telecommunications infrastructure, so I’ll be giving it close attention to see what the best policies should be.