Net Neutrality Battle Spills Into Wireless World

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Where Wireless Is Headed

Some industry watchers, such as Alex Winogradoff, a wireless expert with the market research firm Gartner, see the feds' meddling bringing an end to flat-rate pricing. T-Mobile, for instance, currently charges $25 a month for unlimited wireless data with the T-Mobile MyTouch 3G. As applications become even more bandwidth hungry--and if the FCC forces carriers to offer new applications against their will--carriers will switch to tiered billing to discourage bandwidth hogging, the argument goes.

But Chris Guttman-McCabe, CTIA vice president of regulatory affairs, says that even that won't solve instances where a lot of users are sucking up bandwidth at the same time, causing congestion even though they're within their individual usage limitations. Other experts wonder whether strict bandwidth caps will repel potential customers; Pablo Perez-Fernandez, a senior wireless analyst for MKM Partners, says the reason data has become so popular on smartphones is because users don't have to meter themselves with it as they do with voice minutes.

It's more likely, analysts say, that carriers will get some leniency to throttle down bandwidth-intensive uses. What remains to be determined in the months ahead is how much control carriers will have over specific services, such as VoIP.

Signs of Hope

A few recent developments have seen wireless carriers embracing openness voluntarily. Google and Verizon announced earlier this month that they will collaborate to develop applications on the Verizon network, including Google Voice. As for AT&T, VoIP applications, including Skype and Vonage, are now allowed on the iPhone for use over 3G. "I think that's exciting for consumers," says Michael Tempora, Vonage senior vice president of product management, adding that he fully expects AT&T to become more open on its own.

These are baby steps, but they put AT&T, Verizon, and their competitors in a tough position: They'll either have to continue opening up their networks or face an FCC that isn't shy about imposing regulation. Either way, it seems to be a win for consumers.