Thursday, June 18, 2009
The news of the day is that Julius Genachowski is getter closer to becoming the new chairman of the FCC. Mobile marketers should take special note to this nomination proceeding because the beliefs and the decisions of the FCC chairman have a direct result upon this nascent industry. Why? Because mobile phones at their most basic definition are radio transmitters and receivers. As such, governmental regulations regarding mobile phones fall under the broad umbrella of the FCC. This agency was created by the Communications Act of 1934 which called for the creation of a governmental agency to regulate communications by radio and wire. Since the government considers all cellphones to be radio receivers and transmitters, their usage is controlled by the same arcane rules and regulations that apply to AM and FM radios. Therefore any ruling that the FCC makes will have an impact upon the mobile marketing industry.
To get some idea of what's in store, take a quick look at Genachowski's background. He's a former legal counsel of the FCC, having served for former chairman Reed Hundt. He also served as a high-level executive at IAC/InterActiveCorp for a number of years. IAC is the entity behind a number of well-known Internet brands including Ask.com, Match.com, Evite, Citysearch and Urbanspoon. So one would hope that during his time there, he's developed a keen understanding of how real the Internet is as a facilitator of commerce. One would equally hope that he will carry into the FCC this same understanding. Already he's given some indication that "he gets it" as he said last Tuesday that he is in favor of the Obama tech plan which calls for the U.S. to increase its development of broadband Internet and reform a $7 billion federal phone-subsidy program to help cover the costs of offering broadband in rural areas. This means that Internet TV and radio have an opportunity to develop further under the Genachowski administration.
Genachowski also supports network neutrality. This is a good thing because it promote a free market underhindered by restrictive practices of ISPs and telecom providers. In 2005, during the Bush administration, the FCC supported network neutrality and declared that consumers are entitled to access the lawful Internet content of their choice, run applications and services of their choice, and plug in and run legal devices of their choice. The FCC also said consumers have a right to competition among network providers, application and service and content providers. With another supporter of network neutrality in the FCC under the Obama administration, expect to have more rulings in favor of the consumer.
As reported in the LA Times, the FCC is expected to begin formal investigation as to whether consumers are harmed by exclusive deals between handset makers and wireless telephone companies. All you Palm Pre and Apple iPhone owners should take note of this. When asked by the Senate Commerce Committee, Genachowski said that he would "ensure that the full record on the issue is reviewed and act accordingly to promote competition and consumer choice."
What does this all mean to consumers though? For one, it does not necessarily mean that breaking AT&T's monopoly on the iPhone with its subsidy automatically leads to higher prices. The subsidy of the device can easily be spread out over more wireless carriers.
Mobile marketing needs mobile devices and it needs mobile broadband. What's happening at the FCC will play a huge role in how this industry shapes out over the long term. Keep your eyes and ears open! Stay informed!