Wireless Hearing to Dig Into Kill Switches, T-Mobile Competitive Strategy, Klobuchar Says
Congress faces two different approaches to cellphone theft, as a key Senate subcommittee holds a wireless competition hearing Wednesday. Earlier this month, Sen. Amy Klobuchar, D-Minn., introduced S-2032, the Smartphone Theft Prevention Act, which would require the installation of a kill switch on mobile phones and has caused carriers to balk. Sen. Chuck Schumer, D-N.Y., has repeatedly touted his S-1070, the Mobile Device Theft Deterrence Act, which has attracted wireless industry support. It would “add criminal penalties of up to five years in jail for tampering with cell phones in order to circumvent the service ban on a stolen phone” and thus “add teeth to the cell phone registry that just got up and running late last year,” a Schumer news release promised last week (http://1.usa.gov/1hPTqYD).
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Klobuchar chairs the Senate Judiciary Antitrust Subcommittee, which Schumer also belongs to, and scheduled a hearing on wireless competition issues Wednesday at 10 a.m. in 226 Dirksen, with executives from Verizon, T-Mobile, C-Spire and Mobile Future set to testify. A subcommittee media advisory issued Tuesday said it would focus on “price and service competition, spectrum availability, and potential industry consolidation.”
Kill switches will definitely come up at the hearing, among other competition issues, Klobuchar said in an interview Tuesday. “I'll talk about that,” Klobuchar said of the kill switch. “But the other major focus of that is just competition. It’s the Antitrust Subcommittee. And actually how T-Mobile’s ads and what you're seeing, the aggressive competition right now, has actually been better for consumers. So that’s going to be my major focus in addition to asking questions about the kill switch.”
Carriers have expressed concern about the kill switch legislation and continue to. CTIA Vice President-Government Affairs Jot Carpenter issued a statement outlining preference for Schumer’s bill over Klobuchar’s after she introduced hers, which Carpenter referred to as an imposition of “technology mandates.” AT&T has also expressly trumpeted Schumer’s bill. Klobuchar has cited support from the Major Cities Chiefs Association, New York Attorney General Eric Schneiderman, San Francisco District Attorney George Gascón and Consumers Union. Klobuchar is one of the five Democrats co-sponsoring Schumer’s bill. Klobuchar has three Democratic backers supporting her bill. Sen. Barbara Mikulski, D-Md., co-sponsors both pieces of legislation.
"While open to a kill switch option, Sprint remains concerned that ‘permanent’ kill switches could lead to unintended consequences for customers, reputable recycling programs, and legitimate used or trade-in devices given that many devices reported lost or stolen are subsequently found by their owners,” a spokeswoman said. She emphasized the company’s efforts to prevent cellphone theft, such as maintaining an internal database of lost and stolen phones.
T-Mobile continues “to explore tools and technologies including a ‘kill switch’ type of solution,” a spokesman said. “We believe that any such technology must provide sufficient consumer protection, security, and control. Our goal is to empower our customers by enabling an effective and usable solution that deters theft and helps consumers to better protect their devices.”
U.S. Cellular defended its “variety of anti-theft technologies” to Klobuchar in a Jan. 9 letter, responding to her December kill switch inquiries made of several carriers. U.S. Cellular has Activation Lock in the case of Apple devices and hasn’t rejected any Samsung kill switch proposal, wrote Vice President-Legal and Regulatory Affairs John Gockley. If Samsung did offer a kill switch proposal, U.S. Cellular would give it “every consideration,” Gockley said. Other carriers declined to reveal to us their responses to the Klobuchar inquiries. Industry officials pointed to the global database to help prevent smartphone theft CTIA announced in late November, put together by a coalition of CTIA members, police chiefs and the FCC.
Stakeholders disagree on the level of competition in the wireless market, a debate also expected at the Wednesday hearing. The government needs to provide “a predictable regulatory framework,” Mobile Future Chairman Jonathan Spalter plans to testify. He will seek a pipeline of licensed spectrum ready through auctions for the coming years, repurposing of government spectrum for carriers to use it, “facilitating, not second guessing, secondary market transactions to allow providers to optimize their spectrum holdings,” and a look into spectrum sharing and efficiency opportunities. Spalter is expected to call the wireless market “highly competitive” and say it fuels consumer choice.
Sprint and T-Mobile countered. “By any rigorous analysis, the marketplace is not fully competitive today,” said a spokesman for Sprint. “The U.S. wireless industry is dominated by the two largest carriers, AT&T and Verizon, which together corner 70 percent of the industry’s revenues and control around 75 percent of the highly-advantageous low-band spectrum.” He referred to the “trend toward duopoly,” which is “causing the U.S. to fall behind in providing the fast, world-class networks needed for the future.” Proper competition policies would include ensuring “access to sufficient low band spectrum and reasonably-priced backhaul, as well as the scale to compete cost-effectively,” the Sprint spokesman said.
"Competition in the wireless market is threatened by the dominance of the two largest wireless providers, and absent an appreciation of these challenges and vigilance from Congress and regulators, the disparities in low-band spectrum, scale and financial resources will inevitably lead to higher prices, lower levels of innovation, and slower economic growth,” T-Mobile Senior Vice President-Government Relations Thomas Sugrue plans to testify. T-Mobile will stress the challenges of backhaul and interconnection and urge “reasonable” spectrum aggregation limits in the coming broadcast incentive auction.