Please click here to access the archived Webinar.

The Federal Communications Commission has launched a sweeping inquiry into the mobile industry and its practices. Industry experts explained how this investigation may affect mobile marketing during a webinar hosted by Mobile Marketer. 

For yesterday?s hour-long free Webinar, Mobile Marketer assembled a team of experts to discuss the FCC?s inquiry to ostensibly foster innovation, competition and investment in the wireless marketplace. The regulator?s findings will shape future wireless regulations (see story).

?The MMA will be responding to the FCC?s three inquiries on behalf of members representing the entire mobile marketing ecosystem,? said Kristine van Dillen, director of industry initiatives and partnerships at the Mobile Marketing Association, New York. ?Every marketer does have something to be concerned with here.

?We represent agencies and brands and technology enablers and carriers, and to some extent individuals and academics, and we will focus on industry self-regulation based on best practices and consumer respect,? she said. ?Marketers have to provide a great user experience, because the industry wouldn?t exist without consumers.

?We?re working tirelessly to make sure we continue to self-regulate our industry, and we encourage participation in this area.?

MMA best practices include clear advertising of cost of services and billing and respecting consumer privacy by obtaining opt-in for contacting consumers.

All industry stakeholders should be involved in efforts of creating and adhering to self-regulatory guidelines recommended by the MMA.

The new FCC inquiry into wireless industry practices may change the rules of the game. It is no time to play spectator here (see story).

The FCC is primarily focusing on three areas: research and development with regards to innovation, competition in the wireless industry and consumer protection with an emphasis on truth-in-billing.

?We have a series of three notices of inquiry related to the mobile marketplace representing an initial step in potential regulation from the FCC down the road,? said Andy Lustigman, principal attorney at the Lustigman Firm, New York. ?These are important issues on the table that affect marketers and almost everyone in the mobile marketplace.

?This is a significant expansion of scope from prior inquiries of the FCC related to competition in the wireless space,? he said. ?Before the FCC creates regulations that marketers would not be happy with, if you do have an opinion, this is your opportunity to educate the FCC about what?s happening in the industry.

?If you feel like something is working well and the government should not get involved, this is your chance to be heard on it.?

In addition, a coalition of 10 consumer privacy organizations called on Congress earlier this month to enact legislation to protect consumers in online and mobile channels, bringing consumer data collection under the authority of the Federal Trade Commission (see story).

?There is overlapping jurisdiction of the FCC and the FTC,? Mr. Lustigman said. ?If it relates to advertising practices, it will fall under the FTC, but it does not necessarily have exclusive jurisdiction.

?For example, deceptive SMS or telemarketer calls to cell phones would fall under jurisdiction of both,? he said. ?Generally, though, the two commissions have divided and conquered."

The FCC is interested in developing a framework for analyzing and measuring innovation in the wireless industry.

The FCC wants to know what policies have so far fostered innovation and what changes they can make to spur further innovation.

The commission will examine spectrum and network bandwidth, openness and competition, applications and services, technical standards and the creation of these in the current wireless industry.

?These inquiries are extremely broad in scope,? Ms. Van Dillen said. ?The FCC is asking, ?What kind of innovation is occurring and how do we measure it??

??Should we take action to facilitate innovation??? she said. ?They don?t quite know what to do to ensure innovation in the space.

?The key question here is how does the FCC accelerate new technologies and how would that affect marketing channels??

The FCC is seeking to determine whether consumers have sufficient access to relevant pricing information about their mobile services.

The commission is also seeking feedback on cost-effective best practices in information disclosure.

It is likely that the FCC will use this avenue to examine truth-in-advertising issues before and after purchase for mobile plans and charges for services and content.

The practice of cramming, where unauthorized charges appear on a consumer?s phone bill, may also be examined.

?I think the most interesting aspect is how the FCC is potentially looking at charges by third parties, marketers allowing unauthorized charges to be billed to wireless accounts, that is, cramming issues,? Mr. Lustigman said.  ?Cramming has generally been handled by FTC.

?The FCC has invited inquiries and comments from the FTC and from the states, in particular Florida, with respect to their efforts in dealing with cramming issues,? he said. ?This is very significant, because it?s a potential expansion of the FCC?s powers.

?The FCC could potentially be looking at how and when people enroll in mobile services, what types of disclosures people are getting, what they?re buying and how much they?re being charged.?

The watchdog is examining the impact of competitive market conditions in the wireless marketplace, specifically scrutinizing the competitive balance among carriers.

The commission has expanded its purview to examine access to broadband services due to the growing number of consumers accessing the Internet via smartphones.

The FCC inquiry also includes an examination of segments including third-party products and services such as mobile applications and how they are distributed to consumers. This includes exclusivity agreements and applications stores.

?The FCC?s wants to examine what they call downstream application services, what most people know as mobile apps, especially whether or not the carriers are restricting access to certain types of apps,? Mr. Lustigman said. ?It?s probably the most controversial aspect of the inquiry.

?A number of the larger software companies have commented that they?ve been unable to get access to the number of wireless subscribers they want,? he said.

?The FCC may not have jurisdiction over  handset manufacturers, but it would have jurisdiction over carriers potentially blocking access to a particular app.?

Marketers? response
Businesses that have concerns about innovation and competition should submit comments by the end of the month and expect a response by Oct. 15.

Businesses that have concerns about truth-in-billing should submit comments by Oct. 15 and expect a response by Oct. 30.

Marketers of mobile services or mobile applications should consider the potential impact of FCC regulation.

?The MMA is composing a response to these things, and anyone who has a stake in mobile, we should get together and back the MMA?s response to give ourselves as much weight as possible,? said Patrick Moorhead, director of emerging media at Microsoft?s Razorfish, New York.

Strangely, the inquiry has little to do with marketing in the mobile ecosystem. Marketing is not even mentioned as a consideration in any of the statements from FCC chiefs.

Still, there may be an opportunity for marketers and agencies to use the occasion of the FCC?s inquiry to advance concerns regarding carrier support and endorsement of mobile marketing in the U.S.

?We have a serious problem here in the U.S. of interoperability of MMS, but we as an industry have been unable to lobby the carriers effectively to make those changes on their own,? Mr. Moorhead said. ?Mobile commerce will probably become more of a reality for consumers over the next couple of years.

?We need to make it easier for consumers to make transactions at the carrier billing level,? he said. ?Providing that billing infrastructure would open up flood gates of opportunity for mobile commerce.?

Short code provisioning has been an absolute disaster at the carrier level, according to Mr. Moorhead.

?Despite crying foul at CTIA and other conferences, we haven?t been able to put sufficient pressure on the carriers to expedite the short code approval process,? Mr. Moorhead said. ?Whether that falls into innovation, it?s got to get easier if we?re going to continue to mine value from SMS for our clients and provide value for consumers.

?The FCC should focus on facilitating marketers across various carriers for the benefit of consumers and advertisers looking to connect with them via the mobile channel,? he said.

The FCC appears to be headed towards becoming a more proactive consumer-friendly agency with a desire to address consumer protection and environmental issues in the context of developing a wireless marketplace.

The FCC is looking to create metrics for wireless innovation and track innovation in the industry and looking to understand their own role in supporting and encouraging innovation.

The commission is also looking into the relationship between wireless and research and development innovation and searching for ways to support innovation and experimentation.

The watchdog's increased focus on the wireless industry should include creating a dialogue about the value of application developers and expanding network coverage and bandwidth with the goal of creating a more fluid, and hence more valuable, media inventory model across carriers.

To the extent that U.S. carriers treat networks with a degree of openness and portability, mobile ad inventory will become significantly less fragmented, and consequently more accessible and valuable to marketers.

Marketers need to continue to advocate such a system, where mobile ad inventory, regulations around SMS marketing and cross-compatibility of services like MMS are relaxed, combined and allowed a greater degree of flexibility and accessibility.

This would enable a truly reach-scaled media opportunity to both consumers and marketers alike.

?A few bad apples could spoil the bunch, so agencies and clients playing in the mobile space are highly attuned to not letting that happen,? Mr. Moorhead said. ?The MMA advocating best practices goes a long way towards doing that.

?I would like to think we can be a self-policing body following MMA best practices so government intervention is not necessary,? he said. ?Almost ubiquitously marketers deploying SMS have deployed those MMA best practices so that opt out instructions are included in messages.

?I?m proud because we?ve avoided the problems email marketing has had in terms of being perceived as spam.?

Please click here to access the archived Webinar.