Yesterday at the CTIA Wireless IT & Entertainment 2009 conference, both FCC Chairman Julius Genachowski and AT&T Mobility CEO Ralph de la Vega gave keynote addresses. While Genachowski stressed the importance of developing "sensible rules of the road" for wireless network neutrality, de la Vega strongly urged that wireless networks must be managed, repeatedly suggesting that net neutrality regulation would let a few heavy data users "crowd out the many" on its 3G data networks.

de la Vega, who is also the incoming chairman of the CTIA board, spent the majority of his time patting the US wireless industry on its back for being the most competitive, offering the "best value," and providing more choices that anywhere else in the world. Based on the statistics he cited, those things are true, but his analysis fails to recognize that the US is well behind other areas of the world—especially Europe and many parts of Asia—in 3G network rollout, reliability, and speed. He also noted that "US wireless customers can select from among 630 devices from more than 30 manufacturers," but didn't mention that many of those devices are only available on a particular network—so choosing a particular device limits your choice of network, and choosing a particular network limits your choice of devices.

de la Vega also spent much of his speech stressing the "unique constraints" the wireless networks have that wired networks don't. AT&T says it has seen a 5,000 percent increase in data traffic over the last five years. de la Vega noted that the top 3 percent of its smartphone users are responsible for as much as 40 percent of smartphone data traffic. "Speed and spectrum limitations can allow a few data greedy customers to ruin to for everybody else," de la Vega said. "Wireless needs a different public policy to ensure the few cannot crowd out the many."

The subtext here is that de la Vega believes net neutrality regulation for wireless networks just won't work. Instead, wireless network operators should be free to throttle traffic from heavy users, much like Comcast tried to do when it attempted to throttle P2P traffic on its network last year. Those attempts caught the ire of the FCC, and brought net neutrality policy debate to the forefront. Ultimately, the FCC opposed Comcast's actions, barring it from trying to block specific types of data. While Comcast has a lawsuit underway to attempt to reverse the order, the company has since implemented a data-agnostic traffic management system, which so far seems to fall under what the FCC deems "reasonable network management."

However, AT&T may be a victim of its own success. It signed a multiyear agreement to be the sole provider of Apple's iPhone, which is credited with attracting a large number of new subscribers to AT&T. It's also credited with an explosion in data usage, since users now have access to a functional, complete Web browser, as well as apps of all kinds that make use of network data in fun, innovative ways. But iPhone users have been discovering that claims of "fastest 3G network" or "more bars in more places" are often just empty promises. Meanwhile, AT&T has recently signed deals to provide data access for an international version of Amazon's Kindle as well as an Android smartphone from Dell.

Beyond the issue of reasonable network management, though—which Genachowski and the FCC already support—AT&T continues to block some uses of the iPhone. The situation has been quite vexing for iPhone users, who also tend to be the company's highest paying customers. While Apple added MMS capabilities to the iPhone earlier this summer, it took AT&T several months to enable the feature, prompting dozens of lawsuits. Earlier this week AT&T finally lifted its ban on VoIP apps from using its 3G network, noting that it hadn't placed such bans on other phones on its network. Yet despite these improvements, the company still selectively blocks some applications from streaming video and has yet to enable the data tethering feature that Apple added to iPhone OS 3.0 earlier this year.

For its part, the FCC recognizes that mobile business is booming, and is a growth opportunity for the US economy. Genachowski stated in his keynote address that the Commission will be doing its part to make more spectrum available and to reduce the red tape required to acquire it. However, he also reiterated that network management of some sort is necessary, so network neutrality regulation won't prevent AT&T from being able to sensibly manage its network.

AT&T is certainly not alone in its desire to manage wireless data customers. Verizon imposes a monthly limit on its 3G modem users, banning them from using VoIP and P2P applications. The restrictions are present, even if they are not always enforced. All ISPs—wired and wireless—have a need to manage their network to ensure that the traffic keeps flowing smoothly. The problem comes when the management is secretive and appears arbitrary. de la Vega isn't letting on what measures the telecom giant might take, but if it fails to be anything but open and transparent about its actions, the uproar won't be pretty.