Ed Harbison: Phone ruling will affect area market

Special to the Ledger-EnquirerAugust 2, 2013 

To succeed in promoting competition within the mobile device market, local and regional carriers need great devices to complement the innovative services and customer support that they provide. And most, if not all, carriers will tell you that Samsung's Android-powered smartphones are integral to such a product portfolio. What's more, the phones are much sought after among mobile phone customers given the various price points at which they are available.

Accordingly, a significant portion of any carrier's business is potentially affected by the U.S. International Trade Commission's (ITC) final determination as to Apple's complaint against Samsung. It's no wonder, then, that some wireless carriers have come out vehemently opposed to an import ban on certain of Samsung devices.

To impose a penalty of the sort would risk disruption and harm to carriers in Georgia and across the country and, in turn, threaten to stifle the innovation that carriers seek to bring to the industry and its customers. U.S. Cellular, to name just one regional carrier doing business with Samsung, reports that more than one-quarter of total handsets sold are Samsung phones. Eliminating Samsung phones from among U.S. Cellular's product offerings would interfere with the latter's supply chain, sending a ripple effect through the market that is likely to be detrimental.

The adverse impact would only be heightened as to local carriers, many of which could be put out of business altogether if the Commission issues a remedy that is overly broad. As Ting Wireless, a Mississippi-based local carrier stated in public comments to the ITC, "having just finished its first year in operation … Ting cannot afford to have an unclear or inconsistently-applied ruling disrupt its supply of Samsung Galaxy devices." To do so, Ting's statement continues, "may seriously damage [Ting]" and other "innovative businesses."

Perhaps most troubling is the fact that whatever decision the Commission makes will be passed off to U.S. Customs and Border Protection (CBP). While an outstanding agency in its own right, CBP is not equipped with the necessary resources to adjudicate whether and which devices can and cannot be imported and sold in the U.S.

If, for example, the Commission were to hand CBP a drawing of a rectangle with rounded rectangles, a speaker and a flat front display with no further instruction, CBP may err on the side of caution in excluding non-infringing devices, a judgment call that has injurious and far-reaching implications -- namely, a decrease in the number of U.S. mobile devices offered at various price points and, in turn, the aforementioned disruption of business operations among local and regional carriers.

It goes without saying, then, that the Commission should carefully consider the effect that its decision will have on third parties such as local and regional carriers, consumers and, more generally, the public interest. And if it determines that an exclusion order must attach, the Commission must issue clear, focused and enforceable guidance to CPB. As U.S. Representative Hank Johnson of Georgia's 4th congressional district wrote in a statement to the ITC, an exclusion order that leaves room for interpretation could risk improperly impacting billions of dollars in smartphone commerce. The sentiment has been echoed by at least eight other congressional representatives from Alabama, New Jersey and New York. Anything less would run counter to the Commission's mission of remedying unfair trade practices and promoting healthy competition. Equally important, anything less would prove harmful to local and regional businesses in the Georgia region.

Ed Harbison, D-Columbus, represents District 15 in the Georgia Senate, where he serves on the Regulated Industries and Utilities Committee; ed.harbison@senate.ga.gov.

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