Analysts are bullish on the potential for wireless...

its sponsored data plan when he said at the Computer History Museum (CD Jan 10 p6) the net neutrality order “did not discourage this type of two-sided market for mobile uses,” wrote Stifel Nicolaus analysts Christopher King and David Kaut in an analyst note Friday, quoting Wheeler’s speech. King and Kaut expect the U.S. Court of Appeals for the D.C. Circuit to soon overturn the FCC’s prohibition against “unreasonable discrimination” by wireline broadband providers, which they said would free most wireline telcos and cable companies to pursue wireline data-sponsorship plans “and even paid-prioritization agreements,” they said. Spectrum congestion makes wireless data caps much more restrictive than wireline data limits, making wireless “a natural place to test out data-sponsorship offers,” the analysts said. If those offers “catch on,” and the court reverses the net neutrality rules, they expect cable and wireline companies to also pursue such plan. Wheeler remarks on the importance of interconnection and openness on the Internet suggest “some willingness to at least consider reclassifying broadband Internet access” as a more heavily regulated Title II telecom service, they said, “if he believes it necessary to preserve an FCC broadband oversight role.” Paul Gallant of Guggenheim Partners said Wheeler’s comments are “encouraging for both wireless and cable/telcos that want to explore new broadband monetization opportunities.” Gallant sees Wheeler’s comments on new business models in the wireless arena as “quite encouraging for wireless operators,” he said. Cable operators and telcos can likely also explore new business models, as Wheeler encouraged experimentation, wrote the analyst. “But these models will face closer FCC scrutiny than new wireless services and will need to be carefully crafted to pass both regulatory and political scrutiny."