Well, this is interesting: the FCC Chairman announced that they do not believe wireless carriers should be able to block certain types of Internet traffic, according to the AP release a few hours ago. The thrust of the comments seems to be that they want to extend Internet usage rights over the wireless carrier networks.

The chairman is now proposing to make it a formal rule that Internet carriers cannot discriminate against certain types of traffic by degrading service. That expands on the principle that they cannot “block” traffic, as articulated in a 2005 policy statement.

It’s unclear how the rules would apply in practice to wireless data. For instance, carriers officially restrict how Internet-access cards for laptops are used, but rarely enforce the rules. The government also has been investigating Apple Inc.’s approval process for iPhone applications, but Genachowski isn’t directly addressing manufacturers’ right to determine which applications run on their phones.

It does highlight that if you can control the applications used (available) on the devices, you can in turn control the content. Unless of course you break the protection on the phone. But still, this would appear to put the handset providers in the driver’s seat as far as what applications are acceptable. How long will it be before the carriers try to dictate acceptable applications when they negotiate deals? How will the carriers attempt to protect their turf and their investment? Could users say “screw both of you” and encrypt all of their traffic? Personally I like the idea, as it does foster invention and creativity outside the rigorous use models the carriers and phone providers support today. This is going to be a complex and dynamic struggle for the foreseeable future.