ARLINGTON, Va. -- For CTIA, the trade association that represents the wireless industry, the current policy debate is a tricky one.

For the past several weeks in Washington, lawmakers and advocacy groups have been ramping up their calls for the government to step in and end exclusivity agreements between wireless carriers and device makers.

Today, Michael Copps, the acting chairman of the Federal Communications Commission, said he has directed the agency's wireless bureau to open an inquiry into the matter.

That debate puts CTIA at a bit of a crossroads. Its four largest members, Verizon Wireless, AT&T, T-Mobile and Sprint, have made exclusive device agreements a standard practice, and a cornerstone of their marketing operations.

On the other hand, many of CTIA's smaller members decry the deals, claiming they freeze them out of the hottest new phones on the market, putting them at an unfair competitive disadvantage. Just yesterday, the chief executives of U.S. Cellular and Cellular South complained to a Senate panel about the exclusivity deals, trading barbs with a top AT&T executive on hand to defend the practice.

So what is CTIA to do? Well, with 90 percent of the wireless market in the hands of the big four, the trade association representing the industry writ large seems to be leaning toward the majority.

Here at a conference on broadband policy, a very popular topic in this young administration, Christopher Guttman-McCabe, CTIA's vice president of regulatory affairs, engaged in an on-stage debate with Public Knowledge President Gigi Sohn, who took him to task for the practice.

"There's nothing in it for the consumers to have exclusivity," Sohn said, arguing that the market would benefit if all devices were available on all networks.

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Guttman-McCabe approached the issue carefully.

"We have members on both sides of the handset exclusivity debate," he said. But CTIA is a powerful lobby that advocates for a hands-off approach from the government, so he quickly moved to defend the exclusivity agreements as benefits both to consumers and competition. And, after all, it was a debate.

"If everyone has every device, there's no competition for the development of the device," he said. "If the iPhone hadn't come out would we have seen the Palm Pre?"

That argument essentially follows that carriers drive innovation by subsidizing the sales of a new device in exchange for the promise that the consumers who buy it will sign up for their network, thereby introducing new devices to the market, driving down prices and spurring competition.

"If you take your proposal to its logical conclusion, every carrier gets access to every handset, so there's no competition," he told Sohn.

For Sohn, a consumer advocate, that argument doesn't wash. She'd like to see the Federal Communications Commission apply a decades-old ruling that required AT&T to open its wireline network to new devices updated to apply to the wireless market.

"Why shouldn't it apply to wireless?" Sohn said.

For wireless carriers, that would mean not only devices, but applications. The poster child for this controversy is AT&T's (NYSE: T) treatment of Skype. AT&T's deal with Apple (NASDAQ: AAPL) allows iPhone users to access the VoIP service when they're connected to a Wi-Fi network, but not on AT&T's own 3G data network.

Guttman-McCabe echoed the sentiment of AT&T's Paul Roth at yesterday's Senate hearing, wondering why a company should be required to facilitate the service of its competitor.

CTIA typically parries regulatory affronts to its industry with comments about the explosive innovation that has swept over the wireless market, describing it as one the fastest-growing economic success stories in the United States today.

At the same time, the largely unregulated industry is facing government scrutiny on a number of fronts. In addition to the debate over exclusivity and open access (which in a certain context bears a strong resemblance to the fight over Net neutrality), lawmakers and regulators have been eyeing text-messaging rates, roaming agreements and the so-called special access fees AT&T, Verizon and Quest charge smaller carriers for tapping into their data networks.