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Spectrum Stumbling Blocks
May 21, 2012
Last week, I participated in a panel discussion on "Why Tech Issues Matter" with folks from across the ideological spectrum. Despite our vastly different views on the proper size and scope of the federal government and its approach to regulating the tech space, there were a few items where we had almost unanimous agreement. One such issue was the need to free up more spectrum for use in building out America's telecommunications networks. There is widespread acknowledgment in the tech community that we could soon face a crippling capacity bottleneck absent swift action to reallocate spectrum to where it is most needed.
In fact, the Obama Administration set a goal for federal agencies to identify an additional 500 MHz of existing spectrum that could be reallocated for use in building the capacity of mobile networks. But as Larry Downes writes at Bloomberg Law, those efforts haven't borne much fruit. Despite a lot of discussion and debate in recent years, there has been very little in the way of actual movement on this existential crisis.
One aspect of that agonizingly slow progress has been (surprise!) government failure. The National Telecommunications and Information Administration produced a report on 100 MHz of spectrum currently held by federal agencies that could be better used for mobile broadband. But, as Larry detailed,
"[The] 20 agencies involved in the study demanded 10 years and nearly $18 billion to vacate the spectrum—and insist on moving to frequencies that are already assigned to other public or private license holders."
So, instead of getting their act together and moving quickly to solve at least 1/5th of the spectrum gap identified by the Obama Administration, this group of federal agencies is instead engaged in a damaging stand-off that threatens to cause even more delay and disruption.
Another stumbling block on the road to more efficient use of spectrum is the "Hell No Caucus," a set of "public interest" groups that have loudly and repeatedly opposed many of the biggest recent spectrum plays. Though every member of the Hell No Caucus would tell you they support more efficient allocation of spectrum, their actions seem to belie their stated positions. They have lobbied Congress and the Federal Communications Commission vociferously to rig the results of voluntary incentive auctions by including rules that would exclude companies like AT&T or Verizon from bidding on spectrum, despite the fact that the demands of their customers make those companies most likely to pay hefty sums for greater capacity.
But they haven't been content to limit their advocacy to spectrum legislation; they've also been extraordiarily active in lobbying the feds to wield their power to prevent so-called "secondary spectrum market" deals. The Daily Caller covered the phenomenon last week, calling groups like Public Knowledge and Free Press the "usual DC allies" of interests seeking the destruction of spectrum deals between private entities.
First it was the proposed merger of AT&T and T-Mobile, a deal widely viewed as an attempt by AT&T to secure T-Mobile's valuable spectrum. Opponents of the deal claimed they were defending competition, but T-Mobile's parent company, Deutsche Telekom, has repeatedly stated that they're not interested in operating the company and as such it has been withering on the vine. The (unfortunately) successful effort to kill the merger, which NTU strongly supported, has left AT&T without the additional spectrum it sought and T-Mobile is now a "zombie carrier," in the words of one analyst, incapable of providing much in the way of vigorous competition. So, mission accomplished for the Hell No Caucus.
Now the big food fight is over the new Verizon-SpectrumCo deal (SpectrumCo is a joint venture of Comcast, Time Warner, and Bright House). Verizon seeks to buy $3.6 billion worth of spectrum on which SpectrumCo is not building, but the Hell No Caucus has come out in full force to oppose the transaction, again citing nebulous concerns about "competition." They are vesting their hopes in a friendly FCC which, after squashing the AT&T-T-Mobile merger, has clearly shown a propensity for killing mutually-beneficial agreements between private companies.
This is frustrating, to say the least. We're staring a very real crisis right in the eyes, one that threatens to bring the scintillating pace of innovation and improvement we've seen in mobile broadband over the last decade to a screeching halt within a few short years, and the response from some groups has been to delay and destroy many of the deals that would offer hope in avoiding that fate. Even more frustrating for me, as a lonely pro-taxpayer, limited government activist is how they pass that off as "public interest" lobbying when the public interest has suffered such damage from their work.
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