What’s A POTUS SOTU Shout Out On Wireless Worth?

Last night, the wonkiest corner of telecom policy experienced its 15 picoseconds of fame when President Obama invoked spectrum policy in his State of the Union (SOTU) Address. In nerdness terms, this would be like James Franco and Anne Hathaway pausing before the Best Picture Oscar to announce this year’s Nebula Award for Best Dramatic Presentation.

Needless to say, I am uber-pleased to have the geekiest of Presidents acknowledge the wonkiest of my issues. But does it do any actual good? I explore this below . . . .

For those who missed it, the President said:

Within the next five years, we’ll make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans.  This isn’t just about — (applause) — this isn’t about faster Internet or fewer dropped calls.  It’s about connecting every part of America to the digital age.  It’s about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world.  It’s about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.

The cynical among us will note that many Presidents have used the SOTU to propose big ideas that end up going nowhere. For example, I’m still waiting for my hydrogen fuel-cell powered car. But that doesn’t make a SOTU shout out a waste of time. When the President actually takes the time to endorse an idea or concept in what most regard as his biggest speech of the year, it carries some weight here in Policyland. For starters, it can lift an issue out of obscurity (although I’ll bet more Americans remember the salmon joke).

Real World (well, DC World) Impacts

So what’s the practical payoff? Most importantly, it gives direction to the federal agencies who, after all, work for the President. It gives rhetorical support to members of Congress trying to move the President’s agenda forward, and can create problems for members of the President’s party who may have other ideas and don’t want to be perceived as opposing their own President. This can be especially helpful for the vast majority of members not on the relevant Committee and Subcommittee who would otherwise have no clue about the issue before the floor vote.

So the President endorsing wireless as a major platform for innovation gives a modest, general boost for Federal Communications Commission (FCC) Chairman Julius Genachowski’s wireless agenda. But the “wireless agenda” covers a lot of ground, and a high-level Presidential endorsement of the concept does not necessarily translate into making any specific goal any easier. Still, it gives Genachowski a good rhetorical club for pushing things like incentive auctions. It also gives Genachowski and Assistant Secretary Larry Strickling (Administrator of the National Telecommunications Information Administration (NTIA), the agency that coordinates federal spectrum use) a boost in trying to get other Federal agencies to cooperate in identifying spectrum for auction and – I hope – dynamic reuse.

You’ll note I talked a lot about auctions just now, which is unfortunate. This is a good time therefore to remind everyone, as Senator Olympia Snowe did a few weeks ago, that getting spectrum out there for broadband involves a heck of a lot more than just incentive auctions. I will go further and remind folks that all auctions, whether incentive auctions or clearing more federal spectrum, will not solve our wireless broadband problems. At best, they are one piece of the puzzle, primarily useful for congested urban areas and for helping out providers competing against AT&T and Verizon and their substantial spectrum advantage.

“Spectrum scarcity” of licensed spectrum has not, generally been a problem for rural wireless deployment. OTOH, access to unlicensed or non-exclusive “licensed-lite” spectrum makes a substantial difference to small wireless ISPs (WISPs). WISPs provide wireless broadband access in places licensed carriers don’t find profitable to deploy. Which brings up another point about boosting access to unlicensed spectrum and other mechanisms for spectrum reuse (like secondary markets, as I’ve proposed before), you can use them now. It doesn’t take an act of Congress or a lengthy fight over service rules and auction rules. Once you set the certification rules, you build the devices and people deploy. The quiet success of the 3.65 GHz “licensed lite” band, which went from final resolution of the rules to deployment by WISPs in a little over a year, demonstrates that people can put cheap unlicensed/non-exclusive licensed spectrum access to good use.

The other area where the President’s SOTU remarks help is on Genachowski’s push to reform Universal Service Fund (USF), especially his proposed Connect America Fund and mobility fund. Bluntly, the biggest barrier to rural deployment is not the lack of licensed spectrum, it’s the economics. Fellow Wetmachiner (quiet for far too long) Gregory Rose did this report for New America Foundation showing that for the last 8%-10% of the rural population, the population is simply spread too thin to create a reasonable rate of return, even for wireless. If they are going to get served, we need new business models, new technologies, new public funding, or some combination of these.

Not surprisingly, current USF recipients are not excited at the prospect of restructuring the fund, which they see as taking bread out of their mouths. Broadband providers in urban areas, such as cable providers, do not particularly want to contribute fund wireless companies like AT&T and Verizon. As a result, getting USF reform through Congress has remained fairly difficult despite bipartisan support. This is likely to be even more of an uphill climb given the hostility of some key Republicans. So every little bit of boost to push this forward helps, and I expect Genachowski is grateful to his old Harvard Law buddy for the help.

Bottom line, it’s absolutely helpful to get mentioned in the State of the Union, and it gives you bragging rights at the next Cabinet meeting, but it only goes so far. Think of a POTUS SOTU shout out as the Policyland equivalent of a celebrity endorsement. Bill Shatner may get you to notice Priceline, which is half the battle in a competitive market, but that doesn’t mean you’ll use them no matter how much of a Star Trek or Boston Legal fan you are. You still need to make the case on the merits and play the politics to make things happen.

Stay tuned . . .