Life In The Sausage Factory

The mechanics of how Washington works

CBO Scores The Senate Spectrum Bill (S.911): No Spectrum Pots of Gold — Really.

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Last week, the Congressional Budget Office (CBO) issued its “score” (how much a bill will cost or earn for the U.S. Treasury) for S.911(aka The Rockefeller/Hutchison spectrum bill). CBO estimated that all spectrum auctions proposed in the bill — incentive auctions, new federal spectrum, and generally extending the FCC’s spectrum authority — would net $24.5 billion. After expenses, including reallocating the D Block to public safety, the bill ended up netting only $6 billion for deficit reduction, disappointing supporters who had promised $10 billion in deficit reduction. More importantly than the revenue, however, the CBO explanation of the score highlighted the following for anyone who actually read more than the bottom line:

  1. We have no way to predict what an incentive auction will actually make, and have a lot of doubt this will work;
  1. We don’t believe you can get more good spectrum (the kind that fetches billions of dollars) out of the federal government;
  1. Trying to do spectrum policy right is very expensive.

For various reasons, however, CBO doesn’t come right out and say this in the same bold way I just did above. Instead, they drop little dollops of wisdom in the text, which requires a certain amount of decoding from Washington Weasel speak. Happily, I brought my Weasel Word Decoder (don’t come to Washington without one!).

CBO score decoded below . . . .

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PK Action Alert To Save the Future of Unlicensed Spectrum

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Despite the obvious reliance on unlicensed spectrum by Americans every day in the form of everything from wifi to baby monitors to RFID, the current mania for spectrum auction revenues combined with lobbying from companies opposed to the TV white space has put the future of unlicensed spectrum at risk. This is particularly true under the discussion draft circulated by House Republicans last week. That draft would require that before the FCC could allocate any new spectrum for unlicensed use, it would first have to have an auction that would allow companies to buy the spectrum for exclusive use. Only if everyone collectively outbid AT&T or Verizon for unlicensed would the spectrum go to unlicensed use. As Stacy Higginbotham at GigaOm notes, this would have devastating impact on the future of unlicensed and the innovation that comes out of the unlicensed bands.

As if that were not enough, the proposed bill literally allows companies to buy their way out of FCC consumer protection regulation.

We are trying to stop this before it’s too late.  Public Knowledge has created an Action Alert asking anyone who cares about protecting unlicensed, or opposed to letting companies literally buy their own rules, then help us this Friday (tomorrow) by telling your member of Congress not to sell off our digital future or let companies buy their way out of public interest obligations. Sign up for the PK mobile Action Alert and you will get a text message tomorrow letting you directly contact your member of Congress so you can tell them why this bill is a really, really bad idea.

I reprint the PK Action Alert below.

Stay tuned . . . .

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The AT&T/T-Mobile Fine Print

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Anyone who has a service contract with AT&T knows that there are two parts: the advertisement and the fine print.  The advertisement promises all kinds of wonderful things. The fine print explains how AT&T really has no legal obligation to provide them, and you have no recourse if AT&T doesn’t live up to its terms. The ad has a little asterix (*), to let me know to look for the fine print. For example, AT&T recently offered me a free 4G phone*. *DISCLAIMER: Provided I sign up for a minimum $15 data plan, 4G is available in limited areas, and other restrictions apply. They also promise I can download amazing videos*, DISCLAIMER: *provided I don’t exceed my capacity cap, in which case I will pay lots more money. Etc.

Unsurprisingly, the AT&T/T-Mobile deal comes with its own set of fine print. AT&T and its allies make all kind of promises about how the deal will encourage mobile broadband and create jobs ‘n stuff, while the actual FCC filings have all kinds of wonderfully crafted (from a legal perspective) fine print that explains all the limitations on these promises. Alas, AT&T doesn’t do nearly as good a job with the helpful* for fine print on it’s advertisements for approving A&T/T-MO as it does on its regular advertisements. I want to especially point this out to all the state governors that have supported the merger based on the advertising implying that the mighty AT&T lion is going to go all Aslan and spread broadband and jobs after it devours the sickly gazelle that is T-Mobile.   Based on the fine print, you have as much chance of seeing rural broadband deployment and job creation as the average AT&T iPhone user in San Francisco has of connecting a call and enjoying “unlimited downloads”* (*subject to bandwidth cap, phases of the Moon, and wicked packet-intercepting gremlins).

Advertising matched with FCC filing fine print below . . .

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My Insanely Long Field Guide to Lightsquared v. The GPS Guys

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For some time now, I’ve been rooting for Lightsquared. Despite the fact that it faces tough odds trying to build out an expensive wireless network, a wireless network built from ground up for wholesale only could totally change the wireless market (which is entirely different from the mobile cellphone (aka the “commercial mobile radio service” or “CMRS”)  market, but that’s a rant for another time). But now, I just love the fight between Lightsquared and the GPS industry because it manages to contain everything that makes spectrum policy in this country like running a marathon with concrete blocks on your feet: bad neighbors operating critical systems so they can get away with being prima donnas, hostility from other federal agencies, unanticipated interference issues that crop up on deployment, and efforts to politicize the FCC’s technical process.

And, as always, a special guest appearance by a very tired looking Julie Knapp.

For a spectrum wonk such as myself, it simply does not get better than this. I also get one more real world example where I say to all the “property is the answer to everything” guys: “Ha! You think property is so hot? The rights are clearly defined here. Where’s your precious Coasian solution now, smart guys?” Which usually sends them back muttering that it’s not their fault no one in the real world follows the models that explain how it’s all supposed to work out in the world of rational actors and no transaction costs where unicorns frolic in the golden sunshine.

So, in the latest installment of my occasional “Insanely Long Field Guide” series, I take a lengthy look at Lightsquared, how we got here, and what I think will happen. Short version, ignore all the pseudo-Whitewater nonsense flogged by the conservative conspiracy theorists and complaints that the FCC bypassed their own process. So far, and I do not say this often so please pay attention, the FCC has behaved entirely appropriately, even intelligently. (Yeah, yeah, don’t let it go to your heads.) What matters is that the FCC is about to receive a report that confirms that, yes, when Lightsquared operates it system, it creates interference for existing deployed GPS systems. As a result, only the following things matter:

1. The Lightsquared folks are right about how the GPS guys knew this day would come and conveniently chose to do nothing. But in the short term it doesn’t matter, because the FCC will not allow anything to happen to GPS.

2. OTOH, if the GPS guys get their way, it means taking another 40 MHz of prime spectrum and rendering it useless forever. That also isn’t going to happen. That suggests a phase in/compromise.

3. Whether Lightsquared actually survives the compromise as a viable service will depend on a lot of things. The dimensions of any such compromise will depend on the interference tests. So while it is pretty clear from what’s been leaked that Lightsquared’s system as proposed causes interference with GPS systems, a lot of questions remain about what ought to happen to make it so that GPS and Lightsquared can live together in harmony.

At this point (from my wonkish perspective), the precedent of how to deal with annoying neighbors is almost more important than what actually happens to Lightsquared. If the GPS guys get their “sit on your rear-end veto,” then we can pretty much kiss off spectrum reform in the most useful spectrum bands. Every potentially useful band has neighbors that built systems on the assumption that nothing would ever change. So the FCC either finds a way to balance the interest of incumbents with fostering the expanded use we need for our expanding wireless  demand, or we forget about “spectrum flexibility” and resign ourselves to the current state of the universe pumped up by the occasional auction.

More below . . . .

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Wireless Competition Rumble! Watch Me Take It To The Free Marketeers Where They Live — With Snacks to Follow!

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Ho fellow policy wonks and spectrum geeks! Come watch me and occasional blog buddy (over at PK blog) Rob Frieden take on Arch Free Marketeers Thomas Hazlett and Joshua Wright at an epic, no holds barred, steel cage death match on competition in the wireless world. The Event, “The FCC’s Wireless Competition Report: A Preview” aka “The Wireless Competition Arlington Free-For-All” (because admission is free), will take place next Wednesday, May 18, 4-5:30 p.m., at the Mercatus Center at George Mason University (official announcement with all the info here).

More outrageously exaggerated prose describing the event below!

UPDATE: I initially had this down as being in Fairfax, rather than Arlington, because the GMU main campus is in Fairfax and I misread the event announcement (it is at 3351 N. Fairfax Drive in Arlington). My bad.

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Why Chairman Genachowski Should Appoint Commissioner Baker To Chair The Spectrum Task Force

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Federal Communications Commission (FCC) Chairman Julius Genachowski has a spectrum politics problem problem. On the one hand, he learned from last year’s D Block battle that he needs to stay aggressively on message to sell his spectrum reforms.  His every speech on spectrum therefore reads like a campaign speech for incentive auctions. ‘We have a looming spectrum crisis, we need bold action, Congress must act now to pass incentive auctions.’ But, as Genachowski has discovered, this approach can have unintended consequences. Recently, Commissioner Robert McDowell reported that this focus on incentive auctions created uncertainty in Silicon Valley over the FCC’s commitment to the TV white spaces (TVWS). This follows earlier concerns from Senator Snowe (R-ME) and others that the Chairman’s exclusive public focus on incentive auctions invariably means giving short shrift to other, equally important spectrum reforms identified in the National Broadband Plan.

 

Genachowski moved quickly to reaffirm that support for TVWS remains strong and that TVWS is a big part of the FCC’s  spectrum for broadband initiative. Further, the inclusion of several spectrum items for the next open FCC meeting shows that Genachowski remains committed to broad spectrum reform. But these incidents underscore Genachowski’s difficult dilemma. How can he campaign to push through incentive auctions on the one hand, while making sure that other aspects of the spectrum reform agenda receive the prominence and attention they need to move forward? The fact that anyone could doubt the FCC’s continuing commitment to developing the TVWS despite its broad bipartisan support and support from the Obama Administration spectrum team underscores how little it takes to undermine confidence even in reforms already accomplished.

Commissioner Meredith Baker may hold the solution to Chairman Genachowski’s spectrum politics dilemma.  Genachowski should appoint Commissioner Baker chair of the reconstituted Spectrum Task Force. At the moment, the Spectrum Task Force is co-chaired by Julie Knapp (Chief of the Office of Engineering and Technology) and Ruth Milkman  (Chief of the Wireless Bureau). In an ideal world, having two such extraordinarily qualified experts and Bureau Chiefs heading the Spectrum Task Force would be enough to show that Genachowski is not neglecting spectrum reform outside incentive auctions. But in status-conscious Washington DC, the sad truth is that only a Commissioner can give the Spectrum Task Force the “star power” it needs to reassure everyone that serious work continues along multiple fronts.

More below . . . .

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Upcoming Speaking Events (Both on Net Neutrality)

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Network neutrality remains the issue that will not die, despite the pending court challenge and the actually timely filed court challenge sure to come once the final order is published in federal register (you can read the story behind why this is taking so long here). So my next two speaking engagements focus on the FCC’s Open Internet Rule.

This Tuesday, March 1, I will be at an event called Decoding the FCC’s Net Neutrality Order sponsored by TechFreedom.Org, a relative newcomer to Policyland as an org but run by many familiar faces. After opening remarks by Rep. Marsha Blackburn (R-TN), we’ll discuss Larry Downes testimony and expanded paper on why he thinks the FCC’s Open Internet Order was bad bad bad with a side order of not needed and a side of death-to-freedom fries. But while the anti-NN Order folks certainly have the home team advantage, I and Open Internet Coalition representative Markham Ericson will give them a run for the money.

On Monday March 7, I’ll be speaking on a panel at the American Bar Association Regulated Utility section meeting called “Market Power Analysis in the FCC’s Open Internet Order” where I will reiterate a lot of the ideas from here, here, here, here, and here.

Hope folks will attend. Should be fun, even if we are revisiting old ground.

Stay tuned . . . .

How NCTA Protects Us From An Army of Lazy, Easily Frustrated Terrorists Inspired By “Family Guy.”

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All of these years, I wondered why you find folks in the cable industry who are such a pain in the neck about maintaining and getting stuff from their “public file.” Now I understand that this was really a last line of defense against an army of terrorists and saboteurs bent on destroying our way of life. Unfortunately, according to the National Cable & Telecommunications Association (NCTA), the FCC’s recent action approving the technology for the broadcast white spaces may undermine this defense of our vital public infrastructure. How? Read below. And pray, PRAY, that the FCC heeds this warning and helps NCTA protect us from the army of lazy, easily frustrated terrorists inspired by Family Guy to destroy cable head ends that apparently surrounds us.

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How Dynamic Is The Mobile Internet Marketplace? Good Question. No, It Really Is A Good Question.

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I’m torn between whether or not to respond to Adam Thierer’s post on this subject at Techliberation. Part of the problem is that I’m not exactly sure what the post is trying to say other than that those of us who doubt that we have what I have previously referred to as GMPBIITGBCGHEGMOTFOTE (“God’s Most Perfect Broadband Infrastructure in The Greatest Best Country God Has Ever Given Man On The Face of the Earth”).  As far as I can tell, the argument goes:

1. This post here shows that lots of cool things happen in wireless.

2. The fact that cool things happen proves we have GMPBIITGBCGHEGMOTFOTE. Since regulation is only warranted if we don’t have GMPBIITGBCGHEGMOTFOTE, and since we obviously have GMPBIITGBCGHEGMOTFOTE, anyone who calls for regulation of anything is a moron.

3. Neener neener.

This is a pretty common mode of analysis here in D.C., give or take a few neeners. It proceeds from what I refer to as the “binary” fallacy, which holds that a market is either “competitive” or “not competitive.” A few more nuanced folks might go so far as to say there is a third category called “not competitive enough.” But as far as I know, I’m the last die hard who thinks this is probably not a terribly relevant question.

More below . . . .

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What To Expect From The National Broadband Map.

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Hey everyone, remember the National Broadband Map? As part of the Broadband Stimulus in the American Recover and Reinvestment Act (ARRA), Congress let the National Telecommunications Information Administration (NTIA) use a chunk of money to fund a national broadband map that they had ordered NTIA to create in 2008 as part of the Broadband Data Improvement Act (BDIA). Congress ordered NTIA to finish the project by February 17, 2011. NTIA handed out a chunk of change to make it happen back in 2009, and no one has heard much about it since.

NTIA has now leaked that they plan to release the first iteration of the map on February 17 – the day Congress ordered them to release it. This gives NTIA serious bragging rights at the next social get together with the Federal Communications Commission (FCC). “Yes, we got it done on time.” Asst. Secretary Larry Strickling, head of NTIA will say to FCC Chairman Julius Genachowski over a plate of nachos. “It would have been so awkward to have to ask for a month extension. We spent all our grant money on time as well, despite having to totally invent a multibillion dollar program and a tracking system from scratch. Really, staying on time isn’t that hard. You just need to have a plan. Speaking of which, how goes the National Broadband Plan implementation? Still on track?” At which point Genachowski will smile politely and head off for another mojito.

My predictions for the National Broadband Map below:

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