Spectrum

Spectrum issues, community wireless, muni broadband

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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How AT&T Eating T-Mobile Will Enhance AT&T’s Special Access Monopoly.

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“Special Access” is one of those fun telecom terms that makes no sense to those outside of telecom. Briefly, it’s the rate that a regulated incumbent local exchange carrier (ILEC), like AT&T, charges for certain non-residential telecom services. As you can see, even my attempt to describe in one sentence without jargon failed, that’s how complicated this is. However, like many very complicated things, Special Access is one of the important ingredients that goes into how much people pay for phone and broadband service. You can find a five minute video of me explaining Special Access and why everyone needs to care about it here.

Not surprisingly, the issue has come up in the AT&T/T-Mobile merger. Sprint says that AT&T absorbing T-Mobile will make its Special Access problems worse and allow AT&T/T-Mobile to price it out of the market. AT&T responded in this blog post, in part by asking “How could absorbing T-Mobile, which doesn’t provide Special Access, hurt the Special Access market?” Sarah Jerome over at the Hill asked me that question, prompting me to offer this response (originally printed here), which I expand on a bit 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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White House Makes Intelligent Case For Incentive Auctions.

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Yesterday I attended the White House event on incentive auctions. It was probably the most sensible public event on the pro-incentive auction side I’ve attended to date. I have had several discussions with Federal Communications Commission (FCC) staff that persuade me that, if Congress gave the FCC generic authority to do voluntary incentive auctions (subject to limitations to protect broadcasters – including low-power broadcasters – that want to stay in the broadcasting business), they could design a pretty good auction that would get more spectrum out for both licensed and unlicensed broadband access. Unfortunately, just about every public discussion on incentive auctions tends to focus on either a few simplistic talking points (more spectrum=good!) or, worse, has been about trying to persuade members of Congress that spectrum auctions are magical money trees that let you solve the deficit problem without raising taxes (just look at how the 2008 700 MHz auction completely eliminated the federal deficit).

So a pro-incentive auction event that does not make me grit my teeth or put me to sleep is worth celebrating.

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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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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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Join Me For Lunch and Spectrum Policy At Senate 2-23-11

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Tomorrow, from Noon-1:30 p.m., I will be at the Senate Russell Office Building, Room 253,  as part of this exciting event on spectrum policy. The big draws will be Phil Weiser, Senior Adviser to the National Economic Council, Larry Atlas, Senior Adviser to the NTIA Administrator,  and Ruth Milkman, Chief of the FCC’s Wireless Bureau. Expect them to explain why Obama is so pumped up about wireless. Singing back up will be yr hmbl obdn’t blogger, Michael Calabrese from New America, Paula Boyd from Microsoft, and Rick Whitt from Google.

OK, you have to be totally into spectrum policy — or told by your boss you need to understand spectrum policy — to get as excited about this as I am. But there will be sandwiches.

to RSVP, so you can be sure to get your sandwich, click here.

Stay tuned . . . .

I Apologize To CTIA/CEA For Needless and Counterproductive Snark

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As occasionally happens from time to time (indeed, as some might say, more than occasionally), I get worked up about an issue or — even worse — fall in love with my own cleverness and snark and say things that I regret on reflection and need to publicly apologize. Ideally, of course, I would avoid saying such things in the first place and I do not pretend that an after the fact apology somehow makes everything all better. When it does happen, however, the honorable thing to do is make the apology and correction and take my public drubbing.

Which brings me to yesterday’s post about the CTIA/CEA Report projecting $33 bn in revenue from incentive auctions. I stand by my criticism of the report. They do not address how many stations in the top markets need to participate to reclaim the 120 MHz of broadcast spectrum on which they base their estimate and their projected payout to broadcasters is, in my opinion at least, far too low to induce any broadcasters to participate. However, it was needlessly snarky and counterproductive to refer to this as an “infomercial” or otherwise imply deceptive tactics. As I’ve said myself on a number of occasions, we have better and more productive policy debates when we stay focused on the merits and avoid gratuitous insult. That doesn’t mean being all sweetness and light or unduly dry (Lord knows this stuff is dry enough already). But it does mean exercising some restraint and remaining within the bounds of reasonable debate.

As readers know, I dance pretty close to those bounds on a regular basis. That imposes a responsibility to publicly apologize when I cross over it. My apologies to CTIA and CEA, and I have edited the offending post to reflect this.

Stay tuned . . . .

Why The White House and CTIA Don’t Agree On Incentive Auction Revenue, And Why I Think Both May Be Wrong.

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The White House budget proposed last week contains an estimate of about $28 billion from auctioning federal spectrum and giving the FCC authority to conduct incentive auctions.  By contrast, the CTIA – The Wireless industry Association — and the Consumer Electronic Association (CEA) have published a study showing that the FCC could raise $33 bn from an incentive auction of the broadcast bands alone. So what gives?

The short answer is that spectrum auctions are extremely hard to predict, and incentive auctions are even harder to predict because we’ve never done one before. The longer answer is that because the White House is banking on the revenue as part of the budget process with real world consequences, they have therefore hedged against uncertainty by including an easier to estimate spectrum auction. CTIA/CEA, have written an advocacy piece. As with all such pieces, it tends to accent the positive. Unfortunately, the Report fails to address some rather pivotal issues, a factor that renders it of rather limited utility for resolving what I consider the most critical question no one has answered: will enough broadcasters participate in a voluntary auction to make it happen at all. It is on this point in particular that I remain profoundly skeptical.

Fair warning, as with all spectrum policy posts, this one tends to run pretty long. Still, I’m hoping the prospect of all that money  will rivet folks as I unpack the “known unknowns,” the “unknown unknowns,” and why I raise a skeptical eyebrow over the CTIA/CEA estimate below .  .  .  .

UPDATE: As I’ve explained here, I’ve edited this article considerably to take out some unwarranted snark on my part against CTIA/CEA.

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Why Did The White House Support Reallocating D Block? It’s Smart Politics.

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The announcement that the White House that it would support reallocating the D Block – the 10 MHz of spectrum left over from big broadcast band auction of 2008 (the 700 MHz Auction) – to public safety use rather than auction it for commercial use defies conventional wisdom on two fronts. First, the National Broadband Plan called for an auction of D block to commercial providers as a means of providing critical spectrum for broadband, using the revenue to fund the construction of the public safety network, and giving public safety access to the rest of the 700 MHz band. Given that the Administration generally supported the FCC’s assessment that we have a looming “spectrum crisis” (although they took no position, until now, on D Block), why pull 10 MHz of prime spectrum ready for auction out of contention? Second, conventional wisdom holds that because of deficit concerns, lust for auction revenue will drive spectrum policy. But the White House not only endorses taking prime spectrum off the market, it wants to spend additionally billions on public safety infrastructure (under the FCC’s original plan, the auction of D Block would fund the build out of an interoperable national public safety network). So what happened?

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