An Interesting Tea Leaf on AWS-3/M2Z

Well, I keep saying I will do the big posting on AWS-3/M2Z, and keep not getting to it. So I will just drop a short note for the fellow FCC policy junkies who follow this stuff closely. You can find background on the AWS-3/M2Z business here, here, and here.

The FCC extended the filing deadline on the proposal released June 20 to reapportion spectrum between the AWS-2 band and the AWS-3 band (as well as mandatory content filtering). Comments were originally due on a tight deadline (today). This extends things out to a full 30 days for comments and 14 days for reply, so the new dates are July 25 and August 11. That’s less than what the wireless carriers wanted, and it explicitly rejects the request for the FCC to do its own testing. In fact, the whole tenor of the Order provides a rich field for us FCC-ologists to start gazing in tea dregs and rummaging through pigeon entrails.

More below . . .

In the short run, that’s a bit of bad news for M2Z, which is facing the concentrated resistance of the entire wireless industry which (a) really hates the idea of someone deploying a free wireless DSL line everywhere; (b) really hates the idea of a movement away from auctions as revenue maximizing tools with no strings attached to not caring about revenue and focusing on public interest obligations again; and (c) really does have some actual interference issues — which I am so not getting into now and am saving for the long post I keep promising to write. Anyway, the point is that delay gives the CTIA/wireless industry folks more time to organize their resistance, lobby Congress for more letters, and (because we are now only about 6 months away from a new FCC) run out the clock on this until the FCC turns over and/or M2Z’s investors give up and go home.

OTOH, the language of the extension makes it pretty clear that Martin still hopes to circulate something in August and get a vote in either late August or September. The Bureau order granting the extension goes to great lengths to point out that everyone has been on notice since the FCC started the current rulemaking last year that the FCC was considering adopting the M2Z proposal but with an auction rather than giving the spectrum away for free. So all this yakking about needing time to do testing on whether M2Z’s TDD systems will cause interference is not grounds for an extension, says the Bureau, because you were supposed to do that when we told you we might adopt this technology in the first place. Also, as the record shows, there’s already a boat load of testing data from the wireless carriers and M2Z, so asking for MORE testing is just an excuse to stall things by (a) doing testing, then (b) arguing about what the testing means and insisting on doing more testing — just like happened in white spaces, MMVDS/Northpoint, and a bunch of other potentially disruptive technologies that ended up dying because it took years to get rules in place.

The kicker for me that Martin is still hoping for a vote in late August or September is the last footnote. Footnote 17 observes:

We note that nothing in today’s Order precludes the filing of comments — on some or all issues — prior to the revised deadline.

In other words “You’re on notice that Martin may decide to circulate an Order on August 12, so if you want to have your comments read and considered get them in as soon as possible — because we are so not going to read some elaborate tome handed in at the last minute.”

Martin has some good reasons to want to see this resolved quickly enough to have it done on his watch. For one thing, every FCC chair starts to think about his legacy when an administration starts to turn over. Hundt was all about spectrum auction. Kennard was about introducing voice competition and creating LPFM. Powell was going to deregulate us to tech Nirvana.

Martin appears to be going for the prize as “member of the Bush Administration that actually did something on broadband besides try to convince everyone things were swell.” That explains things like the Broadband Reporting Order, the 700 MHz Auction, and the interest in the Comcast complaint. It all adds up to a parting speech that Martin balanced deregulation v. regulatory “nudges” when needed to take a pragmatic approach to spurring broadband deployment — even when it put him at odds with the deregulatory approach of the Administration (such as when imposing C Block conditions). Creating a service that promises access to a free wireless DSL line for every American would certainly give Martin rights to claim to be the Bush Administration Broadband King (Slogan “I actually did something — top that NTIA!”). And, in today’s political environment, a dash of public interest regulation and insistence that the FCC has to do more than just focus on auction revenue wears rather well (a point that appears to have escaped Republicans in Congress).

But just because Martin wants this to happen on an accelerated basis doesn’t mean it will. There are some real issues here. The interference issue non-trivial, although I believe it is resolvable and is more a question of policy than technology. Still, T-Mobile has a powerful claim that this is exactly the wrong time to create problems for one of the few remaining competitors to AT&T and Verizon by making potential trouble in the AWS-1 band and reducing the amount of spectrum for auction in AWS-2. Finally, there is the “Ghost of Frontline” problem. Do the Democrats (who — lets be honest here — are much more likely to be around after January 2009) really want to go along with something on the promise of “free broadband,” only to discover that when the bottom fell out of the market in the Great Financial Panic of October ’08 M2Z’s financial backers pulled out? Especially when it will be Martin that gets all the laurels for simply creating the service — but Copps and Adelstein who will be left holding the bag and cleaning up the mess if it doesn’t work out. And, I will add, that the current frustration on the part of the Democrats with Martin’s managing style does not incline them to want to do this on an accelerated basis.

Given that McDowell is likely to side with the wireless carriers on the basis of “dictating business models is a bad idea” philosophy, getting this through means finding a way to reassure the Democrats — who also want to see universal broadband — on these points. In an atmosphere of resentment and distrust, that’s difficult. At the same time, the Dems understand that delaying too long will also cause M2Z’s backers to walk away, which potentially screws up giving everyone access to a free wireless DSL line. Setting aside the genuine interest of Commissioners to see this happen (especially Adelstein, who has made rural broadband and rural wireless a signature issue), the Dems do not want their legacy to be “the people who kept everyone from getting free broadband because they were nervous nellies or partisan whankers.”

Tough decisions all around. Even without the political overlays, it would be a set of tough decisions. Should make for a heck of a summer.

Stay tuned . . . .

One Comment

  1. I wonder if Kevin Martin’s legacy might also include “he let the DTV fiasco happen”. I suspect we’ll know more about that in a year’s time.

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