Mobile broadband legislation black hole
One of the more lively debates that has been dominating Washington centers around something none of us can even see: spectrum — the invisible infrastructure that powers everything from radios and broadcast television, to Wi-Fi, cellular phones, and even garage door openers.
Spectrum is today’s hot topic due to the unprecedented growth of mobile broadband, which is taxing the networks of America’s wireless providers. Simply put, if spectrum is the oxygen of the wireless world, providers are quickly running out of air, and unless more spectrum can soon be purchased by the carriers who need it the most, our country risks missing out on the full economic and social benefits mobile broadband promises to bring.
The pressing need to free up more spectrum is not lost on the Federal Communications Commission or Congress. FCC Chairman Julius Genachowski has warned of a “looming spectrum crisis,” and in February, with a wise compromise on the payroll-tax extension bill, lawmakers set an important process in motion. Congress not only freed up more spectrum, but recognized the importance of ensuring a humble approach to the way the next round of spectrum auctions — which could mean billions to America’s economy — is crafted.
With the spectrum auction legislation, Congress guarded against the FCC either limiting the carriers who can participate or prohibiting eligible bidders from acquiring certain blocks of spectrum. Imposing conditions to manipulate the playing field and pick winners and losers is an approach that could severely damage the commission’s traditional role as an impartial administrator of the auction process. Past attempts by the FCC to place conditions on the auction of spectrum bands did not end well, as in the case of the D Block (or “public safety”) band, which became an outright failure of the auction process. Because of the severe conditions imposed, the D Block ultimately did not sell. With the clock ticking on the health of America’s wireless networks, we simply can’t afford to revisit the same dead-end paths.
Disqualifying bidders due to their size or their position in the market would also deprive the government of auction revenue, distort the market in a way that detracts from efficient spectrum use and deny spectrum to companies that have pressing needs for it in order to accommodate their anticipated growth. Conversely, a spectrum auction that welcomes all financially qualified bidders, without restriction on spectrum availability, will promote innovation, economic growth and job creation, and will ultimately enhance broadband deployment.
The payroll-tax extension bill restricts the ability of the FCC to put its thumb on the scale, requires open auctions, and – in a smart move by Congress – requires a rulemaking with its full opportunity for public participation if the commission wants to make any changes. So what now? Another crucial, related spectrum issue looms.
There have been whispers that the FCC might again attempt an administrative adjustment of the spectrum screens, which are limits on the amount of spectrum wireless carriers may hold in individual markets. House Committee Chairman Rep. Fred Upton (R-Mich.), and Communications and Technology Subcommittee Chairman Rep.Greg Walden (R-Ore.), have questioned the FCC’s process around the issue, and concerns remain that the agency may in some cities use new spectrum screens to exclude from the auctions the larger carriers, achieving through the back door what Congress prohibited the FCC from doing directly. No one contests the commission’s authority to create and change spectrum screens, but any modification should only come after a formal rulemaking that affords transparency and provides an opportunity for public comment and an appeals process after a rule is adopted.
If we are going to keep the wireless industry growing and encourage the build-out of a more powerful Fourth Generation wireless infrastructure across America, spectrum auctions must be properly designed. Rigging the system so that key stakeholders are barred or discouraged from participating, or spectrum availability is selectively curtailed, could cost our country billions in much-needed revenue and deal a severe blow to innovation from one of our most vibrant industries. A recent study from Deloitte Consulting estimates that deploying 4G networks across America could create as many as 771,000 jobs. That’s a lot of jobs, but it can only happen if wireless providers have the spectrum they need to power the networks they build.
With mobile data use surging, allowing network operators to bid on the spectrum they need to relieve ever growing network strains is also a win for consumers who will experience fewer dropped calls and benefit from next-generation mobile services.
For the FCC to toy with spectrum screens to manipulate incentive auctions would be the same song, second verse. Only through a truly open and competitive process will America enjoy the full economic and social benefits of mobile broadband. The power of the free market has made the wireless industry a beacon of competition, innovation, investment and job creation in a struggling national economy. A spectrum auction open to all is the best prescription for keeping it that way.
Boucher was a 14-term member of the U.S. House of Representatives. He chaired the Subcommittee on Communications and the Internet and cofounded the Congressional Internet Caucus. He’s currently the honorary chairman of the Internet Innovation Alliance and the head of the government strategies practice at Washington, DC law firm Sidley Austin.