The FCC's Spectrum Insanity

December 4th, 2008 by · 2 Comments

It appears that the FCC may soon vote on a plan to auction off the AWS-3 spectrum with the condition that the winner must provide service to 95% of the country with 25% of the capacity available for free.  I just have one question.  Are these people insane?  Is there anywhere other than Washington DC that an idea like this would be considered viable?  Sometimes I think the politics of the word 'free' just suck the intelligence out of debate.  Nothing is free, all you can do is disguise who pays.

Why does the media keep harping on this idea as if we are days away from some imaginary panacea of free wireless internet nationwide?  All those plans for free muni-Wifi died because the business models sucked.  They're preparing to vote now in order to have an auction in a year or two for spectrum that under any conditions will take 5 or more years to build a network for - long after actual viable businesses should be offering service.   It's not that I don't want to see it happen, I'm all for as many last mile solutions as we can drum up - but this isn't going to help.

There's a company you might have heard of called Clearwire, which has already and will continue to invest billions in a non-free national WiMax network.  Many have doubts that their quest is anything other than a very expensive boondoggle, others think they are destined for greatness.  Who is right just may be the great question of the decade in the telecom sector. But imagine now if Clearwire had to provide free service in competition to its own offerings to pull this off, how would that affect their chances?  How about if they were also forced to cover 95% of the country in 10 years, regardless of market conditions, or else lose the spectrum?   And if you get past that speed bump, consider the deep freeze in the credit markets.  Assuming that the winning bidder for this spectrum actually can produce a business plan that someone might actually believe, where are the billions of dollars going to come from?  Why would anyone even think that there might be funding to back up this idea next year?

Maybe next year the FCC can spend its time working on regulations that actually mean something.  Like intercarrier compensation and universal service funding, which is now 8 years late and still being ignored.  If tackled that issue, they might actually have a positive effect on real businesses with real revenues and real services and real customers.  With better clarity from the FCC, those carriers might feel more confident in building out the sort of infrastructure that the FCC seems to want.

In order to get industry to invest in infrastructure, what works best?  Creating a clear, orderly, well enforced framework that everyone can understand and depend on when planning their investments?  Or neglecting that job entirely while selling off spectrum with strings attached to an industry that has to pay a standing army of lawyers to figure out who owes who money?  I don't think I need to have a poll to figure that one out.

Categories: Government Regulations · Old · Polls · Wireless

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