McAdams On: Tangentially, Spectrum Policy Reform

What McDowell said
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THE HIP: Some people like to complain about the way others are doing a job, but they never offer an alternative way of doing it. We all have an opinion, but few of us have solutions. Not me. No siree Bob. After a few years of carping, I generally come up with a vague notion of how something can be done differently. Because I am a consensus builder.

Unlike that guy over at the gizmo lobby who wrote, “Dinosaur Broadcasters Turn to Congress to Mandate Their Relevance.” Me-ow! He’s talking about radio in this case, but our pal at the CEA kind of hates on all broadcasters.This wasn’t always so. He was all hearts and flowers while broadcasters helped his members sell new high-end, HDTVs to every household in North America and beyond. (After the fed made them build compatible receivers. Sound familiar?) But the stink is off that rose. Handheld devices came along and turned his head, and now he pretends like we were never special to him. Just beware, handheld devices. The new you is right around the corner.

In the meantime, there you are, eating up spectrum like Pac Man on Red Bull. There’s only so much broadcast spectrum. Where do you go after you have all of that? You might give LightSquared a call. LightSquared has a big chunk of spectrum it can’t use—because it’s a bad idea to interfere with 500 million GPS receivers.

Of course, we all know those 500 million GPS receivers technically did not have the right to interference protection from LightSquared’s proposed 4G wireless broadband network. LightSquared did not intend to operate in the GPS band, but nearby. However, because the spectrum LightSquared proposed to use was designated primarily for satellite operations, those 500 million GPS receivers were not designed to reject next-door terrestrial transmissions. And because of that, LightSquared is bankrupt and someone is out $3.2 billion. I know if I had enough money to be out $3.2 billion, someone’s pants would be sued off. But whose? The Federal Communications Commission’s?

It can be argued that the commission gooned things up by granting LightSquared a fast-track waiver allowing it to develop a primarily terrestrial operation in spectrum designated for satellite transmissions. Then again, LightSquared was pursuing a new business model for a sought-after service, with limited funding. Do you fast-track a waiver, or let them sit around burning cash during a year-long comment period? It’s a toss of the dice. Had LightSquared been able to mollify the GPS community, it would be launching 4G wireless broadband even now, taking some of the pressure off broadcasters to hand over another 120 MHz to the wireless industry.

(You don’t suppose the wireless lobby helped throw a scare into the GPS community, do you? Nah, neither do I. I mean, that’s too conspiratorial, even for Washington, right? That last part was a joke.)

Getting back to how I started this episode of McAdams On, we confess that we have, upon occasion, been relentlessly acerbic regarding the FCC’s approach to managing spectrum. “So, McAdams,” one might say, hand on hips, chin thrust forward, “what would you do differently.”

Logic dictates that you start with an inventory. Several lawmakers pushed for an inventory before they finally caved and gave the FCC spectrum auction authority. Why? It is curious, isn’t it.

What did we miss? Yes, the government’s using the spectrum for all types of shady activities that it doesn’t want anyone to know about. Yawn. That still doesn’t preclude doing an inventory. If the military’s beaming thought waves into my living room at 280 GHz, I don’t need to know the details. (I already know they’d be bitterly disappointed.) The information necessary to reform spectrum policy is what is assigned to whom, for what use, and whether or not they are using it. If not, then why not, and at what stage of build-out are they?

There are, unquestionably, large swathes of unused spectrum. As we have learned over the last year, cable, satellite and telephone companies have been hedging prime spectrum, (while broadcasters have to use theirs). And the government itself appears not only to be hoarding, but not altogether willing to unhoard. This, according to FCC Commissioner Robert McDowell, a dude who reads what comes across his desk.

“The federal government occupies about 60 percent of the best spectrum,” he said at the TIA 2012 Conference in Dallas this week. “Federal users have no incentive to move off of this prime real estate but do have an incentive to keep the rest of us in the dark about how much it really would cost to move them and how long that task would really take.”

Word, bro. McDowell went to town in Dallas on spectrum policy, calling on the White House to demand that Executive Branch agencies “redouble their efforts to find spectrum to bring to auction by a date certain.” Of course, redouble of nothing is nothing, but at least there’s a voice of reason in the spectrum reform arena. McDowell also takes his own agency to task for sitting on merger reviews and public safety waivers. It’s a venerated strategy on Capitol Hill, when in doubt, to do nothing so the next administration takes the heat.

Or strong-arm something into being to take credit for it, like a wireless broadband infrastructure build-out. The problem with the current approach to this project is the absence of complete prior planning. Lawyers writing up a marketing plan rubber-stamped by economists is not a sufficient vision to execute the construction of a nationwide infrastructure.

Back to spectrum policy. A) Inventory. B) Flexible-use designations. A flexible-use designation might have saved LightSquared from doom. GPS manufacturers would have then been liable for any interference to their wimpy receivers. The necessity of an operational terrestrial waiver saved their hide. I hope they smelled the coffee.

Flexible use is what’s currently proposed in the broadcast spectrum—to add wireless broadband as a co-designation with broadcasting. The only problem with that is that the license conditions as they stand now are so different. Broadcasters are beholden to public interest obligations while wireless providers have greater freedoms and longer build-out times.

Therefore, reform of conditions should accompany co-designation. A couple of commission economists have suggested a system to buy and sell signal interference protection rights. (See ”FCC Ponders Payment System for Signal Protection.”) It’s an interesting concept. Had signal protection bidding rights been conditional on the GPS and LightSquared spectrum, both would be in a knock-down, drag-out fight, but LightSquared might still be breathing.

In a mixed-use scenario, broadcasters could also be given the option of bidding and therefore opting out of public-interest obligations, and be subject to similar conditions as wireless licensees. Smaller stations that may not be able to afford to bid can continue to abide by public-interest rules and take their chances in a repack—or maybe be moved to the lower channels.

The bottom line on spectrum reform is that it should be undertaken with careful consideration, and not merely to promote a legend-building scheme of any particular administration. We don’t need another Iraqi-rebuild right here at home.

“The FCC should implement the new spectrum law with humility, simplicity and regulatory restraint.” McDowell, again. The transcript of his speech is here. It’s annotated. Bask in the rarity.

Until next time. ~ D.