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FCC regulatory overreach does nothing for consumer welfare

Good to see more advocates for a less restrictive market stepping up and getting more aggressive with vocalizing their concerns. That’s what the Center for Individual Freedom did in a blog post last week addressing the apparent overreach that the Federal Communications Commission has been executing for almost three years.

Sometimes I think regulators, the FCC included, forget which country we are living in. Seems to be a love affair with all things extra-national no matter what side of the aisle the trouble maker sits on. Newt Gingrich would like us to use some Chilean form of retirement accounts to satisfy the social security issue. Julius Genachowski constantly reminds us that South Korea has greater broadband deployment and speeds than we do. Let’s not forget that the Republican Party believes that President Obama wants to make a European socialist system.

The last charge is pure nonsense, of course, but Mr. Genachowski and his FCC sure tempt many to fall for that lie when his FCC focuses on everything else but how best to get spectrum into the hands of carriers that are in the best position to put that national resource to its optimal use.

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Google and Sprint sounds like a logical play

Posted January 31st, 2012 in Broadband, Google, Sprint, T-Mobile USA, wireless communications and tagged , , , , by Alton Drew

A couple posts ago I shared the idea of Apple buying T-Mobile. What would really be an act of charity would be Google buying Sprint. Talk about putting a company out of its misery. Shares of Sprint have been falling for six months and this company needs a parachute. It waged a successful legal/regulatory campaign against the AT&T,T-Mobile merger, but looks like it may be in need of some help itself.

Here is a quote from an analysis by Morningstar:

“We believe this strategy is correct, but execution has failed thus far in one critical area: financing. That Sprint needs to raise capital isn’t a surprise, given the steady debt maturities it faces during the next few years. Sprint’s initial reluctance to clearly lay out its funding needs and continued uncertainty around Clearwire CLWR have caused the market to lose faith in management. Backed into a corner, the firm was forced to accept costly terms on its recent $4 billion debt offering. Sprint should now have the financial resources to work through Network Vision, but the firm still has little room for error.”

Google definitely has resources and could be Sprint’s white knight. In addition, keeping Sprint viable is good for public policy reasons because it keeps another choice for mobile broadband access in the game.

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Spectrum allocation policy should be a lot more straight forward.

Posted January 30th, 2012 in broadcasters, spectrum, spectrum auction and tagged , , by Alton Drew

Blair Levin stated during the Minority Media and Telecommunications Council’s Broadband and Social Justice in support of incentive auctions as described in S.28, the Public Safety Spectrum and Wireless Innovation Act. The Act allows broadcast stations that voluntarily give up some of their spectrum to collect part of the bid proceeds, while the remainders of the proceeds are placed into funds that would be used to build out broadband facilities in rural areas as well as fund an interoperable public safety network.

Mr. Levin indicates that he has no problem with the Federal Communications Commission exercising flexibility in allowing its staff to “develop options and then allow the political leadership, both at the FCC and the Congress to apply their policy preferences.”

The bill specifically allows the FCC to “determine, at its discretion, what new use that the Commission determines, in its discretion, are attributable to the licensee’s relinquished spectrum usage.”

My take on the language is that it’s too vague. The Senate Committee on Commerce, Science, and Transportation could tighten this bill up by amending the language to reflect the specific uses of the freed up spectrum i.e., mobile wireless telecommunications, and that the FCC will not prevent any wireless company with the technical and financial resources from participating in an incentive auction.

Why is this important? Because it ensures that all competitors are able to obtain this resource so that they can compete in the wireless market and provide consumers additional choice. You can’t call an auction a competitive mechanism for distributing spectrum if you are not ensuring each company has a chance to bid for spectrum.

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Mobile Future urges FCC to keep spectrum on top of 2012 agenda

Posted January 27th, 2012 in Broadband, spectrum, wireless communications and tagged , , by Alton Drew

In a letter dated 25 January 2012, Mobile Future urged the Federal Communications Commission to keep spectrum availability at the top of its priority list in 2012. Mobile Future attached a report documenting the impact on growth resulting from the evolution and innovation in wireless.

According to Mobile Future, more than 1.5 million jobs were created when the wireless industry transitioned from 2G to 3g service between 2007 and 2011. In addition, according to Mobile Future, every 10% adoption of 3G and 4G technology increases the chance of an additional 231,000 jobs being added over the next year.

Glad I bought my 3G last year. Love contributing to the cause.

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Is Sprint squatting on spectrum?

Spectrum is a nonrivalrous, excludable good. Like any other wireless carrier, Sprint’s cell towers, cell phones, heck even their customers generate that electromagnetic field we call spectrum. Just like Sprint bids for access to spectrum from the Federal Communications Commission, we “bid”, usually on a monthly basis, for access to Sprint’s cell towers.

Our little hand held radios that we call cell phones and smart phones emit signals that eventually clog the highways and channels we refer to as frequencies. The greater the demand to access spectrum, the greater the cost to use it.

Sprint, like every other carrier, faces not just a spectrum crunch, but a cash crunch. Telling investors that roaming agreements are its best bet to conserving cash should put investors on edge. Also buying 30 million smart phones when your network isn’t ready for all that capacity doesn’t set well with me either.

I also have to wonder how Clearwire’s spectrum squatting is impacting Sprint’s decision to rely more on roaming agreements to service its customers versus building out its network? According to Sprint’s 10-K, Sprint has a wholesale agreement with Clearwire where Sprint resells Clearwire’s 4G service. Maybe Clearwire hasn’t built out to the areas where Sprint is relying on roaming agreements or Clearwire wants more money. I don’t know.

I do know that investing in your network and building it out puts your subscribers at ease. They do care that the carrier who says they are providing national service is the carrier that is actually carrying their national service.