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Hopefully the FCC allows this license transfer

Posted August 31st, 2012 in FCC, Government Regulation, spectrum and tagged , , , by Alton Drew

AT&T Mobility and New Cingular petitioned the Federal Communications Commission today for permission to transfer control of a number of WCS and AWS-1 licenses to AT&T. The reason for the transfer is to allow AT&T to pick up spectrum licenses that are not being used.

I would conclude that this transfer should be a no brainer but the FCC has not appreciated of late the impact underutilized spectrum is having on consumers. I don’t think that the FCC purposefully likes the idea of dead space where spectrum should be lit, up, and running. I do think that the FCC spends too much time contemplating competitive impacts where it should be focusing on whether its gatekeeper position is negatively impacting consumers, particularly when it denies spectrum transfers.

If the FCC is concerned about data pricing that may drive up consumer prices, it should move quickly to approve this transaction.

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FCC: The GOP platform gets it

The Republican Party included in its platform its vision for the relationship between the communications industry and government. It’s a good start. First, check out the platform:

“The most vibrant sector of the American economy, indeed, one-sixth of it, is regulated by the federal government on precedents from the nineteenth century. Today’s technology and telecommunications industries are overseen by the Federal Communications Commission, established in 1934 and given the jurisdiction over telecommunications formerly assigned to the Interstate Commerce Commission, which had been created in 1887 to regulate the railroads.

This is not a good fit. Indeed, the development of telecommunications advances so rapidly that even the Telecom Act of 1996 is woefully out of date. An industry that invested $66 billion in 2011 alone needs, and deserves, a more modern relationship with the federal government for the benefit of consumers here and worldwide.

The current Administration has been frozen in the past. It has conducted no auction of spectrum, has offered no incentives for investment, and, through the FCC’s net neutrality rule, is trying to micromanage telecom as if it were a railroad network. It inherited from the previous Republican Administration 95 percent coverage of the nation with broadband. It will leave office with no progress toward the goal of universal coverage – after spending $7.2 billion more.

That hurts rural America, where farmers, ranchers, and small business manufacturers need connectivity to expand their customer base and operate in real time with the world’s producers. We encourage public-private partnerships to provide predictable support for connecting rural areas so that every American can fully participate in the global economy.

We call for an inventory of federal agency spectrum to determine the surplus that could be auctioned for the taxpayers’ benefit. With special recognition of the role university technology centers are playing in attracting private investment to the field, we will replace the administration’s Luddite approach to technological progress with a regulatory partnership that will keep this country the world leader in technology and telecommunications.”

Should the GOP take the Congress, I would recommend legislating away the FCC’s net neutrality rules. Those rules strike at the very core of a carriers freedom to manage its networks in the most efficient manner, in the way that carrier sees fit according to its business judgment.

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Mobile Future Looks Stark without Some FCC Action

Posted August 28th, 2012 in Broadband, FCC, Government Regulation, mobile telephone, spectrum, wireless communications and tagged by Alton Drew

MobileFuture published an interesting graphic which you can link to right here. It highlights that of all available spectrum, 16% of it is available for commercial use. The rest is used by television broadcasters and the federal government.

You may say, okay. Sixteen percent of all those airwaves is not that bad. That would be saying that 16% of onramps to U.S. highways available for commercial trucking is a good deal when in reality we have bigger and faster trucks lugging goods and services and more of them are demanding use of those onramps.

That is what’s happening with broadband access, particularly with mobile access. Although the wireless industry has invested $113 billion in wireless infrastructure, 330 million wireless accounts pushing up on 16% availability of spectrum spells crunch time for opening access to the airwaves. No allocation of spectrum over the last four years has only set the industry and wireless consumers back further.

The federal government is the only market for spectrum. It has established itself as gatekeeper of the resource. It has to increase its reaction time to the crisis if consumers are to continue receiving data speeds they have grown accustomed to.

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Precedence and Clarity Require FCC Subject Its Rulings to Public Hearing

I have some preliminary thoughts on additional transparency at the Federal Communications Commission. During my heyday at the Florida Public Service Commission, no major rule or other policy change was implemented without an evidentiary hearing. This type of openness provided both investors and consumers the ability to weigh in on an issue and helped ensure that the PSC met its duty to balance the interests of consumers and investors alike.

Not only did the PSC balance these interests by being open and transparent in their deliberations, but they also established a clearer record of precedent. This is the approach that the FCC needs to apply on a going forward basis in its decisions. Recent findings in the Commission’s special access ruling and the decision on the spectrum transaction between Verizon and SpectrumCo LLC provide examples on how a lack of an evidentiary hearing can send mixed signals about promotion of competition and free markets.

For example, the FCC concluded that it should suspend its special access rules that granted pricing flexibility to carriers facing competition. The FCC believes now that there is evidence the rules are not reflecting competition for special access.

However, in its review of the Verizon-SpectrumCo LLC license acquisition, the FCC concluded that the cable companies do not have the ability, at least in the near term, to cause anti-competitive harm in broadband services. In addition, a significant increase in backhaul rates is unlikely to impact subscribers.

So in special access, an important component of backhaul, the FCC doesn’t know whether there is competition, but in a spectrum docket, the FCC concludes in effect that there will be no anti competitive or anti consumer impact resulting from an increase in backhaul rates.

There has to be some reconciliation of the special access market with pricing impacts in the backhaul market and only a precedent setting evidentiary hearing can do this.

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Section 706 Puts FCC in Unnecessary Bind

Section 706 of the Telecommunications Act puts the Federal Communications Commission in a peculiar bind. The statute requires that the FCC determine whether Americans have access to high-speed, switched, broadband telecommunications capability that enables users to originate and receive high quality voice, data, graphics, and video telecommunications technology.

The FCC concluded that broadband was not being deployed in a timely manner. Factors such as broadband costs, quality of service, and adoption by consumers were hindering deployment.

Can you blame the industry? I say no, not after investing, according to the FCC, approximately $41 billion a year in network deployment. You can’t really fault the federal government, particularly after Congress allotted and the NTIA and RUS spent $7 billion to incentivize the design, construction, and deployment of broadband facilities in unserved and underserved communities.

But with 19 million Americans not having access to broadband, and 14.5 million of them living in rural areas, what more should the FCC do? As a promoter of commerce, the FCC has done a good job encouraging infrastructure deployment, but should it be responsible for encouraging broadband adoption?

Broadband adoption is a market reaction. By that I mean it’s up to consumers to determine the value of buying broadband access and it’s up to producers to create the demand. I got uncomfortable seeing FCC Chairman Julius Genachowski standing in front of a Best Buy talking about the fun apps and gadgets that could run on broadband networks. Fine and dandy, but once the FCC has met its duty to promote commerce by encouraging the deployment of networks, it’s time for the market players, consumers and producers, to do the rest.

Rural residents made a decision to live in rural areas. They should pick up the cost of building their own networks; pick up the cost of accessing current broadband networks, or investigate the alternative technologies that can provide them with access to broadband. Subsidies in the end mean some consumers are paying more than they have to in order for others to get service. Producers will have to rely on controversial cost models to approximate cost information that the market could more easily provide.

To limit the FCC’s interference in the broadband market, Congress could start by eliminating Section 706. By repealing this mandate, the FCC could better focus on ensuring the deployment of a ubiquitous network while the market could focus on sending and receiving more accurate supply and demand information.