Last week Larry Downes posted an article on how the Federal Communications Commission seems to have lost its way on broadband policy. With a spectrum frontier that, according to Mr. Downes, is effectively closed, the FCC appears to have been thrown off course by short term goals preferred by smaller wireless carriers, notably Sprint and T-Mobile, a number of grassroots advocates, and the U.S. Department of Justice.
They have combined to craft and sell a narrative that more spectrum going to larger carriers, specifically AT&T and Verizon, is not good for competition and that future spectrum reverse auction rules should be written to steer spectrum toward smaller carriers in the name of, I don’t know, fairness or equity.
Somewhere lost in this pushing and shoving at the dinner table are two social policy goals. The first goal is making available to all Americans universal access to a nationwide communications network. The second goal is getting broadband access to all American households pursuant to the FCC’s March 2010 national broadband plan. In a free market where consumers are able to choose a provider for broadband services, the FCC is using its bottleneck status as gatekeeper to the airwaves to craft consumer choice according to its own image.
That image is a market where carriers serving 80% of current subscribers should be punished because they got a head start on broadband due to their very organic business model: they were incumbent local exchange carriers with a network in place and a large local phone customer base to sell to. The carriers would have to engage in time travel back to the 1970s in order to get on the same so called equal footing that the FCC would like to see now in the 21st century. That is not going to happen.
What should happen is that Sprint and T-Mobile put to use their current spectrum holdings and enter into strategic partnerships with handset and operating systems providers to sell innovative product and services. As Mr. Downes points out, Sprint, due in part to a merger with Clearwire and it being acquired by SoftBank, is America’s largest holder of spectrum. T-Mobile’s acquisition of MetroPCS garnered for itself additional spectrum.
Rather than indirectly hampering the quality of service AT&T and Verizon’s subscribers would incur because their respective carriers would be shut out of spectrum, Sprint and T-Mobile should give AT&T and Verizon subscribers a good old fashioned market based reason for switching to them versus lobbying for auction rules that violate the very premise of free markets and competition they allegedly believe in.