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The FCC needs to relieve itself of self-importance mindset

Last Tuesday, Federal Communications Commission acting chairman Mignon Clyburn delivered remarks at the Competitive Carriers Association annual convention in Las Vegas, Nevada. Ms. Clyburn laid out some social policy goals for mobile communications for the commission post the 700 MHz interoperability solution committed to by AT&T over a week ago. Among the goals are:

1. Promoting competition
2. Empowering consumers
3. Unleashing spectrum
4. Spurring investment

Ms. Clyburn took the mantle from her predecessor, Julius Genachowski, crediting the FCC with market powers the FCC simply does not have and shouldn’t admit to having even if it did. I made reference to this in a tweet a couple nights ago: the Genachowski Syndrome. Let’s take, for example, the FCC’s promotion of competition in mobile services.

The type of competition the FCC refers to is the layman’s version of competition where each firm in the market is concerned about what the other one is doing. Sure in the real world T-Mobile is aware that Verizon and AT&T are the big dogs in the wireless market, but T-Mobile’s primary concern, as it is with any firm in a competitive market, is with the desires and demands of the consumer. If this were not the case then T-Mobile would not have successfully carved out a niche in the pre-paid wireless market. It would have paralyzed itself wondering what Verizon or AT&T’s next moves were, finding itself counting Euros instead of dollars. The FCC had nothing to do with T-Mobile carving out this niche. This had more to do with T-Mobile reading the demographics of the nation and where the economy was going.

In a competitive market, the market the FCC allegedly wants to promote, there would be free mobility of the resources wireless carriers need in order to produce their services. For mobile carriers that includes spectrum, access to towers, and public rights-of-way. Guess who provides bottlenecks that restrict access to these resources. To steal a phrase, it’s not that complicated. Local governments seek to extract tribute from carriers via franchise fees, rights-of-way permits, and zoning delays for towers. Meanwhile, the FCC and the U.S. Department of Justice scare investors with proposals to cap access to spectrum auctions.

And can we really say that the FCC’s 2011 rules mandating data roaming helped promote a competitive market? Roamers aren’t looking for new services or new service providers when trying to make a call outside of their carrier’s network. The expect their carrier to connect their calls no matter where they are. The FCC’s roaming rules only made it okay for a consumer to stay with a regional carrier when instead the consumer should have been exposed to the consequences of being with a lower tier carrier.

The lower tier carrier shouldn’t take all the blame. Some of the blame falls on larger carriers for not marketing a brand of service customers of smaller tier services would want to switch to. In addition, if competition drives innovation and infrastructure development as Ms. Clyburn alludes to, then why promote roaming, a policy that disincentivizes carriers from building national networks?

Bottom line, mandating roaming is not a public policy that promotes competition and the FCC should stop confusing being around during innovation with actually influencing competition.

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Mignon Clyburn issues statement on 700 MHz inter-operability solution

Posted September 10th, 2013 in Broadband, interoperability, mobile telephone and tagged , , by Alton Drew

“America’s mobile consumers have a reason to celebrate today: After many frustrating years, wireless
carriers have finally reached a voluntary industry solution that will resolve the lack of interoperability in
the lower 700 MHz band in the most efficient manner.

This is a big win for consumers, especially in rural areas, who will see more competition and more choices. Also, by making it easier for small wireless carriers to compete, today’s interoperability solution will spur private investment, job creation, and the development of innovative new services and devices.

That’s why for the past few years, I have been consistent in pushing for a final resolution to this issue.

Thank you to all the parties – AT&T, The Interoperability Alliance, The Competitive Carriers
Association, DISH, and the consumer advocacy groups – who came to the table and worked
collaboratively with FCC staff to hammer out a solution that benefits all consumers.

Many thanks to my staff, especially Michele Ellison, Ruth Milkman and Louis Peraertz, for going above
and beyond the call of duty to achieve this groundbreaking result.”

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Fortunately the FCC did not apply The Big Bang Theory to Time Warner and CBS

Well, if you’re a “Person of Interest” who enjoys watching “The NFL Today” with “Two Broke Girls” in Los Angeles, New York City, or Phoenix, then Tuesday morning’s settlement over re-transmission fees that Time Warner Cable will pay to CBS brought a smile to your face.

According to The New York Times, “Time Warner Cable pressed throughout the month-long impasse after it removed CBS’s stations from its systems for some form of government intervention, from either the Federal Communications Commission or Congress, but none materialized.

While the acting F.C.C. chairwoman, Mignon L. Clyburn, said on Aug. 9 that she was distressed at the standoff and was ‘ready to consider appropriate action if this dispute continues,’ it continued for another three weeks without her intervening. Several media analysts said early in the dispute that the commission’s options were limited because the right of a station owner to seek re-transmission compensation was granted in a law passed by Congress in 1992.

Monday evening, Ms. Clyburn issued a statement saying: ‘I am pleased CBS and Time Warner Cable have resolved their retransmission consent negotiations, which for too long have deprived millions of consumers of access to CBS programming. At the end of the day, media companies should accept shared responsibility for putting their audience’s interests above other interests and do all they can to avoid these kinds of disputes in the future.’ ”

I was caught off guard by Chairman Clyburn’s statement about a consideration of appropriate action should the negotiations continued to wallow. In my opinion the FCC’s rules did not give Ms. Clyburn much room to maneuver in. Section 76.64 of the FCC’s rules requires the consent of a local commercial broadcaster be given to the cable operator before the station is carried on a cable operator’s system. That requirement puts any appropriate action on the part of the FCC in a very narrow box, maybe limiting them to exercise their expertise in mediation and that’s about it.

The FCC’s must carry rules (See Section 76.56) would not have been available to the FCC for use since CBS yanked permission for Time Warner to carry the broadcaster’s signal in the first place. There was never much their for Ms. Clyburn to drag the parties down to The Portals to negotiate anyway.

Oh well, at least Time Warner subscribers will get some NFL and college football and the U.S. Open tennis this weekend.

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Sounds like Mignon Clyburn will stay the course on spectrum

Posted June 4th, 2013 in FCC, Government Regulation, spectrum and tagged , , by Alton Drew

Here is an excerpt from a speech delivered to CTIA by acting Federal Communications Commission chairman Mignon Clyburn. It appears the FCC is on course to have incentive auctions conducted in 2014 and will continue addressing deploying more WiFi aboard aircraft. In short, no additional uncertainty during the interim.

“Mobile innovation is key to U.S. competitiveness. We currently lead the world in LTE deployment, with about as many LTE subscribers as the rest of the world combined. But maintaining this lead will only happen if we address one of the biggest challenges to our mobile future — the demand for spectrum.

The National Broadband Plan helped put the issue of spectrum squarely on the map, and the agency is doing a lot of creative things to make more spectrum available. Over the past four years, we have initiated and implemented significant spectrum policy innovations under Chairman Genachowski’s leadership and are moving full speed ahead during this transition period.

The Incentive Auctions team is continuing to work on, and evaluate, all of the input and proposals received during our workshops and webinars, and the Commission remains on track to issue auction rules this year and conduct an auction in 2014.

While the voluntary incentive auction proceeding receives much of the attention these days, it is hardly the only wireless engagement in our portfolio. Consistent with Congress’s directives in the Spectrum Act, we are moving forward with plans to auction 10 megahertz of spectrum in the H Block, and 55 megahertz in other bands, as required by the Act.

We not only plan to clear and reallocate spectrum. The FCC is continuing to promote new strategies to use spectrum more efficiently. We are promoting innovative ways to share spectrum, such as facilitating small cell technology in the 3.5 GHz band.

Our federal partners at the Commerce Department currently plan to meet in June to complete their recommendations on sharing in the 1755 – 1850 MHz band and we will continue to work with them to ensure the most efficient use of spectrum all the way around.

The FCC’s wireless agenda remains focused not only on licensed, but unlicensed spectrum. Building on our TV White Spaces order, we launched a proceeding in December to spur greater use of unlicensed spectrum in the 5 GHz band and I will continue to encourage staff to find innovative ways, to promote unlicensed spectrum use.

Earlier this month, we initiated a proceeding to establish air-ground mobile broadband service as a secondary allocation in the 14 GHz KU band. This could dramatically enhance the quality of in-flight WiFi on planes.

I will encourage staff to work with primary licensees in the KU band and companies who are interested in providing this higher speed Internet service so that the flying public has an opportunity to access high quality broadband service on commercial aircraft.”

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The FCC and spectrum management after the election

Posted November 5th, 2012 in Election 2012, FCC, Government Regulation, spectrum and tagged , , by Alton Drew

The following is an excerpt from an article written by me and published in Politic365.com. With the presidential elections only nine hours away, I shared a little forecast on where the Federal Communications Commission may go on the issue of spectrum management.

Nine hours before the election and possibly a new chairman of the Federal Communications Commission, the issue of how best the FCC provides access to the airwaves by wireless communications companies may be approached differently depending on which party takes control of the FCC. Two commission members, Mignon Clyburn and Ajit Pai, are placing themselves in the thick of spectrum issues and their articulations on the issue of spectrum management reflect their divergent positions on the issue.

Specifically, although Ms. Clyburn would like to see the FCC ensure that spectrum is put to its highest and best use, she would like to see regulation act as the mechanism of distribution. “Regulations must adopt spectrum policies that encourage this process”, according to Ms. Clyburn. Clearing and reallocating spectrum may not be enough under the Clyburn school of thought. The FCC may have to implement policies addressing the structure of the economy, including the promotion of competition; encouraging investment; and deploying infrastructure.

Mr. Pai takes the overall view that today’s telecommunications industry should not be subject to the 20th century framework reflected in the current Communications Act. He wants to remove the uncertainty that eliminates the incentive of businesses to take on risk.

Unlike Ms. Clyburn, Mr. Pai places a greater emphasis on spectrum clearing versus spectrum sharing. Spectrum clearing sees a spectrum license holder, i.e. a television station, giving up all of its use of a frequency band so that another provider, i.e. a wireless telecommunications company, can exclusively use the band. Spectrum sharing occurs whenever multiple wireless systems operate in the same frequency band. Mr. Pai believes that spectrum clearing encourages more competition during the auctioning for licenses and that wireless carriers will have an incentive to invest more in infrastructure.

From a market perspective, Ms. Clyburn’s approach is intrusive relative to Mr. Pai’s approach. There is a difference between ensuring that spectrum is being put to its best use versus getting spectrum into the hands of carriers who value it the most.

Ensuring that spectrum is being put to its best use means that government will continue to influence the business judgment of a carrier beyond granting the carrier access to the airwaves. This approach would keep the cloud of regulatory uncertainty hanging over the heads of carriers who would remain in a near perpetual state determining whether their decisions on investment and infrastructure deployment pass the FCC’s test for best use.

On the other hand, getting spectrum into the hands of carriers that value the resource the most is not only less intrusive but measurable. The FCC can identify the carriers that value spectrum the most primarily by observing the bids carriers make and noting the premium that carriers are including in those bids. The lighter touch regulatory approach advocated by Mr. Pai should mitigate concerns about regulatory uncertainty held by wireless carriers.

Given the current makeup of the FCC, with three Democratic commissioners and two Republicans, the intrusive approach as espoused by Ms, Clyburn is prevailing. Which school of thought prevails between 2013 and 2017 all depends on what happens at the ballot box on November 6.