- How US v. Google Antitrust Case Changes Internet Platform Antitrust Outlook - September 18, 2020
- How Section 230 Is Anticompetitive - July 21, 2020
To try to justify mandating Title II utility regulation of broadband and the blocking of the Comcast-Time Warner acquisition, the Administration and FCC had to gerrymander broadband definitions to reach their political goal that wireless broadband service not be considered an official competitor to wireline broadband service.
Never mind the obvious: that the nearly three quarters of Americans who use a smartphone know that one can functionally do most everything one wants on a mobile smartphone/tablet/laptop that one can do on a wireline connection. Also never mind: tens of millions of Americans who use only wireless broadband for all their Internet needs.
To try to justify preempting State limitations of gigabit muni-broadband build-outs and its cheerleading for Government Owned Networks (GON) to politically and economically devalue commercial broadband competition, the government had to ensure that the wireless industry could not create four more very-high-speed competitors to wireline cable and telco broadband providers.
It did so by unilaterally changing Federal spectrum policy to starve and limit the amount of licensed and unlicensed spectrum available to wireless users long-term, because for smartphone users — spectrum is speed. Limit spectrum, limit speed, to maintain the charade that wireless broadband does not compete with wireline broadband.
Rather than fulfilling President Obama’s pledge to make available another 500 megahertz of spectrum available by 2020 to meet the projected spectrum demand for licensed and unlicensed spectrum, the Administration unilaterally changed U.S. spectrum policy. It effectively has shut down the commercial spectrum pipeline after the spectrum in the upcoming incentive auction is sold. In addition, it is now effectively requiring all future spectrum availability beyond the incentive auction to be permission-dependent-spectrum-sharing with the Federal Government.
CTIA’s spectrum pipeline research concludes that the Nation’s empty spectrum pipeline will leave the U.S. wireless industry ~350 MHz short of the broadband-suitable spectrum they need to just keep up with projected demand.
CTIA’s spectrum pipeline report also says: “Today, the federal government has sole or primary use of between 60-70% of spectrum suitable for wireless broadband.”
This federal spectrum hoarding policy perversely leads to unnecessary spectrum scarcity rather than possible spectrum abundance.
It also has huge negative implications for both the evolution of 4G to 5G wireless and for the future of “permissionless innovation.”
Government Throttling 4G evolution to 5G?
The big difference between 4G and 5G is speed; 5G wireless is expected to offer broadband speeds 30-50 times faster than 4G precisely because it enables the aggregation and bonding of many different bands of spectrum — licensed and unlicensed spectrum – simultaneously via more advanced, next generation, 5G software algorithms.
Since wireless broadband speed is largely physically determined by the aggregate spectrum MHz available to a user, the Federal government’s de facto hoarding of 60-70% of the Nation’s spectrum for federal bureaucracies’ sole or primary use, combined with its refusal to make more licensed or unlicensed spectrum available after the incentive auction, means federal spectrum policy is de facto set to ensure 5G wireless practically cannot reach its gigabit speed potential. It also ensures that 5G wireless broadband cannot reach its full potential for OTT video streaming competition.
Simply, the Administration’s de facto forced spectrum scarcity policy is anti-5G and anti-very-high-speed wireless broadband competition to wireline broadband, because 5G’s much faster speed potential can only be met if the federal government makes available dramatically more licensed and unlicensed spectrum suitable for broadband, and allows licensed and unlicensed spectrum to be aggregated and bonded when not in use – without government permission required.
The Future: Permission-Dependent-Spectrum-Sharing with the Federal Government?
The federal government’s decision to effectively shut-down the spectrum pipeline for more licensed and unlicensed spectrum use threatens the longstanding and hugely successful Federal policy of “permissionless innovation” which is not requiring the government to pre-approve innovations before they can be market-tested or go to market.
That’s because “sharing” spectrum with a federal government bureaucracy that currently has spectrum rights to be the sole or primary user of the spectrum isn’t really “sharing” – it is waiting for the “big dog’s” scraps and hoping the “big dog” doesn’t grow more hungry or territorial about their spectrum bone over time.
Simply, the government-shared spectrum concept implicitly is government-permission-dependent spectrum and a classic “mother-may-I” regulatory model where innovators must seek preapproval to experiment and market test their innovations and wait for the FCC to get around to the matter in their own sweet time. This is not gigabit 5G innovation speeds its innovation at the speed of government.
The Government’s new permission-dependent spectrum policy is in stark contrast to the longstanding, successful, and operative “permissionless-innovation” policy for both unlicensed spectrum and licensed spectrum.
This all has a lot of relevance to the current concerns over how LTE-U and WiFi share unlicensed spectrum.
Google (via its New America Foundation front-proxy), Public Knowledge, FreePress, and Common Cause have proposed in comments to the FCC that licensed spectrum holders should not be trusted to use unlicensed spectrum because they have “both the ability and strong incentives to use LTE-U and LAA to engage in anti-competitive behavior harmful to consumers.”
This is the exact same logic and argument that these interests made that broadband competitors should be considered guilty by the FCC of net neutrality violations until they are proven innocent by the FCC; and that they should be subject to preemptive Title II utility regulation to preserve and a free and open Internet for consumer.
In sum, hopefully the FCC remembers the amazing plethora of phenomenal innovations that have occurred over the last two decades because of an FCC policy of “permissionless innovation” that did not seek to micromanage wireless technology transitions from 1G to 2G to 3G to 4G wireless.
And hopefully the FCC does not adopt FreePress and Public Knowledge’s preemptive-regulation theory that market-based, wireless broadband competition should be presumed to have “both the ability and strong incentives to use LTE-U and LAA to engage in anti-competitive behavior harmful to consumers…” because that could throttle the “permissionless innovation” evolution of 4G to gigabit-speed 5G wireless over the next few years.
Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, a research consultancy for Fortune 500 companies, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests.