Spectrum of Greed

According to initial hearings with Congress over the FCC’s sweeping new broadband plan, there is an immediate determination to take back at least 120Mhz of spectrum from television broadcasters and allocate it to mobile phone providers.  Apparently up to 500Mhz may be targeted within the next 10 years.  I don’t think that is going far enough.  Obviously the broadcasters are not taking this well.  Mobile data providers are pretty juiced though!

The shouting for this spectrum was apparently heard in DC all the way from Vegas, where the annual CTIA wireless convention was going on.  There AT&T, Verizon, Sprint and T-Mobile all made cases for rapid action to allow them to expand their networks and provide more bandwidth for a hungry audience that paid 28% more for broadband than last year.

Congress wasn’t letting the FCC off easy, no doubt having had a few discussions with broadcast industry lobbyists prior to the hearing.  The FCC stated that their ‘initial’ approach would be to do somewhat of a ‘profit sharing’ with any broadcasters willing to give up some spectrum to auction.  A percentage of the proceeds would go to offset any remaining license lease that the broadcaster might have.  Commissioner Michael Copps had the stick approach if the carrot doesn’t work. “Licenses all expire,” is his mantra.  He went further, also reminding people that the ‘use it or lose it’ phrase applies to wireless as it does to many other things.

Broadbandbreakfast.com’s Leonard Grace points out in an article that the broadcast industry had obviously failed to innovate their way out of the market dilemma they now find themselves in, and need to be relieved of spectrum in favor of entrepreneurs that can make better use of it.

Randal Stevenson, our post-er child for this post (and CEO of AT&T), delivered a keynote to a rabid CTIA wireless audience in Vegas flattering his buddies at the FCC, their great work with the broadband plan, and noting that the extra spectrum can’t come fast enough.

Enterprise Networking Planet noted that Cliff Stearns, ranking Republican on the Internet Committee was intent that any frequency relinquished by broadcasters should be voluntary at the house hearing on the new plan.

What I hope doesn’t get lost in all the posturing and positioning is that if Congress and the FCC continue to determine that high license fees should be billed to companies that develop wireless networks, those costs will be passed back through to consumers.  This is effectively a use tax on wireless spectrum that was a publicly owned resource to begin with.

The management model for our broadband, both land and wireless, is broken.  Tweaking it isn’t going to help.  They have to open it up and find another way to generate revenue other than a pass thru wireless tax on consumers.  In spite of the 28% revenue growth last year, you still have under 30% of all cell phone users with data plans, and ubiquitous wireless internet is still only a dream.  That won’t change any time soon unless the rules of engagement change significantly.