by Matt Stoller, Thu Apr 19, 2007 at 06:34:04 AM EDT
Andy Kessler has a really good post in the New York Times on a potentially revolutionary FCC auction later this year. Kessler runs down the way the public airwaves are managed (badly and for the benefit of monopolists), and discussed something called the 700 auction, which is a huge chunk of awesome spectrum coming free in two years. There are lots of bidders, but one group is being left out. Us.
Wifi is a great example of what happens when individuals can innovate around a monopoly.
But the telecomopolists can't have some clown sitting in a Starbucks writing an opinion piece bypass their for-pay infrastructure, so they always insist on ownership of spectrum in separate licensed bands. For their use only. Ownership. Until the 1990s, most of the licenses were given away. But the F.C.C. and their European counterparts, thinking there might be a free market model of bandwidth management of the future, started auctioning off spectrum. Third generation, or 3G, licenses raised $150 billion or more for governments, that's real money, and the auctions were considered a success.
But 3G ain't free -- the winners, AT&T, Verizon, Orange in the U.K., and the like just passed along the costs as higher prices to customers. It was just a game of having the deepest pockets to outbid mere mortals. Customers would eventually pay. It was hidden tax on us peons - damaging economic growth instead of promoting it. And not coincidentally, 3G uses spread spectrum technology so callers can share the airwaves without interfering. So why exactly does someone have to "own" this spectrum?
That's why auctioning off this 700-MHz block is so last century. The lower the frequency, the further signals can travel without degrading, better to penetrate homes and offices. This is a desirable chunk of spectrum. But why not just make it an unlicensed band? Entrepreneurs will come up with more interesting services than cellphone operators who think text messaging is somehow worth 10 cents a pop.
F.C.C. Chairman Kevin Martin has asked for free market proposals for use of the spectrum. Recognizing that police and fire departments with 500,000 radios operable in this band are going to have an important say, one proposal from Hundt and his company, Frontline Wireless, offers a mixed use of the spectrum, with public safety getting priority during emergencies. This is the same guy who triggered the largest misallocation of capital in history with his Telecommunications Reform Act of 1996. Hundt has backers in uber-C.E.O. Jim Barksdale (Netscape, FedEx) and uber-venture capitalist John Doerr. An ex-bureaucrat may be clueless, but these Silicon Valley vets should know better. Owning this spectrum would be great for them and a Frontline I.P.O., but not for the economy.
And use by first responders? Easy. Engineer in an emergency switch, controlled by, heck, the same emergency broadcasting system screeching in our radios. During an actual emergency, it could throttle back data speeds for civilians. Downloads of "Fear Factor" can wait while the flood or fire rages.
Can this be true? An avowed free-market capitalist advocating a "let's all own it together" approach to communications? That's right. Despite their façade as public companies, telecom monopolists (that's you, AT&T) are government blessed anti-competitive entities whose idea of innovation is call waiting. We, the people, can do so much better. In fact, Wi-Fi has already begun to unleash the creative chaos of entrepreneurs. We shouldn't allow behemoths to bid on virtual shackles of our airwaves.
This is real. The public airwaves are sitting there waiting to be reclaimed from the dropped call monopolists. Even Tom Friedman gets it.
I've been thinking of running for high office on a one-issue platform: I promise, if elected, that within four years America will have cellphone service as good as Ghana's. If re-elected, I promise that in eight years America will have cellphone service as good as Japan's, provided Japan agrees not to forge ahead on wireless technology. My campaign bumper sticker: "Can You Hear Me Now?"
I began thinking about this after watching the Japanese use cellphones and laptops to get on the Internet from speeding bullet trains and subways deep underground. But the last straw was when I couldn't get cellphone service while visiting I.B.M.'s headquarters in Armonk, N.Y.