Spectrum

In Tech-Driven Economy, FCC Needs to Step Up

By: Mike Montgomery

It’s clear that technology is a key driver of prosperity in today’s modernizing economy. Trillions of dollars in economic activity flow through the networks which make up the internet, making America’s digital economy the envy of the world. Networks are redefining the services people consume and the income people derive. For example, according to a Pew survey, 72 percent of Americans have used a sharing or on-demand service.

That’s why the Federal Communications Commission has never been more important. From last year’s Net Neutrality rules to current proceedings about set-top boxes, internet privacy and business services, FCC rules are shaping the future of the internet – and the broader economy that it fuels. Whether you agree or disagree with these regulations, everyone agrees they will have a profound impact.

That is why it’s so disconcerting to see the FCC disconnected from the economic impact of its decisions. In a report he published in July, the FCC’s very own former chief economist, Gerald Faulhaber, Ph.D., raised alarms about the agency’s dangerous turn away from economic analysis in its decision making.

In the report, Dr. Faulhaber asks: Why do the U.S. Department of Labor, the U.S. Environmental Protection Agency and the Consumer Financial Protection Bureau all conduct stringent cost-benefit analyses on their decisions while the FCC does not?

The FCC has simply become too important to the economy for it to fail to explore the economic impact of its decisions. For example, numerous economists warned the FCC that its decision to impose so-called Title II regulations on internet service providers, which treats today’s advanced broadband access in the same way as telephone services from generations ago, will have a negative impact on investment and innovation while not solving the issue we all want addressed: how to ensure that internet traffic is treated fairly across networks, regardless of where it comes from. Yet, when issuing its Open Internet Order, the FCC conducted no economic analysis of the impact its proposed rules would have on consumers, innovation or investment.

How is that possible?

The problems continue. The FCC is currently facing a major backlash from Congress, Hollywood and many innovators for its proposed new technology standards for set-top boxes.

Read the full article here.

How We Can Stop the Looming Spectrum Crunch

Wireless spectrum is something that you probably never think about. You can’t see it, you can’t touch it, and if you’re not interested in the minutia of federal communications regulations, you probably only have a vague idea of what spectrum is.

But trust me; unless you are living completely off the grid, spectrum is a crucial part of your everyday life. It’s what air traffic controllers use to talk to pilots. It lets you use apps, check email on your phone, and make mobile phone calls. It’s how you can see your baby on a monitor from another room. And it is getting dangerously crowded.

 Read the rest on Medium

 

CALinnovates Advocates for Open Spectrum Auctions

By: Mike Montgomery

CALinnovates submitted this letter to the FCC encouraging the Commission to ensure its upcoming spectrum incentive auction is open to all bidders on equal terms. A process open to all bidders will ensure fairness, competition and increase the likelihood of a successful auction.

The unprecedented rise of mobile broadband — fueled by smartphones and tablets — has led to what has been labeled a “spectrum crunch.” The Commission’s auctions are aimed at alleviating that crunch while at the same time bolstering communications networks for first responders and delivering much-needed revenue to help pay down the Federal Government’s debt.

CALinnovates’ position is that only through an open bidding process can consumers, broadcasters, innovators, and the U.S. government receive the greatest benefit from the incentive auctions.

Thirteen tech industry leaders joined CALinnovates in this call to action, including:

  • Speek’s Danny Boice, conference call disruptor
  • TRAIL’s Josh Bradley, digital literacy advocate
  • Entrepreneur Daniel Brusilovsky, founder of Teens in Tech Labs
  • Conjectur’s co-founder Christopher Roy Correa, mobile loyalty & rewards guru
  • Velocity Venture Capital’s Jack Crawford, investor & Kauffman Fellow
  • Entrepreneur & Thiel Fellow Mark Daniel
  • Stacey Ferreira, Entrepreneur & co-founder of MySocialCloud
  • EdTech Leader & CEO of On Campus Media Scott Krantz
  • Global IT & Cloud Expert Lloyd Marino
  • Disruptive online polling startup founder Taylor Peck of iSideWith.com
  • Kit CEO Michael Perry, builder of an  innovative CRM system
  • Open Gov Advocate and Tech PR Guru Brian Purchia
  • Appallicious Founder & CEO Yo Yoshida, Godfather of the Civic Startup world

What The Consumer Electronics Show Taught About Wireless Spectrum

By: Mike Montgomery
As featured in The Huffington Post

More than 100,000 people descended on Las Vegas for last week’s annual Consumer Electronics Show. While the sale of tech devices is expected to shrink this year (see here), what’s beyond doubt is that Americans’ wireless love affair continues its meteoric growth.

Look no further than this post by Scientific American editor Larry Greenemeier: “5 Technologies to Watch for at This Week’s Consumer Electronics Show.” His top technologies for the future: 3-D printing, ultra-high definition TVs, phablets, wearables, and driverless cars. Of these five developing technologies, three depend heavily on mobile connections.

Read the full article Here

 

FCC Action Key to Our Mobile Future

By: Mike Montgomery

FCC action on a variety of fronts — including spectrum auctions and the transition to next-generation networks — is vitally important, and the agency will need to focus less on talk and more on concrete results under its next Chairman.

This was the takeaway from a recent Washington, D.C. event, “The Mobile Marketplace: The Deals and Consumer Trends Driving Spectrum Valuation,” hosted by Mobile Future, a DC-based group dedicated to encouraging investment and innovation in mobile technology.

If you don’t have the time to watch the webcast, here are some highlights:

Commissioner Ajit Pai outlined how the FCC can help, rather than hinder, growth in the mobile sector, by streamlining processes for mergers and spectrum acquisition, letting the market shape how spectrum auctions are put together, and helping facilitate what he called the “migration from legacy to IP-based networks.”

In other words, out with the outdated copper voice-centric networks that, according to a recent report, only carry 1% of all traffic in the United States, and in with next-generation high-speed broadband infrastructure.  This type of forward thinking policy is particularly important in California, where mobile innovation is a major economic driver in the state.

After Pai’s keynote, an all-star team of panelists discussed the current desire for mergers and spectrum acquisitions among communications providers, the growth in the mobile marketplace, the need to free up more spectrum (which should be of particular interest to Silicon Valley and Silicon Beach, given how bonkers the app economy has become), as well as offered advice for incoming FCC Chairman Wheeler.

Despite the panelists’ various backgrounds and areas of expertise, the overarching theme of the event was loud and clear: given the huge demand for advanced broadband networks and the ever-increasing consumer and business potential of the wireless sector, key decision makers must work to foster opportunity and investment in the industry.

Panelists agreed that Wheeler is well positioned to lead the FCC toward decisive action in modernizing our communications systems and, even more importantly, modernize our telecom regulations.  And this, although occurring 3,000 miles away, will inevitably have a positive impact throughout the expansive technology community in the Golden State.  Anyone whose business model has been stifled by regulation can tell you that public policy tremors in the Beltway can definitely be felt in the Golden State.

 

Communications Trash-Talking in Aspen

Aspen, Colorado. Land of slopes, home of the late, great Hunter S. Thompson, and for one day at least, a place for some fine communications policy trash-talking.

The arena was the opening reception of the Technology Policy Institute’s annual conference. The trash-talker was one R. Stanton Dodge, general counsel for the Dish Network, who told attendees that his company definitely still had plans to jump into the wireless game.

“This is a fine function with Verizon here,” Dodge said, “but we want to eat their lunch and AT&T’s as well.”

While Dodge’s bluster was entertaining, it also highlighted something often forgotten when it comes to communications policy. Specifically, that the industry has no shortage of current or willing participants. According to CTIA, there are now over 30 wireless providers in the U.S., which means Dish is looking to join a rather crowded field that is certainly not lacking a competitive playing field.

Dish’s wireless plans also highlight how important it will be for the FCC to allow unrestricted, competitive bidding among all qualified bidders in its upcoming spectrum auctions.  With its massive spectrum holdings — and plans to acquire more before it launches its service — the satellite TV provider is just one player who could be a major disruptive force in the industry. With every wireless provider in need of more airwaves to keep up with consumer demand on their networks, the FCC must avoid picking winners and losers by favoring some providers while restricting other qualified bidders from participating in the spectrum auctions.

That would be the very definition of anti-competitive behavior.

When Wireless Competitors Compete, Consumers Win

By: Mike Montgomery
As seen on Daily Kos

In the wireless industry it’s possible to be first and third at the same time.

Take, for example, wireless provider Sprint, which was recently acquired by the Japanese firm SoftBank for a little more than $20 billion. It’s a good-sized sum for America’s third-largest wireless provider—but then, that ranking applies only to number of customers, not its spectrum holdings.

While Sprint has only half as many subscribers as Verizon or AT&T, they happen to hold twice as much wireless spectrum – the invisible airwaves that enable mobile devices to send and receive data – thanks to their recent full buyout of Clearwire. Amazingly, Sprint has shown an uncanny ability to simultaneously win and lose, taking the gold medal in spectrum and a bronze in customers.

With their riches in spectrum holdings and underperformance as a business, it’s no wonder the company found itself in the middle of a bidding war between SoftBank and U.S. satelliteprovider DISH.

The point here isn’t to bash Sprint. They’re trying to run their business shrewdly, even if sitting on their airwaves hoard, while pining for more, risks hurting their customers and potentially their shareholders. But Sprint’s enviable spectrum position also shows that when it comes to the allocation of spectrum for wireless providers, industry rank isn’t as cut and dried as the number of customers in your flock.

This distinction is particularly important in light of calls by some carriers, including Sprint, and government officials to artificially limit the two largest wireless providers from the FCC’s upcoming spectrum incentive auctions based on the gap in subscribers between Sprint and Verizon/AT&T. Instead of banging the drum on Capitol Hill about how bad they’ve got it, Sprint should be trying to get more consumers to use their network.

Nevertheless, Sprint’s obvious spectrum advantage coupled with the fact that provider T-Mobile recently joined forces with fellow provider MetroPCS—a move that places the German-owned company in a much stronger, competitive position—the wireless industry is far more competitive than Sprint would like the world to know.

Competitive industries serve a great benefit to consumers by delivering better services at lower prices. Those on the side of restricting the involvement of certain providers from the FCC’s auctions are actually arguing against consumers.  Tens of millions of people just want their phones and tablets to function as designed and want to enjoy exciting new technologies that rely on advanced mobile broadband.  The FCC should consider that AT&T and Verizon have the most customers because consumers choose to use their networks. By restricting their auction participation, the FCC isn’t creating more choices for consumers — it’s hamstringing the choices consumers have already made. That’s not a win for anybody.

As the old saying goes, it’s not personal, it’s just business.  Sprint has the airwaves it needs to take care of its customers and then some, and the same goes with T-Mobile. But without open spectrum auctions, millions of Americans are at risk of receiving diminished service for their hard-earned dollars. To them, that makes it personal.

 

Surf and turf wars in Silicon Valley

By: Mike Montgomery 
As featured in The Hill

At first blush, the event held by Pepperdine University’s School of Public Policy entitled “The Broadband Technology Explosion: Rethinking Communications Policy for a Mobile Broadband World” could have easily seemed like a wonk fest for public policy nerds. But for those of us who made the trip to Silicon Valley’s Quadrus Conference Center on Sand Hill Road, the discussion was anything but boring. Quite the opposite, in fact, since the topics being hashed out are critical to the future of the Valley.

Chief among those topics was spectrum, specifically the best way to make more airwaves available for mobile broadband. By happenstance, the Pepperdine event coincided with the news that Instagram was launching new video capabilities, dubbed Instavine on social media as it was launched to compete with Twitter’s video platform, Vine. As this news lit up Twitter, I asked the panel how video from Instragram’s billion-plus users will affect wireless networks.

“[It] will create a larger load,” AT&T’s Richard Clarke replied. “We’re swimming fast, but the current is moving far faster.”

This demand for ever-increasing amounts of data (the “current” that Clarke spoke of) is driving carriers to pursue more wireless spectrum. The FCC plans to auction off 300 MHz of new spectrum to these wireless companies, but the panelists — including Harvard Business Review’s Larry Downes, Navigant Economics’ Hal Singer, and Pepperdine’s James Prieger — were doubtful that the full 300 MHz will ever reach the auction podium.

Put another way, the FCC’s efforts will only go so far, and unless the commission also eases restrictions on the secondary market transactions for spectrum, shortcomings will continue to exist. And these shortcomings, the panelists were sure to point out, could have a very real effect on the health of the wireless industry.

While no one believes the FCC should get out of the spectrum regulation business, there was broad agreement at the event that the commission needed to rethink its definition of public interest when it comes to the airwaves. Mobile broadband has been such a game changer, smartphones and tablets so explosively popular, that the current definition of public interest for spectrum is quickly falling out of stepwith consumer interests.

Singer in particular opined that the FCC should focus less on antitrust laws in its approach to regulation and instead focus more protecting consumers, a role they are uniquely qualified to fill.

Singer’s point has implications for spectrum policy. By focusing on consumer  to all wireless carriers regardless of their size, the commission will not place itself in the undesirable position of picking winners and losers in a thriving and highly competitive market. Will keeping auctions open, along with the FCC staying within its regulatory lanes, best serve consumer interests? At the Pepperdine event, the answer was a definite yes.

Obama Demands Expanded Airwaves

By Mike Montgomery
As seen on The Huffington Post  

Last week, the White House dropped a broadband bombshell in the form of a series of initiatives aimed at freeing up government-controlled spectrum for wireless providers. It also released a new report, “Four Years of Broadband Growth,” which is brimming with positive news about our nation’s broadband infrastructure.

It was a good week for both consumers and our country’s vibrant tech industry.

In Silicon Valley, President Obama’s focus on spectrum was especially welcome. In many ways, mobile broadband has become the lifeblood of our tech community. But as wireless providers are increasingly strapped for spectrum — and consumers continue to embrace mobile broadband at an unprecedented pace — there have been valid concerns that the blood would stop flowing. Or at the very least, that clogged airwaves would give the local tech industry chest pains.

As the single largest holder of spectrum, the U.S. government has the power to ensure America remains at the forefront of mobile broadband. The FCC’s upcoming spectrum incentive auctions have the potential to alleviate some of the congestion wireless providers face, but the fact of the matter is more action will be needed to free up spectrum, and needed quickly, in order to keep up with ever-growing consumer demand for advanced broadband-enabled services and applications.

While you could easily take the cynical view and declare allocating more spectrum for wireless is long overdue, it’s worth remembering that mobile broadband — and the mobile app industry it has sparked — is still in its infancy. The smartphone revolution only really began six years ago, after all, and outside of a select few visionaries, few had anticipated the monumental shift that has followed.

If wireless providers were caught somewhat flat footed by the sudden surge in demand for data on their networks, they’ve been investing billions to catch up. As the White House broadband report shows, annual investment in wireless networks jumped by more than 40 percent from 2009 to 2012 — from $21 billion a year to $30 billion. At the same time, the report finds, investment in Europe was static, and in Asia — including China — it only increased by 4 percent.

For Silicon Valley, all this investment in wireless infrastructure has helped inspire a wave of innovation and economic growth. And with more than 500 million connected devices and counting in America, we may only be at just the beginning of the mobile broadband boom. That’s what makes President Obama’s focus on spectrum so critical. More spectrum will mean more powerful networks, which will mean more innovation, which will inspire more investment in more powerful broadband networks.

As long as government policies continue to encourage investment in our nation’s broadband networks, this cycle of investment and innovation has the potential to become an even bigger economic powerhouse. President Obama has called for every part of America to be connected to the digital age. For Silicon Valley, and the country’s other tech hubs, that’s a goal worth achieving.

Competitive Field of Spectrum Bidders Benefits Everyone

As featured on Daily Kos 
By: Mike Montgomery

$12 billion.

That’s a lot of clams, even to the federal government. But that’s approximately how much the Federal Communications Commission (FCC) will be leaving on the table if they restrict some bidders during their upcoming spectrum incentive auctions, according to economists Robert J. Shapiro, Douglas Holtz-Eakin, and Coleman Bazelon. In their study published by Georgetown University, “The Economic Implications of Restricting Spectrum Purchases in the Incentive Auctions,” the trio warn that limiting just two participants — Verizon and AT&T — from taking part in spectrum auctions could “reduce auction revenues by about 40 percent.”

But wait, there’s more. The group also estimates that forcing certain providers to watch from the sidelines could raise consumer bills by 9 percent. In short, the federal government will be refusing money, and consumers will be paying more money for their wireless service.

If that sounds backward to you, you’re not alone.

The fact of the matter is providers big and small desperately need more spectrum to meet the customers’ demands. The unprecedented popularity of smartphones and tablets — and all the mobile data their owners use — are taxing networks. It’s a problem former FCC Chairman Julius Genachowski called “America’s looming spectrum crisis.” And unless more airwaves are freed up for wireless use soon, the word “looming” will no longer apply.

Congess’ bold incentive auctions — which, in a nutshell, will enable broadcasters to voluntarily sell their spectrum holdings in exchange for compensation — are aimed at helping alleviate this problem. On paper, the auctions could be a boon for both the broadcasters and the federal government, and wireless providers will be able to breathe a bit easier knowing their networks won’t suddenly seize up due to overcapacity. Call it a win-win-win.

Actually, call it four wins. The tech industry will also benefit, since more spectrum will mean more powerful and reliable wireless network capabilities. Bigger pipes, as they say, for bigger ideas.

But in order for us to rack up all these wins, the FCC must ensure the same rules apply to every bidder across the board. Restricting some carriers from being able to purchase the spectrum they need at auction won’t foster competition; if anything, it fosters the spirit of uncompetitive behavior.

Whatever framework the FCC decides upon should depend on two factors: getting the most bang for the spectrum buck, and perhaps more importantly, ensuring that those bidding are able to put newly acquired spectrum to use quickly and efficiently. After all, airwaves purchased and locked in the vault won’t help anybody.

That’s what makes the idea of restricting some providers from fully participating in the spectrum auctions about more than the potential loss of billions in much needed revenue for the federal government. In the end, consumers — the very ones the FCC are theoretically trying to help — will end up losing the most, either through higher prices or declining service quality. Those are two consequences consumers shouldn’t have to face.

View the article on the Daily Kos website here

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