FCC’s obsolete wireless competition mindset
The FCC continues to astonish in how it can ignore reality.
The FCC just refused to officially conclude in its mobile competition report that the U.S. wireless market is “effectively competitive.” Never mind that the FCC report shows the U.S. wireless market to be as competitive as it has ever been. Never mind that it’s more competitive than virtually any wireless market in the world.
Apparently, the FCC is not formally acknowledging the obvious because that would undercut any justification for its regulatory plans to artificially constrict the supply of spectrum to leading wireless competitors via its proposed “spectrum screen” rulemaking.
Part of the reason why the FCC is unwilling to admit the U.S. wireless market is exceptionally competitive is because many at the FCC do not like the natural outcomes of competitive market forces. They prefer to “manage competition” to produce FCC-desired outcomes: i.e. the redistribution of market share from the wireless leaders, Verizon and AT&T, to Softbank-Sprint, T-Mobile, and others.
However, the FCC has a serious credibility problem here. The biggest threat to the U.S. wireless market long term is not insufficient competition, but the government’s wasteful hoarding of 85% of the spectrum most suitable for auction between 400 MHz and 3 GHz.
The FCC is nitpicking about the outstanding performance of the American private sector in leading the world in wireless broadband competition; 4G LTE deployments, network investment, and innovation — when the government’s spectrum supply house is in scandalous disarray.
Shockingly in 2013, the federal government still has no modern resource management of spectrum; no open or transparent inventory of spectrum overall detailing who uses what spectrum how much; no formal OMB or congressional oversight of spectrum; no spectrum utilization measurement; and no good government accountability systems for spectrum.
If one reads the FCC’s 16th Mobile Competition Report, one will see the FCC is capable of clearly laying out multiple, big-picture, understandable, standardized measures of commercial wireless competition.
However, when one looks at how the FCC explains the U.S. Government’s spectrum inventory and pipeline for auction, one finds the exact opposite. It’s chaotic, narrow, opaque, confusing, and woefully incomplete. It’s an historical recitation of bureaucratic gobbledygook that gives the reader no sense of the big picture, how well the government is managing its spectrum, or any predictable sense of the future of spectrum supply.
Sadly, the difference between the FCC’s interest in understanding and explaining the private sector’s competitive performance and the Government’s spectrum management performance could not be starker.
It is outrageous that the FCC is considering constricting the supply of spectrum to U.S. wireless competitors when first, government spectrum waste and mismanagement is the real cause of any potential spectrum scarcity, and second when the federal government has shown so little sense of urgency in actually getting more spectrum to auction.
The confusion gets worse. Anyone seeking more certainty about the future of the U.S. government’s spectrum auction pipeline confronts the stark dissonance between the Administration’s commitment to get 500 MHz to auction in 10 years and the President’s Council of Advisors on Science and Technology (PCAST) subsequent report that recommends curtailing the current auction pipeline and replacing it with government-commercial sharing of a very different 1000 MHz of spectrum.
Does anyone know what’s going on with the spectrum auction pipeline?
In short, the FCC’s 16th Mobile Competition Report totally misses the forest for the trees.
If it was really focused on promoting wireless competition, adoption, and innovation long term, the FCC would not be nitpicking and second-guessing what is working, but would be laser-focused on fixing what is most-badly broken and in desperate need to fixing for America’s wireless future – the government’s hoarding, waste and mismanagement of spectrum and its dysfunctional spectrum auction pipeline.
Simply, the modern, high-performing U.S. wireless broadband industry needs and deserves a modern government spectrum resource management system, not the current obsolete and poor-performing one.
Scott Cleland is Chairman of NetCompetition a pro-competition e-forum supported by broadband interests and President of Precursor LLC, a research consultancy for Fortune 500 companies. Cleland served as Deputy U.S. Coordinator for International Communications and Information policy in the George H.W. Bush Administration.