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April 26, 2007

Good News from the FCC

Yesterday the Federal Communication Commission announced some proposed rules and a comment period for the very important upcoming auction of 700MHz frequencies which television broadcasters are scheduled to vacate in February 2009. The news is about as good as it could possibly be for using these frequencies to greatly enhance the quality and availability of broadband access in the United States – although it could have been a lot better if Congress had permitted this spectrum to be opened up like WiFi frequencies instead of auctioned off. 

According to CNET: “Since Congress decided in 1997 to re-auction the 700MHz spectrum used to transmit analog TV signals, communication policy makers have viewed this sliver of the airwaves as a panacea to all the nation's broadband-access problems.”  Just as a reminder, this spectrum is ideal for access use since it goes through walls and leaves and travels about far times further than the frequencies usually used for wireless Internet access today.

The critical question is what the rules of the auction will be. Will the rules, for example, permit existing megacarriers and cable companies to buy up all the available bandwidth and perhaps prevent it from being used to compete with their DSL and cable broadband offerings? Will huge national blocks be auctioned off and then, perhaps, lie fallow in rural areas?  Will there be requirements that winners of the auction actually offer services over the “airwaves” they buy? Will there be any net neutrality requirements placed on incumbents?  The FCC didn’t actually decide any of these issues but they did give them prominence in the list of what they are asking for comment on.

Equal in importance to the questions the commission asked are the statements of the commissioners, particularly Chairman Martin who has not been known as an advocate of competition for established telcos:

“One important factor spurring both increased broadband availability and reduced prices is competition among broadband platforms. 

“In much of the country, however, consumers have a choice of only two broadband services: cable or DSL.  And in some parts of the country, consumers don’t even have that choice.  The most important step we can take to provide affordable broadband to all Americans is to facilitate the deployment of a third ‘pipe’ into the home.  We need a real third broadband competitor.  And we need a technology that is cost-effective to deploy not just in the big cities, but in the rural areas, as well.  All Americans should enjoy the benefits of broadband competition – availability, high speeds, and low prices.

“The upcoming auction presents the single most important opportunity for us to achieve this goal.  Depending on how we structure the upcoming auction, we will either enable the emergence of a third broadband pipe – one that would be available to rural as well as urban American – or we will miss our biggest opportunity…”

He’s right that we need more broadband competition and that this auction is key to making sure we have it.  He’s wrong, I think, to assume that the answer is a single third competitor as he seems to imply; it may be establishing a way for many companies to compete.  But, even if we got just a third competitor, we’d be much better off than we are today with an effective duopoly in urban areas and no service in many rural areas.

A coalition of Consumer Federation of America, Consumers Union, Free Press, Media Access Project, New America Foundation and Public Knowledge has asked the FCC to auction half the available bandwidth with the restriction that the winner must agree to provide “open access”.  They are claiming preliminary victory (justifiably) since the FCC has included this proposal in the request for comments.

Open access means that winner agrees not to block or discriminate against any types of traffic (basically net neutrality) and allow free connection of devices in its spectrum with just a requirement that the devices not interfere with network access by others. Moreover, open access in the coalition definition also means that the winner must make at least half of its capacity available at wholesale on a non-discriminatory terms. If implemented (which is difficult) and enforced (hasn’t always happened) , these provisions would turn this new spectrum into a platform for competition from many parties.

Harold Feld, senior vice president of Media Access Project, a nonprofit law firm representing the coalition before the FCC, is quoted in the CNET article: “Pretty much everyone agrees this is the last big piece of spectrum to be auctioned off for the foreseeable future. And if you don't get the rules right, the existing players could control the auction and then nothing in our wireless broadband future will change. But if they do get them right, there is great potential for some dynamic innovation.”

Related posts:

Spectrum Serendipity

Internet 2.0 is Open Spectrum

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