Cyren Call, Verizon, and public safety

by on September 8, 2006 · 15 comments

A quick recap and then some thoughts. As part of the digital TV transition, broadcasters will return spectrum they currently use in the 700 MHz band to the federal government. Congress decided that 24 MHz of that returned spectrum will be given to public safety agencies and the rest (36 MHz, I believe 60 MHz) will be auctioned.

The system by which spectrum is doled out to, and used by, public safety agencies is broken. If you or I want mobile communications, we don’t file for an FCC license or build our own towers, we simply go to a wireless carrier who has a comparative advantage and economies of scale and buy capacity from them. Public safety agencies, on the other hand, build their own infrastructure, which, as Thomas Hazlett has said, is much like “shipping each police department tons of steel, plastic and rubber to make them responsible for constructing their own patrol cars.” Not only is that inefficient, but because they don’t often coordinate, their different systems are incompatible.

Nextel founder Morgan O’Brien’s new venture, Cyren Call, recently filed a petition with FCC that proposes creating a nationwide, completely interoperable wireless network that could be used by public safety users. To help finance it, private users would also be sold capacity on the network, but would be bumped off in case of emergency to give public safety users priority. The catch, however, is that Cyren Call’s plan calls for this network to be built not on the 24 MHz of spectrum set aside by Congress for public safety, but on 30 MHz of the spectrum slated for auction, which Cyren Call wants (Congress, presumably) to give free and clear to a national “public safety broadband trust.”

This has supporters of auctions up in arms, including the cellular industry, which wants to buy the spectrum and doesn’t just want to see it handed over to a competitor. This week comes word that Verizon has one-upped Cyren Call and is proposing a national public safety network of their own, except that theirs would only use the 24 MHz allocated by Congress to public safety. The downside to the Verizon plan, as I see it, is that it would not allow private users to participate in the network, thus shrinking possible economies of scale.

First the good news: Policy makers finally seem to be realizing that the current system of self-provisioned public safety communications capacity doesn’t work and that instead the answer lies in private provision by companies with a comparative advantage in wireless communications. A system such as the ones proposed by either Cyren Call or Verizon would be better than what we have now. In fact, it’s what the UK does.

In that country one company, O2, provides police and other agencies with a national network. Agencies only pay an access fee and a monthly fee for each handset used–a lot like a cell phone. The UK telecom regulator, Ofcom, has come up with a list of over 100 organizations that have a predominant public safety mission and these are allowed to join the network if they so choose. O2 has signed up many agencies to the completely interoperable system–from the ambulance services to the dog catchers.

The problem with the UK system, and with Verizon and Cyren Call’s proposals, is that they create a government-backed monopoly. Why not have competing networks just like we have competing cellphone carriers? (Cyren Call and Verizon could be the first two.) What might be required, however, is forced interconnection to ensure interoperability. I don’t know what I think about this yet and I’d love to hear your thoughts on this. I also don’t know how a standard for such interconnection would be set (I fear an FCC process. How did the DTV race work out?), and that’s something else I would appreciate thoughts on. (I’m writing a paper on all this, BTW.)

Another drawback of the UK system that Verizon’s plan shares is that the network is only open to public safety users. Why should that be the case? Except for predictable and short peak times, public safety bands go largely unused. What’s wrong with allowing private users to sign up to the network as long as you give priority to public safety calls? Companies such as Racom in Iowa do just this and it works. It also grows the economies of scale that might be the difference between making such networks feasible or not. And it would make such networks cheaper for public safety since they’d be sharing the cost with private users.

  • M McTigue

    Instead of regulation it is possible to make the desired conditions contractural as part of the sale and purchase agreement when allocating the spectrum. The advantage then is that the conditons are the subject of contract law not administrative law and pretty much self enforcing. The New Zealand government did something like this when it sold the telephone company in 1989 and avoided having to appoint any regulator because allowing inter connect was part of the sale and purchase agreement and anyone from anywhere in thew world was allowed access to the telecommunications market. Maurice

  • M McTigue

    Instead of regulation it is possible to make the desired conditions contractural as part of the sale and purchase agreement when allocating the spectrum. The advantage then is that the conditons are the subject of contract law not administrative law and pretty much self enforcing. The New Zealand government did something like this when it sold the telephone company in 1989 and avoided having to appoint any regulator because allowing inter connect was part of the sale and purchase agreement and anyone from anywhere in thew world was allowed access to the telecommunications market. Maurice

  • Steve R.

    I will respond based on two concepts. First, I am opposed to the privatization of the radio spectrum. It is already owned as private property by the government on behalf of the people of the United States. Second, I believe that the discussion is inappropriately mixing the design of a public safety communications system with the proposal to privatize the radio spectrum. The design of how a public safety communication system operates is totally independent of any perceived need to privatize the radio spectrum.

    I am opposed to the privatization of the radio spectrum for I see, in the end, little distinction between the eventual birth of a private FCC (equivalent) and the current government run FCC. I prefer the government run FCC since, in theory, it is acting on behalf of the citizens of the United States. Also, I believe that the FCC may be getting excessively bad press and that positive aspects are conveniently overlooked. For example, the FCC, in terms of the Amateur Bands, has delegated band planning and band operating responsibilities to the users. Since the focus of my reply is meant for topic #2, I will cut this one short.

    In terms of topic #2, the statement is made that the way “by which spectrum is doled out to, and used, by public safety agencies is broken.” I believe incorrectly mixes access to the radio spectrum with how agencies actually use the spectrum. The two concepts are separate. The claim is made that when public agencies build there own infrastructure that this is inefficient and that they fail to properly coordinate. Those are organizational issues that require that these agencies get their act together, it does not justify the expropriation of government owned spectrum for the benefit of a private entity. This is simply the reverse eminent domain (see Kelo v. City of New London, 125 S. Ct. 2655 (2005)).

    The statement is made that “Nextel founder Morgan O’Brian’s new venture, Cyren Call, recently filed a petition with FCC that proposes creating a nationwide, completely interoperable wireless network that could be used by public safety users.” I agree, let him try and make him compete, in a free market, for his proposed service; but do not expropriate the existing public service bands. If his approach works, the public agencies will abandon the frequencies and the FCC can lease the abandoned frequencies to others.

    The statement is made that “Agencies only pay an access fee and a monthly fee for each handset used — a lot like a cell phone.”. This could be a good thing or it could be a bad thing, depends on your perspective. Renting makes sense if you only intend to use a piece of property (radio equipment) for a limited period of time and your net outlay is less than the cost of that property. Owning makes sense if you intend to hold that piece or property for a long period of time. Owning may be the cheaper alternative for government agencies. Additionally, private companies seek to make a profit, which is an added expense to the taxpayer. If, Mr. O’Brien’s can truly offer a cheaper service let him compete, in the free market, to freely convince the public agencies to switch to his service.

    Also I would like to add, that most radio equipment bought by government agencies is already purchased from private companies which helps the economy and where access to the spectrum is, as far as I know is free for public agencies. Now private industry not only seeks continued revenue from the sale of equipment but also from access to the spectrum. Sounds like a form to taxation. In conclusion, radio spectrum that belongs to the government agencies cannot be expropriated to “tax” them as a subsidy to benefit a private company.

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    I will respond based on two concepts. First, I am opposed to the privatization of the radio spectrum. It is already owned as private property by the government on behalf of the people of the United States. Second, I believe that the discussion is inappropriately mixing the design of a public safety communications system with the proposal to privatize the radio spectrum. The design of how a public safety communication system operates is totally independent of any perceived need to privatize the radio spectrum.

    I am opposed to the privatization of the radio spectrum for I see, in the end, little distinction between the eventual birth of a private FCC (equivalent) and the current government run FCC. I prefer the government run FCC since, in theory, it is acting on behalf of the citizens of the United States. Also, I believe that the FCC may be getting excessively bad press and that positive aspects are conveniently overlooked. For example, the FCC, in terms of the Amateur Bands, has delegated band planning and band operating responsibilities to the users. Since the focus of my reply is meant for topic #2, I will cut this one short.

    In terms of topic #2, the statement is made that the way “by which spectrum is doled out to, and used, by public safety agencies is broken.” I believe incorrectly mixes access to the radio spectrum with how agencies actually use the spectrum. The two concepts are separate. The claim is made that when public agencies build there own infrastructure that this is inefficient and that they fail to properly coordinate. Those are organizational issues that require that these agencies get their act together, it does not justify the expropriation of government owned spectrum for the benefit of a private entity. This is simply the reverse eminent domain (see Kelo v. City of New London, 125 S. Ct. 2655 (2005)).

    The statement is made that “Nextel founder Morgan O’Brian’s new venture, Cyren Call, recently filed a petition with FCC that proposes creating a nationwide, completely interoperable wireless network that could be used by public safety users.” I agree, let him try and make him compete, in a free market, for his proposed service; but do not expropriate the existing public service bands. If his approach works, the public agencies will abandon the frequencies and the FCC can lease the abandoned frequencies to others.

    The statement is made that “Agencies only pay an access fee and a monthly fee for each handset used — a lot like a cell phone.”. This could be a good thing or it could be a bad thing, depends on your perspective. Renting makes sense if you only intend to use a piece of property (radio equipment) for a limited period of time and your net outlay is less than the cost of that property. Owning makes sense if you intend to hold that piece or property for a long period of time. Owning may be the cheaper alternative for government agencies. Additionally, private companies seek to make a profit, which is an added expense to the taxpayer. If, Mr. O’Brien’s can truly offer a cheaper service let him compete, in the free market, to freely convince the public agencies to switch to his service.

    Also I would like to add, that most radio equipment bought by government agencies is already purchased from private companies which helps the economy and where access to the spectrum is, as far as I know is free for public agencies. Now private industry not only seeks continued revenue from the sale of equipment but also from access to the spectrum. Sounds like a form to taxation. In conclusion, radio spectrum that belongs to the government agencies cannot be expropriated to “tax” them as a subsidy to benefit a private company.

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