The FCC’s much-maligned proposal to create a free, filtered wireless broadband network seemed all but dead earlier this week after FCC Chairman Kevin Martin stated in an interview with Broadcast & Cable that the proposal’s chances of surviving a full FCC vote were “dim.”
Now, Ars reports that Kevin Martin has changed his mind about the filtering requirements, caving in to pressure from an array of interest groups to drop the smut-free provisions from the plan. These “family-friendly” rules, which would have mandated that the network filter any content deemed unsuitable for a five-year-old, ended up acting as a lightning rod for critics across the ideological spectrum, and raised serious First Amendment concerns (as Adam and Berin have argued on several occasions).
Even with the smut-free rules having been removed, the proposal remains a very bad idea. Setting aside 25 mhz of the airwaves—a $2 billion chunk of spectrum—to blanket the nation with free wireless broadband (as defined by the FCC) would mean less spectrum available for more robust services. At a time when wireless firms are experimenting with a number of strategies for monetizing the airwaves, allowing a single firm’s business model—especially one that many experts have suggested is simply not viable—to reign over other, more effective models would hurt consumers who yearn for more than basic broadband service.
The case for setting spectrum aside for free wireless broadband is predicated on the myth that there exists an elusive “public interest” that the marketplace is unable to maximize. We’ve heard the same line many times before. It goes something like this: The forces of competition that we rely upon to allocate finite resources in nearly every other sector of the economy are incapable of fulfilling consumer needs when it comes to broadband. Washington DC intellectuals have figured out that the public really wants a free nationwide wireless network—yet this amazing concept has been blocked by evil incumbents that are bent on denying consumers the services they most desire.
This is all baloney, of course. As a group of economists demonstrated in a research paper published a few months ago, there’s strong evidence that the broadband market is actually functioning quite efficiently, and imposing conditions on spectrum operation hurts consumers more than it helps them.
None of these facts have deterred M2Z Networks, a startup wireless firm responsible for much of the advocacy behind the proposal, from conducting a massive, multi-year PR campaign to convince people that free wireless broadband is a worthy goal. But if the proposed network does ultimately prevail, it will owe its success not to actual market performance, but to astute political maneuvering.
Currying favor with Washington regulators by trotting out public interest rhetoric and asserting market failure has worked out quite well for firms recent years. It’s no wonder, then, that M2Z decided to try its hand at persuading the FCC that its plan justified the imposition of special rules. In an open auction without conditions, the price of the spectrum would undoubtedly be higher, and investors would likely be willing to make bigger bets on more viable business models.
The FCC should scrap the free wireless broadband proposal and instead auction off the 2155-2180mhz band with no strings attached. That way, all business models will get a fair shake, and consumer demand—rather than political considerations—will determine who succeeds and who fails.
Will there ever be a place for a nationwide free wireless broadband service in America? More than likely, the answer is yes. As advertisers get better at translating eyeballs into dollars, and engineers continue to improve upon the spectral efficiency of wireless broadband, it’s a safe bet that someday we will see some sort of a nationwide network that offers free Internet access to anyone who’s willing to see a few extra advertisements. But now is not the time for such a network.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.