Wireless & Spectrum Policy

Wireless Substitution: Some New CDC Numbers

by on May 18, 2008 · 9 comments

The National Center for Health Statistics, part of the Center for Disease Control, recently released some new data on wireless substitution collected from a survey conducted in the second half of last year. The report notes that:

Preliminary results from the July-December 2007 National Health Interview Survey (NHIS) indicate that nearly one out of every six American homes (15.8%) had only wireless telephones during the second half of 2007. In addition, more than one out of every eight American homes (13.1%) received all or almost all calls on wireless telephones despite having a landline telephone in the home.

I found it interesting how the report broke out that latter group of “wireless-mostly households” since that’s the group I’m in. My wife and I keep a landline (1) for emergency purposes, and (2) as the equivalent of a spam line that we can give out to people who demand a phone number but who we never want to talk to again! Anyway, I think these numbers make it clear that, in a few years time, the majority of Americans are likely to be wireless-only or wireless-mostly homes and wireline systems will grow less and less important.

CDC wireless substitution numbers

Update: Jason Fry of the Wall Street Journal explores what these numbers mean in his entertaining column today, “The Landline That Refused to Leave.” And his colleague Carl Bialik, who pens the always-brilliant “Numbers Guy” column for the Journal also sounded off on this.

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Localism is the new Fairness Doctrine

by on April 23, 2008 · 28 comments

Just as pink was the new black and The Backstreet Boys were the new New Kids on the Block, the FCC is now turning “Localism” into the new Fairness Doctrine.

The Fairness Doctrine mandated that controversial issues of public importance be presented in a manner deemed by the FCC to be honest, equitable, and balanced. Though Localism isn’t concerned with political speech, both sets of rules interfere with the editorial process, both control and compel speech, and neither passes Constitutional muster.

The FCC has reasons to believe that Localism is a concern, but those reasons lack the weightiness and depth of well-conducted policy research needed for rule making. Commisioner Copps has stated that:

We have witnessed the number of statehouse and city hall reporters declining decade after decade, despite an explosion in state and local lobbying. The number of channels have indeed multiplied, but there is far less local programming and reporting being produced.

Yet only a few short years ago former FCC Chairman Michael Powell made this statement on the issue of localism:

Local newscasts have become the staple of any successful local broadcast tele

vision station, demonstrating that serving the needs and wants of your local community does not just fulfill their public obligations, but also simply make good business sense.

Powell also stated in 2004 that Americans today “have access to more local content than at any time in our nation’s history.” But still, commissioners like Michael Copps don’t approve of how that local news is produced or what it contains.

But events of national and international importance do not occur in accordance with regulators’ preconceived notions of how much coverage ought to be allotted to them. Local news outlets should not be wary of reporting on wars overseas, famine in the developing world, or other non-local issues they deem important for fear of neglecting to comply with bureaucratic dictates.

The Fairness Doctrine had the arguably worse effect of making many broadcasters shy away from political coverage altogether, for fear that–try as they may–their coverage would be considered “unbalanced.” Twenty years after instituting this misguided rule, the FCC finally acknowledged this fact in the wake of a 1985 Supreme Court decision (FCC v. League of Women Voters, 468 U.S. 364) which found that the rule was “chilling speech.”

The result was an explosion in talk radio content beginning most famously with conservative pundit Rush Limbaugh, but also creating new space for left-liberal voices like Thom Hartmann and Al Franken.

Where the Fairness Doctrine chilled all speech, Localism will compel speech of which FCC Commissioners like Copps approve. In a world of limited broadcast hours, compelling one sort of speech means sacrificing speech of another, effectively censoring speech.

Should we be content to let the FCC tell us what we have to say when we’d never stand for it telling us what we can’t say? Oh wait, I suppose we do let it tell us what we can’t say.

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Games Google Plays: The Psychology of the Spectrum Auction

by on April 18, 2008 · 7 comments

I can’t let the week end without calling attention to  a Bloomberg article on Republican outrage over the FCC’s cession to Google’s petition for “gaming” the spectrum rules.

At Tuesday’s House Energy and Commerce Subcommittee on Telecommunications and the Internet, Molly Peterson reports that:

Rep. John Shimkus (IL) asked whether Google had “duped” the FCC by bidding primarily to trigger the open-access rules. FCC Chairman Kevin Martin said the agency wasn’t duped, adding that the rules weren’t designed to prevent any company from bidding. “My goal was to make sure that whoever won the C-block had an open platform,'” Martin, a Republican, told the House telecommunications subcommittee.

The 463 blog smartly caught the irony of a company playing the game too successfully:

The only right thing for Google to do is to begin to shut down it’s overly effective Washington operation. They are clearly operating on a level that is unfair to all those telecom giant DC neophytes.

But here’s the real takeaway. Google’s public policy pitch was a crafty and bold maneuver. By asserting public interests, Google convinced the FCC to skew the spectrum rules to favor Google’s ad-based business model over competitive models that receive revenue from monthly subscriptions or operating networks. Continue reading →

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Bad Data & Broken Databases at the FCC

by on April 17, 2008 · 6 comments

The FCC is continuing its desperate search for a reason to exist. This year it’s decided to assert its relevance by reengaging an issue that it had ignored since 2004. The “Localism” debate has reemerged and one of the most troubling aspects of this debate is the focus on the supposed lack of ownership of broadcast television and radio stations by women and minorities. While the goal of increasing diversity in the sphere of broadcast media is a noble one, the data being used to justify new rules is specious.

Many have attempted to validate their concerns over ownership diversity by referencing a March 2008 GAO study which focuses on media ownership. However, this report admits freely that FCC data is severely lacking.

Many of you who follow TLF will note that Jerry Brito has done extensive work on government transparency and the importance of making data truly accessible–you know, putting it online rather than in a basement in the Capitol. While it’s no surprise that some agencies haven’t updated their record keeping, it is a little disturbing that the FCC–a commission charged with regulating some of the most advanced technology available–doesn’t keep adequate records. Specifically the GAO sites the problems with Form 323, the FCCs method of collecting information on broadcast station owner gender, race, and ethnicity:

Companies must file the Form 323 electronically. However, FCC allows owners to provide attachments with their electronic filing of the Form 323. These attachments may include the gender, race, and ethnicity data. Since these data are not entered into the database, the data are unavailable for electronic query.

This flaw in data collection is certainly laughable, but the most glaring deficiency is that the FCC doesn’t require sole proprietors, limited partnerships, or non-profits to report on ethnicity of owners—leaving one to wonder how it assesses this information at all. Excluding these legal entities from data collection leaves only incorporated radio stations in the group required to file FCC Form 323 which contains information on race and gender.

But how does one determine the sex or ethnicity of a corporation? Clear Channel Communications—one of the nation’s largest owners of radio stations—has issued nearly 500 million shares of stock. Has Clear Channel polled every share holder about their race or gender? It’s doubtful. It’s also doubtful that any method of determining the race and gender of the owners of corporate stations could ever be done in a way that’s meaningful or anything close to a basis for sound public policy.

Continue reading →

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Just sell off the D block?

by on April 15, 2008 · 0 comments

Chairman Martin and his FCC colleagues testified today before the House Energy and Commerce Telecommunications and the Internet Subcommittee on the just-completed 700 MHz spectrum auction. At the top of the agenda was the failed D Block auction. According to Martin, all options are on the table. According to the WSJ, however, some have definite ideas for the block:

Some Republican members on the committee said they believed the 10 megahertz of spectrum should be sold off to the commercial wireless industry, and part of the proceeds then given to public safety so they could solve their communications shortcomings on their own.

Those who advocate this solution have argued that public safety entities already control more than enough spectrum allocated to them by Congress over the years, but that it is being used ineffectively.

Those “some republicans” seem to include ranking member Joe Barton.

This is a bad idea. While I’m sympathetic to the argument that “public safety entities already control more than enough spectrum allocated to them by Congress over the years, but that it is being used ineffectively,” throwing more money at the problem isn’t going to fix it, either. Bringing commercial providers into the public safety sphere can help begin to break down the collective action problem that is the cause of the ineffective use of spectrum. If a commercial solution is successful, maybe then Congress can take a second look at all the spectrum public safety now holds and do something akin to the DTV transition: auction the spectrum while moving public safety to better, more efficient technologies.

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Google’s Bids

by on April 8, 2008 · 7 comments

Communications Daily ($) cited my recent post comparing Google’s limited objectives for the 700 MHz auction with the expansive objectives it outlined to the Federal Communications Commission last summer, and it included the following reaction to my comments from Richard Whitt of Google:

Whitt said in response that Haney had misread his company’s comments from last summer. “We consistently have argued that the open access license conditions adopted by the FCC would inject much-needed competition into the wireless apps and handset sectors, but would not by themselves lead to new wireless networks,” he said Monday. “Only if the commission had adopted the interconnection and resale license conditions we also had suggested — which the agency ultimately did not do — would we have seen the potential for new facilities-based competition.”

Another way to look at this is if there wasn’t any potential for new facilities-based wireless competition without the interconnection and resale license conditions Google wanted, why would Google have submitted bids for the spectrum which it might have won and had to pay for?

I do agree that prior to the FCC’s adoption of two of the four open platform principles Google proposed the company consistently premised its commitment to participate in the auction on the FCC adopting all four principles.  I also agree Google was clear that it believed all four principles were necessary to promote competition.

Then it participated in the auction anyway.

Continue reading →

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Back To Spectrum Giveaways

by on April 4, 2008 · 2 comments

In 1993 Congress substituted auctions for the deplorable practice of giving away valuable spectrum to well-connected commercial entities.

Lawmakers who think spectrum is a valuable public resource for which the taxpayers should be compensated need to wake up for a minute. FCC rulemaking could render the remaining assets worthless, distort wireless competition and contribute to the unfortunate perception of the FCC as a candy store.

Google has made it clear that it plans to weigh in at the FCC as it determines how to re-auction the D-block from the recent 700 MHz auction, and that it wants to open the white spaces between channels 2 and 51 on the TV dial for unlicensed broadband services.

Anna-Maria Kovacs, a regulatory analyst, reported that in the recent 700 MHz auction AT&T Mobility paid an average price of $3.15 per POP in the B-block while Verizon Wireless paid 77 cents per POP in the C-block which was subject to special rules advocated by Google.

Now comes an admission that Google’s main goal was not to win C-block licenses in the auction but to jack up the price just enough so the reserve could be met, according to the New York Times.

“Our primary goal was to trigger the openness conditions,” said Richard Whitt, Google’s Washington telecommunications and media counsel.

This certainly isn’t consistent with the way Google presented the open access proposal to the Federal Communications Commission last summer.

Continue reading →

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Cleland: Google Took $7 Billion

by on April 4, 2008 · 4 comments

The always entertaining Scott Cleland has calculated Google’s take from the 700Mhz auction at $7 billion. It seems he’s used a fair method for calculating the value lost to taxpayers due to Google’s preferred “open access” condition. (Cleland’s conclusions beyond that are, again, good entertainment.)

Keep in mind that Google’s “take” is money taken from taxpayers, not yet money collected by Google. But it could easily get to be that much if its “Android” mobile operating system and many of the communications and transactions on it accrue to Google’s benefit.

I like the idea of an open wireless network and would like to see it happen. I just don’t think that any company should enjoy windfall profits from such a network coming into being. Google could have created an open network by paying full price for the spectrum in an open auction rather than by gaming the regulatory system.

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The Genesis of Unlicensed Wireless Policy

by on April 3, 2008 · 0 comments

There’s been quite a bit of discussion on this forum recently about whether vacant television channels — also called “white spaces” — should be licensed or unlicensed. Currently, of course, most of us experience Wi-Fi as a form of unlicensed wireless, as in the 2.4 Gigahertz bands.

Last year, I wrote about the issue of white spaces, mainly in the context of the National Association of Broadcasters:

…[B]roadcasters lost the spectrum wars – or at least the first spectrum war of the 21st Century. In early 2006, Congress said enough: broadcasters weren’t effectively using channels 52 to 69, and certainly wouldn’t need them after the transition to digital television (DTV) was completed. Television stations will be forced off those channels, corresponding to 698-806 MHz, on February 17, 2009.

That’s 700 MHz. But what about 500 MHz and 600 MHz? All told, there are 294 MHz of frequencies that broadcasters will continue to occupy ever after the DTV switchover. If more than 85 percent of Americans receive television from cable or satellite, as they do, what sense does it make to reserve these choice frequencies for broadcasters’ exclusive use?

Not very much. [more…]

Now, the broadcasters are basically out of the picture, and the battle is shaping up more pointedly: the wireless carriers in the wireless association formerly known as Cellular Telecommunications and Internet Association, and the high-tech titans like Dell, Google, Microsoft, Philips, etc.

Let’s take a step back from the current debate, though.

All of these unlicensed wireless devices in common use today were largely illegal until significant changes were enacted by the Federal Communications Commission the mid-1980s.

While these policy measures unleashing unlicensed have remained largely in the shadows, they’ll be the subject of a half-day conference at the Information Economy Project, at George Mason University School of Law, on Friday, April 4. More information is available at http://iep.gmu.edu.

Continue reading →

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“Spectrum Talk” blog

by on April 1, 2008 · 1 comment

If you are an tech uber-geek with a particular affinity for spectrum policy, then you need to be reading the Spectrum Talk blog written by Michael Marcus. Anyone who has closely followed spectrum policy and FCC wireless regulation over the past quarter century will recognize Mike’s name because that’s how long he spent at the FCC covering this stuff. He’s covered spectrum policy from just every angle imaginable, and luckily he can now tell it like it is since he retired from the Commission a few years ago to engage in private consulting and writing. So make sure to check out his blog.

Note: Mike is also speaking this Friday at what looks to be a terrific conference on “The Genesis of Unlicensed Wireless Policy” organized by Tom Hazlett of George Mason University Law School. You can contact our own Drew Clark if you are interested in reserving a seat at: iep.gmu@gmail.com

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