Letter to the Editor: Beyond the status quo

Dear Editor,
Every now and then the Federal Communications Commission has to do something very important. In the next two weeks this FCC has a chance to protect the homeland and ensure billions of dollars of benefits to consumers. Or if spun into confusion by the armies of wireless industry lobbyists-some public and many clandestine, pseudonymous, and furtive-it will make an infamous blunder. For this decision, as they say, the commissioners will earn their pay.
Frontline Wireless has proposed a market-based way to build at no cost to the taxpayer a national wireless broadband network for first responders to use. The next time we are faced with natural or unnatural calamity, when our firefighters and police gather from across the country they will be able to communicate with each other, saving lives and catching evildoers.
That same network will be funded by the retail service providers who can use it to give them national roaming coverage. That will let them compete with Verizon and AT&T.
To achieve these twin goals, the FCC needs to auction a tiny slice-just a sixth-of the last block of airwaves set for auction after more than a decade of sales of the public’s airwaves. Verizon wants to buy it all, warehousing and not using it, but denying it to competition. Frontline wants to buy enough to build a national network for public safety and use that same network for Verizon’s local and regional competitors to have national coverage. Verizon says the federal government should pay billions for a public-safety network; Frontline says consumers of its network will fund the public-safety portion of the network, saving taxpayers billions and saving who knows how many lives.
Frontline’s founding partners can get this job done: They have built wireless networks and were among the first innovators that gave rise to the Internet as we now know it. They include Mark Fowler, chairman of the FCC under President Reagan; renowned venture capitalists John Doerr and Ram Shriram; James Barksdale, former top executive at Fed Ex, McCaw Cellular. Frontline has been supported already by written statements from, among others, Sen. John McCain (R-Ariz.), Senate Commerce Committee Chairman Daniel Inouye (R-Hawaii), House Commerce Committee Chairman John Dingell (D-Mich.), Rep. Chip Pickering (R-Miss.) and Rep. Jane Harman (D-Cal.).
As Wanda McCarley, the president of the Association of Public Safety Communications Officials, testified to Congress, the partnership approach of the Frontline plan is the best available to build the public-safety network that America needs.
But since we are in Washington where powerful firms use surrogates to seek regulation protecting their interests, it is not surprising that alleged advisers to the incumbent wireless companies’ trade association, CTIA, would attack Frontline on this in A Washington Post column, June 27, 2007, (“Earmarked Airwaves” by Robert Hahn and Hal Singer). What is surprising is the amount of distortion, contumely, and misstatement contained in their article.
Openness: Hahn and Singer wrongly claim that Frontline wants the winner of this thin slice of spectrum to be barred from selling directly to end users. Instead, Frontline wants the winner to be obligated to sell to anyone, including end users, device makers and local and regional companies trying to compete against Verizon. It is Verizon who wants the winner to be ordered to sell to end users. Verizon also opposes any FCC rule requiring it to sell service to its rivals, because it wishes to foreclose competitors from access to the airwaves that it has spent two decades assembling into a great hoard of opportunity. Verizon would opt to warehouse spectrum rather than promote the kind of innovation and competition on the wireless Internet that has made the wireline Internet what it is today.
Competition: Hahn and Singer falsely assert that Frontline seeks to “bar all incumbent wireless carriers . from competing in the auction.” Instead, Frontline says only that the winner should have to respect the conditions on the license sought by Frontline. In fact, AT&T officials have recently been quoted as saying that they are considering pursuing a wholesale strategy with public-safety obligations in this 700 MHz spectrum. Clearly, AT&T sees potential opportunity where Hahn and Singer see a false hurdle to alternative business models.
Public Safety: Hahn and Singer say that Frontline wants the license winner “to meet public-safety demands.” In fact, Frontline asserts that the winner must negotiate with a public-safety trust to design its network in a manner reasonably compliant with the needs of public safety and to be bound by arbitration of any disputes.
Innovation: They also assert that the winner must “support any legal application that could be transmitted over the network,” so that it could not “[block] Internet phone calls” which “could even threaten the existence of low-cost wireless data plans.” Here they are right that Frontline thinks this one thin slice of spectrum, of all that has been sold, should be reserved for open communication of content, including software. However, it is nothing short of bizarre that this pro-user feature should be thought to threaten low-prices. Even in Washington, the last redoubt of convention, one would have thought that news of the good deals brought by the Internet might have been widespread.
Robust Auction: Hahn and Singer claim it is “obvious” that the Frontline plan would cause a “loss of revenue in the auction.” Not only it is not obvious, but actually the biggest risk to auction revenues is that Verizon will scare away all other bidders, pick up the spectrum for the price of a lobbyist’s lunch, stash the airwaves away, and never spend the $4 billion to $5 billion extra that Frontline estimates Verizon would have to pay to build a national wireless broadband network for public safety.
By contrast, if the FCC were to adopt the Frontline plan, there’s no limit (sadly for Frontline) to the number of bidders who could agree to meet these requirements and bid on the last chance to provide competition against the incumbents and serve the nation’s first responders who now pay far too much for far too poor communications service. AT&T, the nation’s second largest wireless carrier, has flagged its interest in bidding on spectrum with wholesale and public-safety requirements in this band.
Finally, and most egregiously, Hahn and Singer imply that Frontline would go bankrupt, would “wriggle free” of license restrictions, and would “grab a few golden eggs.” They assert that Frontline is backed by Google, which is another misstatement (sadly for Frontline), but the notion that the founders of Frontline are inexperienced businesspersons who somehow have figured out how to profit from their own forthcoming bankruptcy is a slur on the record of individuals who, among other things, have helped start and run firms that currently have a market capitalization of nearly $300 billion.
Past success is no guarantee of future performance, but asking for a chance to compete in an auction to serve both public safety and competition is neither irrational nor unlikely to produce benefits for the American people.
The one thing Hahn and Singer correctly state is that the FCC has the power and responsibility to give Americans a national public-safety network and a platform for open competition. So far more than 300,000 e-mails have asked them to vote for the open-access provisions proposed by Frontline, not to mention the strong bipartisan support mentioned above: whether that’s enough to overcome the army of lobbyists and lawyers on the payroll of the incumbents remains to be seen.
Reed Hundt was chairman of the Federal Communications Commission from 1993 to 1997. He is the Vice Chairman of Frontline Wireless.