Recent events in the wireless industry underscore the disconnect between regulatory processes that lag far behind the technology and business decisions they are supposed to guide. This gap is apparent in the government’s views on the D-Block auction, the so-called “spectrum screen” and even the inner workings of the FCC.
Although the inspector general found nothing illegal regarding the D-Block debacle, I’ve got to say there are still some pretty disappointing revelations in the IG report.
Some of the things that made me scratch my head:
- It seems the FCC ultimately approved stringent rules intended to help first responders that probably would have led to a great public-safety system, but which ultimately scared off potential bidders because the rules were so one-sided.
- The entire set-up whereby Cyren Call, at least according to perspective D-Block bidders, would be an MVNO for public-safety users. Why would a commercial carrier go into business where it could only make money from the commercial side of the business, and have to deal with Cyren Call and Public Safety Spectrum Trust on the public-safety side of the business, and pay them to lease the spectrum they paid for at auction? Commercial carriers have proven extremely capable of running complicated networks efficiently – all without so many middlemen.
- The bidding rules themselves were designed largely from public safety’s point of view. If a commercial carrier placed the top bid, that carrier still would not win the license until an agreement had been hammered out with PSST. If an agreement could not be reached, the top bidder would have to pay a penalty to return the license. Where’s the incentive to bid?
Other disconnects are taking place as we speak: the FCC allowed AT&T Mobility and Verizon Wireless to win much of the 700 MHz spectrum. Now some are complaining that the two carriers own too much spectrum. Even more disconnected is that the AWS spectrum is not included in this “spectrum screen” as it has yet to cleared nationwide. But once the AWS spectrum is cleared and counted, so what? Would it be prudent for the government to force these carriers to divest in markets where they supposedly own too much spectrum after that market it built out?
Now the FCC wants to get new D-Block rules out before the end of the year. Unless something significant changes take place, no one is going to bid a second time either.
