The Federal Communications Commission is getting ready to auction licenses to a particularly valuable chunk of the public airwaves.
Until recently, the sale of these spectrum licenses was shaping up to be like every other auction: The big carriers would pick off the best pieces, the small carriers would fight it out for the rest, and maybe one crazy new entrant would overbid, go bankrupt, and tie up a slice in court for years to come.
Then a few people started talking about "open access"--the idea that the wireless market should work more like the Internet. To everyone's surprise, FCC Chairman Kevin Martin appeared to be listening, and he made some modest proposals for the 700 MHz spectrum auction that would unlock devices and applications. This could allow you, for example, to buy any phone and use it on the new network.
Now the backlash has begun. The well-paid lobbyists of the incumbent carriers tell us that open access is corporate welfare for Google, a vast left-wing conspiracy, and an attack on property rights. I'm not buying it.
The 700 MHz auction represents the last chance for a generation to carve out a small piece of spectrum--a sandbox--and manage it.
I'm one of those who wish the wireless market were more like the Internet: lightly regulated, zero barriers to entry, and relentless competition. But the freewheeling Internet would not exist if it weren't for strict regulations in the underlying telecommunications market. Those rules made sure the phone companies couldn't prevent us from attaching modems to their networks or interfere with the traffic that ran across them.
The wireless market is nothing like that. Why can't you buy a phone that works across Verizon, Sprint, AT&T and T-Mobile? They use different frequency bands and different technologies, but it's easy to build a phone that works across all of them, and it needn't be very expensive. The problem is that you would need the permission of each carrier to use the phone on their network. Good luck with that.
I can't connect a device to their networks without their permission, and I can't run an application on one of their phones without their permission. But I can't just tell them to go to hell and start my own network, because there's not enough spectrum to go around.
Open-access rules would go a long way toward fixing these problems. With open access, I could connect any device to the network and run any application. And if that wasn't good enough, I could rent capacity from an "open-access" licensee at wholesale prices. The business model for that licensee would be to sell capacity to guys like me--triggering market forces that generate competition. More competition, of course, means more choices and lower prices for consumers.
The telecommunications lobbyists say none of this is necessary. They point out that the market for wireless voice is highly competitive--prices have fallen from 43 cents per minute to 7 cents per minute in the past 10 years alone. But one reason that the market for voice is so competitive is that in 1993 smart regulators banned the incumbents altogether from a major auction to guarantee new entrants. (Hey, maybe we should try that again?)
More importantly, this auction is not about voice--it's about data. And competition for wireless data and applications is a lot less healthy than competition for voice. Why can your kids buy a song online for 99 cents, but a little clip of music for a ringtone costs up to $3? Why do games that are free online cost $3 per month or more on your cell phone? Why do you have to pay anything for text messages when you're already paying $20 per month or more for an "unlimited" data plan?
It's 2007. If I'm willing to pay for the device and the bandwidth, why can't I get all the same stuff on my phone that I can get on my PC? There's only one explanation: a handful of carriers decide what devices and applications we get, when we get them, and how much they will cost.
The telecommunications lobbyists say they want a "fair" auction with no strings attached. Of course they do. In an auction without conditions, the incumbents have huge advantages. They already have "sticks in the air"--a network of cell towers--so they can build out another network faster and cheaper than a new entrant could. And if they let a new entrant in, they could lose some of their customers and be forced to lower prices to keep the rest.
For these two reasons, the incumbents can afford to bid more for spectrum than any rational new entrant. In fact, rational companies will opt out of the auction altogether, lowering the potential revenue to the Treasury--exactly the opposite of what the telecommunications lobbyists would have us believe.
The 700 MHz auction represents the last chance for a generation to carve out a small piece of spectrum--a sandbox--and manage it like the free and open Internet. I believe that thousands of entrepreneurs would use the opportunity to launch innovative new wireless devices and services, create new jobs, and gain back the lead in mobile technology that America has ceded to Europe and Asia.
If not, you may as well dig out your old black rotary phone, because Ma Bell is back.
Biography Jason Devitt is the CEO of Skydeck. He will testify Tuesday at an FCC hearing on the auction of the 700 MHz spectrum on behalf of the Wireless Founders Coalition for Innovation.
In addition to allocating some of this spectrum for public safety, why no also allocate some some free spectrum space for the use in public education?
Why do the wireless carriers have to keep adding more bricks to their "walled gardens"?? Our poor students can NOT afford $2o-60 per month extra for broadband access!
I am in favor of lower prices for consumers, heck, I am one. And yes, some of these carriers do gouge you. But before we start comparing the internet to the wireless arena, remember that most of the "telcom" infrastructure was already in place and already paid for; the internet was gravy. Wireless is "new" and require significant investments. Why should I as a carrier, having paid the price, be now forced to sell my bandwidth to a competitor at a discounted price? You want to compete, build your own infrastructure, then compete. Can't pay, Don't play!
We America, need to move away from the "free" mentality, it will be the ruin of us all. We want everything free or cheap and wonder why decent paying jobs are so hard to come by.
Gee, I sure wouldn't want the folks that built that infrastructure to go broke. I mean they did it all on their own without any tax-breaks from us or making any money off of us. I'm sure if it were the other way arround and we needed something from them they'd be all to happy to provide it to us out of their own pockets.
In india we pay less that $20 for reasonable amount of usage and there is no plan less than $39.99 without a 2 year contract here. Data plans here are prohibitive. No provider has pay as you go data plans. So much for consumer choice.
I wrote a letter to my Congressional delegation prior to the 700 Mhz spectrum decision and I wanted to point out how important Open Access is:
The FCC is about to set the auction on the 700 MHZ frequencies also known as "White Space". These are the frequencies made available by consolidating TV over the air channels.
As you may remember, from previous letters, I own the largest Wireless Internet Provider based in my community and my growth is solely due to the FCC allowing us access to the 900Mhz, 2.4Ghz and 5.8Ghz among other higher frequencies. The intent was to satisfy the President and the FCC's desire to expand High Speed Internet to the rural areas. We still provide service to numerous areas that the Telco's and Cable industry are not interested in any rural areas. The Telecom giants love to claim how they want Internet for everyone they have had 30 years to prove it and still they don?t care. They want high density subscription not sparse rural expenses.
It goes back to the old saying 'If the Telecom Act wasn't passed we never would have had the Internet because AT&T would never allow something they couldn't control and solely benefit from'. Open frequencies benefit everyone and provide for more individual innovation such as multiple vendors selling security systems, phones, Internet, etc..
The original intent was to have 700 MHZ. classified "Open Access" to allow uses that are now limited in range and vegetation penetration due to the higher frequency limitations. Google is trying to bribe the FCC to have exclusive use of the 700 MHZ range by promising a huge amount in advance of bidding, AT&T and Verizon among others are threatening to sue so you can see how valuable this range is.
I'm not a high paid lobbyist for the Telecom industry but I represent the true spirit of this country, an individual small business owner who has a successful niche. The well-paid lobbyists of the incumbent carriers tell us that open access is corporate welfare for Google, a vast left-wing conspiracy, and an attack on property rights. It's all spin on them trying to lock up frequencies so open access doesn't allow Americans more options.
I just wanted to make sure you were aware these arguments are all false and its the gradual return to market monopoly that is the real threat to an America that is already far behind our Asian and European counterparts. I just ask that you keep your eyes on this one and make sure the FCC doesn?t lose sight of who they serve, it?s not corporate America its individual Americans and the innovation we are capable of providing.
Now that the auction has been submitted make sure you read Commissioner Tate's comments. It's like she has no clue what she is talking about but she kept going on and on.
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This is about our country's future as a technology leader! You are squarely on the right side of the debate!
Why do the wireless carriers have to keep adding more bricks to their "walled gardens"?? Our poor students can NOT afford $2o-60 per month extra for broadband access!
You want to compete, build your own infrastructure, then compete. Can't pay, Don't play!
We America, need to move away from the "free" mentality, it will be the ruin of us all. We want everything free or cheap and wonder why decent paying jobs are so hard to come by.
The FCC is about to set the auction on the 700 MHZ frequencies also known as "White Space". These are the frequencies made available by consolidating TV over the air channels.
As you may remember, from previous letters, I own the largest Wireless Internet Provider based in my community and my growth is solely due to the FCC allowing us access to the 900Mhz, 2.4Ghz and 5.8Ghz among other higher frequencies. The intent was to satisfy the President and the FCC's desire to expand High Speed Internet to the rural areas. We still provide service to numerous areas that the Telco's and Cable industry are not interested in any rural areas. The Telecom giants love to claim how they want Internet for everyone they have had 30 years to prove it and still they don?t care. They want high density subscription not sparse rural expenses.
It goes back to the old saying 'If the Telecom Act wasn't passed we never would have had the Internet because AT&T would never allow something they couldn't control and solely benefit from'. Open frequencies benefit everyone and provide for more individual innovation such as multiple vendors selling security systems, phones, Internet, etc..
The original intent was to have 700 MHZ. classified "Open Access" to allow uses that are now limited in range and vegetation penetration due to the higher frequency limitations. Google is trying to bribe the FCC to have exclusive use of the 700 MHZ range by promising a huge amount in advance of bidding, AT&T and Verizon among others are threatening to sue so you can see how valuable this range is.
I'm not a high paid lobbyist for the Telecom industry but I represent the true spirit of this country, an individual small business owner who has a successful niche. The well-paid lobbyists of the incumbent carriers tell us that open access is corporate welfare for Google, a vast left-wing conspiracy, and an attack on property rights. It's all spin on them trying to lock up frequencies so open access doesn't allow Americans more options.
I just wanted to make sure you were aware these arguments are all false and its the gradual return to market monopoly that is the real threat to an America that is already far behind our Asian and European counterparts. I just ask that you keep your eyes on this one and make sure the FCC doesn?t lose sight of who they serve, it?s not corporate America its individual Americans and the innovation we are capable of providing.
Now that the auction has been submitted make sure you read Commissioner Tate's comments. It's like she has no clue what she is talking about but she kept going on and on.