Phillip Dampier: "Where is the actual innovation in The Spectrum Innovation Act?"

Republican members of the Subcommittee on Communications and Technology on spectrum issues have circulated a draft bill — The Spectrum Innovation Act — which is breathtaking when you finish reading it.  For the first time I can recall, the United States Congress is proposing a way for business to bypass telecommunications laws by buying their way out.  The proposed bill would allow big spectrum holders like wireless phone companies, broadcasters, and others warehousing unused spectrum to win a “get out of regulation free”-card just by buying and selling the public airwaves.

A hearing on spectrum issues is scheduled for this Friday, and it promises to be fascinating if only to hear the reasoning behind Congress proposing to throw their own authority to the wind.

The bill’s contents are appalling for a variety of reasons:

• Public airwaves remain a private commodity that companies can buy, sell, or trade, with the not-so-fringe benefit of winning deregulation or being granted a legal free pass to ignore laws still in effect for others;
• The purchase of spectrum under this bill could allow wireless carriers to avoid even the pretense of today’s watered-down Net Neutrality policies;
• Unlicensed white space/spectrum which could be used for innovative new wireless applications could instead become warehoused by private companies for their own use (or more likely to keep others from using it.)

Harold Feld, legal director of Public Knowledge, says the impact of the House measure should not be underestimated.

Feld

“Until now, communications law has never been publicly put up for sale,” Feld said.  “This draft bill would do that by allowing broadcasters to choose which rules they will follow and which rules they won’t if they sell their broadcast spectrum at auction.”

That is distressing enough, but the implications for wireless innovation are in peril if this bill ever becomes law, according to Feld.

“The innovation and experimentation we have seen through the use of unlicensed spectrum would screech to a grinding halt,” Feld believes. “Rather than have the FCC decide how much spectrum would be used for unlicensed uses, the draft bill would require a collective bid for unlicensed spectrum higher than bids for licensed uses.  Given that unlicensed uses like Wi-Fi come from small and new companies, the future of new uses would be very bleak.”

Feld points to several provisions in the bill to prove his points:

• Pages 18-19, line 19 (regulatory relief). If you are broadcast licensee, instead of taking money from an incentive auction for repacking or moving to a different spectrum band, you can ask FCC for a waiver of any commission rule or any provision of law.

• Pages 28-29, line 8 (administration of auctions).  If someone buys a license at auction, the spectrum is exempt from even the weak Net Neutrality rules that have been approved to guard against basic anticompetitive activity in wireless service such as barring competitive services.

• Page 29, line 3.  Prohibits spectrum cap, and also eliminates the ability of  the Commission to favor small business and minority, women-owned businesses in auctions.

• Page 26, line 10. Unlicensed spectrum is subject to auction.  A block of spectrum would be put up for auction, with bidders specifying whether use would be for licensed or unlicensed use.  Unlicensed has to be higher for bid to be accepted.

• Page 30 (section begins).  Gives public safety spectrum to the states, without an auction, with a nebulous plan and some unspecified grant money to coordinate the public safety network.

He’s more than proved the point.

While such legislation would no doubt be celebrated by incumbent providers to reinforce the status quo — their status quo — it is a nightmare for everyone else — another piece of irony from some Republican lawmakers who name their bills the diametric opposite of their end effect.  We can’t think of a better way to crush innovation and destroy the potential of competition by granting today’s players deregulation and easy access to unlicensed spectrum.  It’s as oxymoronic as a level playing field in the Rocky Mountains.  That’s why we need some actual innovation in The Spectrum Innovation Act.

Time Warner Cable just fought a battle in the state of North Carolina to keep public tax dollars from being spent on community-owned broadband networks, but the company has no objection to accepting corporate welfare for itself.

Charlotte’s News & Observer this week reports the nation’s second largest cable company will win $3 million in state incentives if it meets hiring and investment goals. The city of Charlotte is also providing $2 million of its own incentives.  That’s $5 million dollars from the pockets of North Carolina taxpayers.

Corporate welfare

For that, Time Warner Cable is promising to add 225 jobs and build a data center to deal with anticipated broadband growth in the area.  That’s $22,222 per job.

N&O notes this is the third handout the cable company has gotten from the state government since 2004 — all in return for committed expansion in Charlotte.  The newest grant requires Time Warner to retain at least 1,113 jobs in the Charlotte area.  The state government is apparently willing to help pay for the cable company to not lay off its workers, but is all for smothering much-needed competition from community providers, which it stepped on in a big way earlier this year.

Ironically, the corporate-backed groups that loudly oppose taxpayer funding for broadband and critics of community networks are mysteriously silent over $5 million in public funds being directly transferred to a multi-billion dollar cable corporation.

Pentefountas

Stop the Cap! is following this week’s extensive hearings into Internet Overcharging in Canada by the Canadian Radio-television and Telecommunications Commission (CRTC).  The debate into Bell’s attempt to mandate usage-based billing for -every- provider in Canada, regardless of whether they are owned or operated by Bell, reached a new level of absurdity this morning when a Conservative appointee to the CRTC, Tom Pentefountas — the vice-chairman of the commission — asked this question to an astonished panel headed by Openmedia.ca, a consumer group fighting usage-based billing:

“What is so undemocratic about allowing a few companies to control the Internet?”

Pentefountas was openly hostile at times against Openmedia, questioning their membership, their funding, and whether they had a “self-interest” in the fight.  They do — consumers, a concept that evidently escapes the very Big Telecom-friendly new commissioner, appointed by the government of Stephen Harper.

Yesterday, much of the hearing was focused on Bell’s defense of UBB, and we noted Mirko Bibic’s increasing discomfort as the Bell lobbyist came under increasing scrutiny and hard questioning that he never experienced during earlier hearings (those that led to the CRTC’s approval of UBB).  Now that the public (and higher government officials) are watching and listening, what used to be a non-confrontational experience is today sounding increasingly skeptical of the arguments for UBB by many commissioners.

We’ll have audio archives of the hearings available here when they are published online.  They help build the record of carrier arguments for UBB, independent findings which call out those arguments, and the opposition to UBB and why flat rate broadband is important to the knowledge-based economy of North America.

There will be hurdles to overcome, starting with confronting the attitudes of commissioners like Mr. Pentefountas, who evidently does not understand the implications of a few corporate entities controlling Canada’s Internet.

Follow live coverage of the CRTC hearings here.

The state of California is in receipt of a letter from AT&T objecting to a state workshop on the AT&T/T-Mobile merger that included 70 minutes for a panel of academic experts to share their views of one of the state’s largest wireless mergers in years.

J. David Tate, AT&T’s general attorney and associate general counsel, sent the letter in response to news California regulators would open the workshop to a presentation from academics about the impact the merger would have on California consumers, ranging from competition to roaming access to spectrum issues.

Tate called that inappropriate and asked the California Public Utilities Commission to ban their testimony:

“AT&T is raising objections to the panel because having a panel of ‘academic experts’ present at this workshop will pose significant risk of tainting the record with potentially uninformed and biased opinions. These opinions do not constitute the facts upon which the transaction should be reviewed.

“[…] Allowing academicians with unknown expertise in the wireless telecom industry the opportunity to place on the record their personal opinions regarding AT&T’s planned purchase of T-Mobile USA is procedurally improper, unfairly prejudicial to the parties, and contrary to due process principles.”

Instead of allowing those outside of the industry to present their views on the merger, AT&T suggested the best solution would be to allot the 70 minutes originally given to the academics to AT&T (and the three remaining panels AT&T does not object to) instead.

Digging into the reality of community broadband – the New Rules Project compares the broadband prices and speeds of community networks to incumbent providers, using examples from North Carolina that are representative of modern community fiber networks. Incumbent providers including AT&T, Comcast, and Time Warner Cable want to outlaw these networks even as many, including the Federal Communications Commission, recognize the clear benefits of allowing communities to decide locally whether such an investment makes sense.  What is your broadband service like?  Would you trade your ISP for one of these community fiber providers?  (3 minutes)