CTIA Invokes the Great Satan
The cellular industry has reacted with great indignity over just the notion of the government selling off some spectrum to be dedicated for free wireless broadband service. The industry's mouthpiece - the CTIA - insists that if the FCC is going to auction off more spectrum, it should be to the highest bidder who can use the airwaves as it jolly well pleases. The CTIA's wireless knickers are all knotted up over FCC Chairman Kevin Martin's recent proposal to condition a new spectrum auction on the winner offering a free tier of broadband service. Advertising and fee-based faster tiers would presumably otherwise support the network. Heresy, cried the CTIA, invoking the great Satan of government regulation. "The public interest is best advanced by the Commission's long-standing flexible-use spectrum policy, which provides spectrum licensees the freedom to innovate and respond to consumer demands," the CTIA said in an FCC filing. The wireless carriers absolutely revel in the notion that their industry has been built with a minimum of government regulation. The CTIA is the lead tub-thumper of free enterprise and free markets determining winners and losers in the wireless space. This is the same industry that warehouses spectrum to shut out potential competitors and imposes two-year contracts on consumers with early termination fees. The industry loves closed networks and locked handsets. And let us not forget it was the wireless industry that came up with cramming, adding unauthorized, expensive services to a user's telephone bill. Last I read, consumers demanded none of this. The carriers, meanwhile, are backstroking through seas of cash that are driving a consolidation of the industry that works against consumers by creating fewer choices. The CTIA's latest snit over Martin's proposal overlooks one thing: Spectrum belongs to you and me as a public resource. The sale or lease of that spectrum does not necessarily mean selling it to the highest bidder to pad the federal coffers and suit wireless carriers. As the stewards (a term we use loosely in this case) of the spectrum, the FCC can actually act in the public interest. As the United States continues its free fall in global Internet standings, it doesn't seem a bad idea to consider new ideas. |
Comments (5)
If we really want free markets, the FCC should just get out of auctioning spectrum altogether. There is no fundimental technical reason today, that multiple competing uses can not occupy the same spectrum without interference or regulatory oversight.
The public interests is best advanced by returning the airwaves to its owner - the people, and letting anyone use it as they please. It is arguable that the FCC was never a good idea. But if they ever were, they are not now. If the CTIA, broadcasters, telco's etc. want to argue for free markets, then they should have to function in truly free markets, not the current regulated monopoly scheme.
Posted by Dave Lynch | June 6, 2008 4:04 PM
If the Government is not suppose to be in business, then why are they?
The people own the airways not the Government.
Posted by Martin | June 9, 2008 12:17 PM
The CTIA's member monopolists have proven time and again that they do not want to "innovate and respond to consumer demands". If they did, then handset features would not be disabled (why pay for something you can't use?). The iPhone would be available unlocked from any carrier in both CDMA and GSM flavors with 3G and Wi-Fi data capability. And I would be able to get replacement batteries for a phone which was more than six months old. Remember the kicking and screaming they did when they complained that letting users keep their cellphone number when they switched carriers -- or even handsets -- was technically infeasible?
It's not the FCC which should be in charge of dealing with the CTIA, but the antitrust division of the DOJ. Latest example: "unlimited" cellphone voice/text plan pricing. If Martin sticks to his guns, hopefully overseas carriers will enter the USA market and break the cartel. The CTIA has now and has always had absolutely no intention of advancing "the public interest". If it did, then the infrastructure would be owned and operated by an industry consortium regulated as a public utility, and outrageous and lucrative "roaming" fees would be gone.
Posted by Stratocaster | June 9, 2008 2:24 PM
All of the arguments made here have some merit.
However, there cannot be an environment of no regulation as proposed by one commenter. That condition would lead to anarchy where there'd be many different regionalized systems and no compatibility. Also, if my 1,000,000 watt transmitter stepped on every piece of electronics in your house, that'd be just too bad for you.
There are very real technical boundaries to using spectrum. Even now, with all of our sophisticated although narrowly focused technology, my microwave still interferes with my cordless phone and my phone causes problems with my wireless LAN.
Well-crafted regulations actually drive standards and standards broaden our choices because everyone's equipment works everywhere. Where there is no regulation, say DVD formats, there are still standards sometimes driven by technical excellence but mostly driven by perceived value. Sometimes, as in the case of BlueRay, the choice we have is driven by market dominance. Good or bad, it is what we get.
If we had an "industry consortium" regulated as a public utility instead of a free market, we'd have the old AT&T and rotary dial telephones instead of the situation we have now with many CLEC's and many choices for telephones. Also, even though the rates are regulated, we'd have higher rates than potentially free.
With regulation comes complacency by the provider. It is the exception rather than the rule that the consumer gets innovation in highly regulated markets.
As far as I know, most brands of telephones can be obtained unlocked either in the primary or secondary market. There are many choices that, as far as I can see, are at least as good as the over-hyped iPhone.
Further, anyone can now get very good service at a decent price on a pay-as-you-go basis which makes the service accessible to pretty much everyone with cash including those too young to sign a contract.
Auctioning spectrum serves an important purpose by making the barrier to entry into the market such that the spectrum is put to use for the benefit of the public quickly.
Otherwise, if the spectrum was given away as in some free-to-participate lottery, it would either land in the hands of those unable to do anything with it or it would be sold to the highest bidder for billions that would make a single person rich.
While the system isn't exactly perfect, it is also far from broken. So far, it has yielded a technologically robust system that is improving. While systems in other countries are somewhat more advanced, those systems have generally sprung up in countries that did not have a lot of established momentum in an established system. Therefore, there was little economic impact with regard to premature obsolescence.
Change will come as it always does. Until then, we'll just have to muddle along with the robust and cost-effective system we have.
Posted by Barry Williams | June 10, 2008 6:57 PM
Rule of thumb would seem to be, if the phrase "freedom to innovate" comes up, run do not walk, to put on your chastity belt.
Posted by billy bathgates | June 25, 2008 1:19 PM