Congress should reserve the right to protect our wireless future

From Erik Telford
Wireless technology is great. Only a few years ago, most Kansans were using their phones to call, and perhaps even text, now mobile devices are essentially small computers in the palms of our hands — capable of almost anything.

According to Nielsen research, about 44 percent of U.S. mobile subscribers now own smartphones.[i] In Kansas, there are more than 2.4 million wireless subscribers[ii] and nearly 450,000 of those subscribers have data plans with full Internet access for more than 1 million high-speed mobile devices as of December 2009.[iii]

With mobile devices capable of almost anything, Kansans are finding more ways to use them — from uploading pictures during a concert at the Sprint Center to updating their Facebook status about K-State’s football team to checking into their favorite Wichita restaurant on Foursquare.

However, in what is becoming an all too familiar occurrence, some of these efforts are unsuccessful because we just can’t seem to connect online in a stadium or arena full of people. This is just one localized example of how the looming spectrum crisis could become a widespread reality — crippling innovation and investment in one of our country’s most vibrant sectors.

Thankfully, Congress is currently considering legislation that would help avoid the looming crisis by freeing up more spectrum through an auction process. Spectrum auctions are widely supported by both Republicans and Democrats; however, as with most things — the devil is in the details.

As the agency in charge of spectrum auctions, the FCC is pressuring Congress to give the FCC complete control over the auction design process. While the FCC’s request seems somewhat innocuous, if allowed, it could have dangerous consequences.

Recent actions by the FCC suggest it would use its power to limit which companies will get to participate in the auction, effectively determining the winners and losers.

Some members of Congress, support the FCC’s request and argue that proposals that would restrict the FCC from imposing eligibility conditions on auction participants “could have a deterring effect on fostering competition and maximizing auction proceeds to pay for a public safety network and deficit reduction.”[iv] The argument that fewer auction participants would result in more competition and more revenue, however, just doesn’t make sense.

The FCC’s desire to impose conditions to increase competition and encourage innovation is not only counterintuitive; it is unnecessary. As the FCC’s own data demonstrates, the wireless market is already fiercely competitive. Nearly 90 percent of Americans have a choice of five or more wireless providers.[v]

In, Kansas, consumers in communities both large and small have a number of options for wireless services. Consumers in Salina and in Wichita can choose from six or more wireless providers.[vi] In Garden City, subscribers can choose from seven or more wireless companies.[vii]

Furthermore, eligibility restrictions could prevent companies like Sprint, Verizon and AT&T from acquiring more spectrum, which could prevent them from deploying 4G service to other communities outside the Kansas City market due to spectrum constraints.

As the expert agency, the FCC is right to ask for some flexibility with the auction design process. Congress, however, should reserve its right to protect our wireless future by preventing FCC overreach and ensure that all companies can participate in the auction process. It’s only the fair choice to make.

Notes:
[i] Nielsen Wire, “Android and iPhones Dominating App Downloads in the U.S.” November 29, 2011
[ii] Federal Communications Commission, 15th Annual Mobile Wireless Competition Report, Table C-2: FCC’s Semi-Annual Local Telephone Competition Data Collection: Mobile Telephone Subscribership, in Thousands,” p. 248, June 27, 2011
[iii] Federal Communications Commission, 15th Annual Mobile Wireless Competition Report, Table C-5: Mobile Wireless Devices Capable of Sending or Receiving Data at Speeds Above 200 kbps and Subscribers with Data Plans for Full Internet Access as of December 31, 2009, in Thousands,” p. 260, June 27, 2011
[iv] Sen. John Kerry, Press Release, “Democratic and Republican Senators Urge Smart, Inclusive Spectrum Reform,” January 9, 2012
[v] Federal Communications Commission, 15th Annual Mobile Wireless Competition Report, “Estimated Mobile Wireless Voice Coverage by Census Block, 2010,” p. 6, June 27, 2011
[vi] Cell phone provider coverage as found by zip code on http://www.wirelessadvisor.com/
[vii] Cell phone provider coverage as found by zip code on http://www.wirelessadvisor.com/

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