Liveblogging the Fun fun Fun at FCC at 700 Mhz Mtg

So here I am, watching all the motion in the backfield as the Commissioners trickle in following this morning’s delay.

For those who missed it, the meeting was scheduled to start at 10 a.m. Then got switched to 12:30 p.m. (Frankly, I didn’t mind, as I had not gotten a seat at 10 a.m. Real full house here today). When I got back at 12:30, I found Fred Campbell (chief of the wireless bureau) and some of the wireless staff already in the hearing room. A hopeful sign! Still, it has taken an additional hour to pull everyone together. Martin came in at about 1:10 or so, with the rest trickling in later. During the last half hour, I could see various high-ranking staff dealing with the last minute details from whatever change got made this morning.

We’ve now started with three witnesses to describe the need for various features of the Order. We have two public safety guys and Jason Devitt — CEO of Skydeck and supporter of both wholesale open access and device open access.

Having outside witnesses at an open Commission meeting called for the purposes of voting on an agenda item is highly unusual. Martin has done this on occassion before for very significant and potentially controversial items (the ones that come to mind are the meeting where they voted to require VOIP providers to provide 911 services, the Katrina follow up, and the 2006 cable competition inquiry (which took place in Keller, TX).

So what’s going on here? More below . . . .

My feeling is that Martin is feeling the heat on a variety of fronts from his own party particularly. Witness statements on the necessity of FCC action help blunt the criticism that Martin is being reckless by doing the public/private partnership or impossing device open access on the C Block. It looks pretty stupid to have your quote that this is not necessary when Police Chief Public Safety Guy is saying “we gotta have this — God bless Kevin Martin and the FCC.”

In this context, Jason Devitt is an interesting choice. While he clearly supports what Martin is doing, he also wants the FCC to go further. The again, that’s part of Martin’s point. “Look,” Martin can say. “I am not being a tool for Google or Silicon Valley. The Silicon Valley guys want me to go much further. I’m striking a balance here.”

Anyway, on with the show . . . .

Devitt is well spoken and passionate, emphasizing the critical difference between wireline and wireless is that you don’t need permission (yet) to innovate on wireline. Devitt thanks Martin for his “bold initiative” that will release a “tsunami of innovation.” But concerned that many ways for incumbents to work around these rules. Much better to do mandatory wholesale that would “open the network, not just the devices.”

As an aside, Devitt led with “my first choice would be to dismantle the whole regulatory system and move to open spectrum and software defined radios, my second is that we could go on creating electromagnetic spectrum indefinitely, but I think each is equally unlikely.”

Martin has followed up with some questions, giving Devitt a greater opportunity to make his case and show his wit. For example, he just had a nice screed about how incumbents jack up the cost of ring tones “on a note for note basis, the most expensive music in history.” Devitt also dismissed concerns about protecting the network, describing the real life objections he and others have met as being anticompetitive in nature, not technological.

So now Martin tosses the ball to the public safety guys to ask why not do this on pub safety. Response is that risk averse because lives are on the line.

Martin then prepared to pass the ball back to the FCC Secretary, but the other Commissioners jumped in. Copps gave a polite thanks for them to be here. Adelstein described how his brother was evacuated from the Pentagon on 9/11, and stressed the responsibility to solve the interoperability issue.

Adelstein also gave Devitt another bite at the wholesale apple, asking him to explain why mandatory wholesale would be a good thing. Go Adelstein! Devitt, happy to seize the chance, now goes into detail on how wholesale open access would translate into instant benefits for consumers by bringing in new providers with different business models. In particular, it would invite someone to come in with a “bare bones” wireless connection that would put the functionality at the edge.

Huh! They deleted the roaming item!

Public safety part first: modify band plan to consolidate narrowband in one place, shift guard bands, and shift everyone down to address interference issues with Canada.

Adopt the proposal for a single, national broadband network (no surprise). Adopt the “D Block” plan of partnership with national D block licensee. D block gets preemptible access to public safety and vice versa. Pretty much Frontline proposal without the open access. No surprises. The importance is in the details, which give public safety licensee a fair amount of say over the D Block licensee compliance with critical aspects of the D Block licensee’s obligations. Public safety can also build on their own if D Block taking too long. D Block required to deploy to 99% of country (may be 93%, might have misheard).

OK, on to Fred Campbell and the Commercial side. No surprises, they go with the Martin plan: 22 MHz C Block, device open access, no wholesale.

Modest surprise in modifying the 700 MHz band to create more smaller licenses. I’m going to have to look at this when the FCC publishes it, because there is a camera right in front of the TV screen and I can’t hold this in my head.

Geographic buildout for EA and CMA, pop based for REAGs. More on this in my post meeting analysis later.

Adopt anonymous bidding without any precondition or test! Huzzah! This is a major, major win.

Adopt package bidding for REAGs (no surprise).

Finally, the Commission finds that Google’s proposed “real time auction” fits existing rules, but the Commission declines to mandate such an approach.

Did not catch anything on DE credits. Clearly we didn’t get our incumbent exclusions or spectrum caps.

Copps Statement

First, state would prefer government to just build pub safety network. Not getting that, need this partnership. Pledge ongoing FCC oversight and recognize that this presents difficult and complex challenges. If license doesn’t sell at auction, or if pub safety and D Block can’t strike a deal, then FCC will “go back to drawing board.”

Copps gives big shout out to Wu and his paper! Pleased to see how an “academic” paper has changed wireless policy globally . (TIm Wu! You Rock!) Also praise for Markey and heavy Dem oversight of FCC to make wireless Carterfone happen. Praise for wireless open access (devices). Warns that consumers and developers need a process for complaints (included in order). 180 day “shot clock” for decisions. Praise Chairman for leadership.

OK, now on to disappointment that not go for wholesale. Copps gives a passionate defense for wholesale that recapitulates the points made by PISC and others for why wholesale is justified and beneficial.

Praise build out requirements, but would have supported Adelstein’s proposal for going further to “triggered use or lose.”

Conclude with fear that requirement to have reserve prices on every block (which is new) will reduce chance of getting a new entrant. Apparently, if the reserve is not met, the FCC will reduce the build out requirement. Copps fears this encourages gaming by incumbents to reacution with no conditions.

Copps thanks many, including public interest and consumer groups for making this “more consumer and democracy friendly.”

Adelstein Statement

Adesltein praise Chairman for consensus leadership and for willingness to challenge status quo. Magnitude of proceeding and willingness to push beyond the safety of status quo. Sorry it does not include everything we wanted or even all protections Adelstein suggested. But the Order provides a way to move forward and unleash wireless innovation and new approach. “Meaningful, but not perfect effort to create a useful open access environment.” Must have commitment to future enforcement to make this real.

Maximize not “third pipe,” but innovation in delivery of information. A “third channel” that is not necessarily a duplicate of cable or DSL but new way to get broadband. This is why competition in cellular telephone is irrelevant. Need to get broadband competition, so needed to have wholesale.

Also think it was a mistake not to give DE credits for wholesale, and to link the consumer friendly terms to a big license. Would have preferred more smaller licenses. Not like reserve price/reauction. Wish they’d adopted his “triggered use or lose”. May have missed opportunity to create “third channel.”

Thank consumer groups that “made more progress than even they may have thought possible.”

Tate Statement

First, appreciate Chairman’s personal illnesses and tribulations and sacrifice needed to keep this on track.

That said, while this Order really sucks, it isn’t totally worthless and we are out of time to get this done. So while I think device connection is bogus and application freedom is even more bogus, I need to go along with the Order to get to the needed stuff on public safety and have the auction.

Care about the rural deployment. Applaud smaller geographic areas and strict build out requirements. Make clear limits on device attachment rules. Potential benefits and risks in freeing application. Stress need to protect network. Seems to think that this is necessary to ensure E911 operation. (I’m sorry, but this has all the hallmarks of a telco talking point.)

Much praise for existing wireless market and existing broadband market. Warn against unexpected negative consequences. Very clear that she does not like this Order. Lengthy list of what Order does not do with regard to existing networks. Wireless providers allowed to shut down “malicious or illegal applications” (man, the RIAA was in here too! (or AT&T, which amounts to the same thing these days)). That’s a clear invitation to shut down anything the carrier claims facilitates “piracy.”

McDowell Statement

Like public safety. The rest sucks. Regulation just absolutely sucks. So while we all want device portability, the majority should have gone with “fostering industry consensus” rather than “rushing to regulate.” [HF: Oh God! More worship of the competition fairy, who brings competition to the true believers but is scared away by regulation.]

Criticize the large license block and “encumbrances” on spectrum. No one will show up, large bidders will squeeze out small bidders, and everyone will hate y’all forever. And you know it, because you are setting reserve prices. And all this is unnecessary, because the market is moving there anyway. Silly regulators who have no faith — don’t you see the stampede to the freedom to connect and open wireless networks the competition fairy was already bringing? Now your evil regulation will scare her off, because you have set the Demon of Regulation loose upon us all! But when the Competition Rapture comes, we, the pure, the true believers, the Deregulators, will be taken up into the competition Nirvana while you regulators of little faith will be Left Behind in the Hell of High Prices and Command and Control.

Oh yeah, and the whole history of how Carterfone revolutionized wireline offerings is completely inapplicable. And Europe isn’t so wonderful anyway. Oh my fellow Republicans, cast out the evil counsels of the Democrats, let the scales fall from you eyes, and beg the forgiveness of the blessed competition fairy! She will return if we deregulate, for she is a kind and forgiving competition fairy, who only asks that we unquestioningly deregulate and believe.

I therefore dissent. Praise the Competition Fairy!

[OK, this is some liberal interpretation on my part. But it amounted to the same thing, really.]

Martin Statement

Interestingly, Martin would also have preferred a pure public safety network, but won’t get that built so need public/private partnership.

General statement that need to address both public safety and commercial wireless in new ways. Defends device open access. Device attachments did good things in wireline. Burden on licensee to show that compliance reasonable. [That is significant.]

Not do wholesale because afraid will deter investment. Believe has hit best compromise that serves “no company’s interest, but the public interest.”

Will post better analysis later when I’ve seen the Order.

Stay tuned . . . .

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2 Comments

  1. bj says:

    Thanks for the wrap up, I’m looking forward to your in depth interpretation. It looks like we did get a few wins we didn’t expect.

    Love your “liberal interpretation”, btw. One can only hope that the individual in question reads it . . .

  2. Harold says:

    Actually, I rather hope he doesn’t. 🙂

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