Wireless Telecommunications

[Commentary] As nearly all usable radio spectrum has been allocated to particular uses and assigned to particular users, shifting spectrum toward modern uses almost certainly requires taking from one use or user to give to other uses and users. Such spectrum repurposing need not be contentious and is often successful. The recent $41 billion AWS-3 spectrum auction, the largest-grossing auction in history, involved spectrum repurposed from Federal government incumbents to mobile wireless providers. Yet, success is not guaranteed.

Spectrum, like land, is typically “zoned” to particular uses that play nice together. For instance, a relatively low-powered satellite signal might be drowned in a sea of high-powered, land-based cellular signals. Like small and big dogs being kept separate at a dog park, different types of radio signals are managed to mitigate conflict using technical means such as power limitations and boundaries between interfering frequencies or assigning users and uses varying degrees of priority. Before one can reassign satellite spectrum to terrestrial wireless broadband use, therefore, one must seek permission from the FCC: terrestrial services are prone to interfering with satellite signals, so an approval requires a demonstration that interference with others is not a problem.

[Dr. George S. Ford is Chief Economist of the Phoenix Center for Advanced Legal & Economic Public Policy Studies]

In 2014, Sprint tried to buy T-Mobile in a deal that ultimately fell apart under scrutiny by the Justice Department and the Federal Communications Commission. Regulators at the time concluded that having four major competitors in the cellular space, not three, would do the most to preserve competition and help consumers. Analysts say that a new agreement between the two companies would likely hand the reins to T-Mobile, which overtook Sprint in 2015 as the nation's third-biggest carrier. Given that T-Mobile was behind the push for many of the industry changes we've seen in recent years, it's possible that T-Mobile could do a lot with Sprint if it led the company. But many of the underlying issues — such as what happens to competition in a world of three national providers — remain.

As recently as last week, staff members at the Justice Department were said to be skeptical of a Sprint/T-Mobile deal. One argument you can expect to hear, analysts say, is that building out the next generation of wireless data — known as "5G” — will be fairly expensive and that it would be cheaper for everyone involved if T-Mobile and Sprint could join forces and build a single 5G network rather than build two of them separately. Another argument you might hear is that Sprint, whose business is weakening, simply can't survive alone and that by teaming up with T-Mobile, the combined company could more effectively compete with AT&T and Verizon.

Apparently, T-Mobile US and Sprint plan to announce a merger agreement without any immediate asset sales, as they seek to preserve as much of their spectrum holdings and cost synergies as they can before regulators ask for concessions. While it is common for companies not to unveil divestitures during merger announcements, T-Mobile’s and Sprint’s approach shows that the companies plan to enter what could be challenging negotiations with U.S. antitrust and telecommunications regulators without having made prior concessions.

It was reported recently that some of the Justice Department’s antitrust staff were skeptical about the deal, which would combine the third and fourth largest U.S. wireless carriers. However, regulators can only begin reviewing a corporate merger once it has been agreed to and announced. T-Mobile and Sprint are preparing a negotiating strategy to tackle demands from regulators regarding asset sales, including the divestment of some of their spectrum licenses after their deal is announced, apparently.

The vast majority (96%) of rural young people age 14 to 22 years old have cellphones, including 17% who get mobile service from a local provider and 75% who get service from a national carrier, according to a rural youth technology survey conducted by the Foundation for Rural Service. Nearly the same amount (95%) have internet connectivity at home, and a substantial portion of them get connectivity from a local provider. Just under one in three respondents get internet connectivity from a satellite provider. That 95% number is considerably higher than overall home internet take rates that other surveys have found, underscoring how much more important the internet is for households that include teens and young adults.

The survey also included questions about how rural youth use technology — information that could become increasingly valuable as those young people become technology decision makers. About two-thirds of respondents to the FRS survey would consider living in a rural area soon after graduation.

[Commentary] Frontier's recent revelation that it intends to use fixed wireless to address the rural broadband availability problem using the second phase of the Federal Communications Commission’s Connect America Fund (CAF-II) program is set on a simple goal: extend broadband to areas where deploying wireline facilities is prohibitive. What’s interesting about Frontier is that other than being a supplier of backhaul, the company is mainly a wireline carrier.

Can it effectively overcome engineering and regulatory challenges to complement rural wireline broadband with wireless? There’s both regulatory and technical challenges. Putting aside these challenges, it's hard to not to see the benefits wireless broadband could bring for rural providers. These telcos can use a complementary approach to address remote areas that are still difficult to address even with CAF-II funding today.

Masayoshi Son is taking another run at his dream to create a US mobile phone heavyweight, but a revived deal would be scrutinized by many of the same officials who batted down his last attempt. Staff attorneys inside the Justice Department’s antitrust division are likely to view any plans to merge his Sprint with T-Mobile US as a threat to competition in the mobile market, according to three people familiar with the staff’s thinking.

If they recommend to sue to block the deal, that would leave it to President Donald Trump’s new antitrust chief, Makan Delrahim, to decide whether to fight the tie-up, or overrule them and approve it. If he decides to oppose a deal, the Justice Department would file a lawsuit in federal court seeking to block the proposed tie-up and would need to persuade a judge that the combination is anticompetitive. The antitrust chief isn’t obligated to follow the staff’s position, but typically has. Delrahim, who was confirmed to his post at the antitrust division Sept. 27, hasn’t commented publicly on how he views the mobile market.

As the Chairman of the Federal Communications Commission, I have a special interest in the progress that was made in communications and technology policy during the Reagan Administration. It was an executive order signed by President Reagan that first made the Pentagon’s Global Positioning (GPS) system available for civilian use. FCC Chairmen who served during the Reagan Administration were incredible leaders and visionaries. Mark Fowler and Dennis Patrick each did a fantastic job leading the agency. They moved aggressively to eliminate unnecessary rules and implement President Reagan’s deregulatory philosophy. They set a high bar for those who came after them—and I strive for that bar every day.

The Reagan FCC eliminated the so-called Fairness Doctrine. This misnamed government dictate suppressed the discussion of controversial issues on our nation’s airwaves and was an affront to the First Amendment. The Reagan FCC also built the political foundation for auctioning licenses to spectrum—a free-market innovation blasted back then and widely accepted today. The Reagan FCC introduced “price cap” regulation, reducing government’s role in micromanaging profits and increasing consumer welfare. And the Reagan FCC set the stage for much of the innovation that we see today. In 1985, for example, it had the foresight to set aside what were generally thought to be “junk” airwaves for anybody to use—what we call “unlicensed” spectrum. And entrepreneurs put it to work. Thanks to the FCC’s vision, we now use unlicensed services every day, every time we access Wi-Fi or use Bluetooth or check a baby monitor. Consider this 1985 quote from Mark Fowler, President Reagan’s first FCC Chairman—a quote that applies today: “We want to eliminate, as much as we can, government regulation of the telecommunications marketplace so as to permit present players to provide new and innovative services to consumers and likewise permit new players to come in and compete.” That’s basically our approach today.

The Federal Communications Commission recently asked for input on whether wireless is now a substitute for wired broadband. The Communications Workers of America says a definitive "no," and has offered up a report in an effort to back up the assertion. That came in comments to the FCC. In its comments, CWA said its "expert report," from CTC Technology & Energy, found that mobile was not an adequate substitute, but was and would remain a complement to faster and more robust wired broadband.

The Federal Communications Commission has granted an experimental license for Project Loon, led by Google's parent company Alphabet, to help provide emergency cellular service in Puerto Rico.

“More than two weeks after Hurricane Maria struck, millions of Puerto Ricans are still without access to much-needed communications services,” said FCC Chairman Ajit Pai. “That’s why we need to take innovative approaches to help restore connectivity on the island. Project Loon is one such approach. It could help provide the people of Puerto Rico with access to cellular service to connect with loved ones and access life-saving information. I’m glad the FCC was able to grant this experimental license with dispatch and I urge wireless carriers to cooperate with Project Loon to maximize this effort’s chances of success.” Project Loon is a network of balloons that provides connectivity to users on the ground. Now that the experimental license has been approved, it will attempt to initiate service in Puerto Rico. Project Loon obtained consent agreements to use land mobile radio (LMR) radio spectrum in the 900 MHz band from existing carriers operating within Puerto Rico.

Over 30 Democratic Members of Congress sent a bicameral letter to Federal Communications Commission Chairman Ajit Pai opposing his efforts to lower broadband Internet standards for millions of Americans. The letter comes in response to a recent Notice of Inquiry that suggested the FCC will consider significantly lowering national advanced broadband standards from the current level of 25 Mbps download / 3 Mbps upload down to 10 Mbps download / 1 Mbps upload.

“As you well know, reliable, high-speed broadband is essential to economic development, public safety, and a vibrant quality of life. Ensuring every home, school, and business has adequate access to the Internet is essential to unlocking the innovative potential of all Americans,” wrote the lawmakers. “Simply moving the goalposts is not a policy solution, and weakening the definition of high speed internet is a disservice to the rural and tribal communities the FCC has an obligation to serve.” “At this time, mobile access at 10 Mbps download/1 Mbps upload is not a reasonable replacement for fixed advanced broadband at home. This fact is well known to any child seeking to complete a homework assignment, small business owner hoping to develop an Internet presence, or individual completing an online job application or communicating with their doctor.”