Wireless Telecommunications

I’m sure that those that love to regulate will try to make the weak case that the status of the wireless industry occurred because of — and not despite — the Federal Communications Commission’s regulations, particularly our Net Neutrality burdens. Beyond being desperate to validate their myopic decision, this argument completely ignores the counterfactual, or what would have occurred absent such burdens. The reality is that had the Commission rejected the liberal mantra of Net Neutrality, the entire wireless picture could have been even better.

In the wake of the devastating and deadly California wildfires, Sens Dianne Feinstein (D-CA) and Kamala Harris (D-CA) have written the Federal Communications Commission with their concerns that wireless emergency alerts (WEAs) lack potentially lifesaving precise geotargeting, and are urging the FCC to implement that requirement ASAP.

The FCC in 2016 proposed rules, which FCC Chairman Ajit Pai voted for as a commissioner, that would require wireless carriers to provide precise geotargeting of WEA warnings, but Sens Feinstein and Harris wrote Pai that they were disappointed the FCC has never voted a final order, and that it provided "a temporary waiver of the existing, imprecise geotargeting requirements for certain carriers." They ask if the chairman intends to proceed with the rulemaking and if so, will he do it expeditiously, and if not, why not. They also want to know whether the FCC has gotten feedback from emergency services in Northern California about whether the WEA system is meeting their needs, referring to news stories that suggested it was not, and whether it has sought the same info from hurricane-it areas.

Gov Jerry Brown (D-CA) vetoed a bill that would have streamlined policies for small-cell deployments, handing CTIA - The Wireless Association and major wireless carriers a significant defeat in the nation’s most populous state. The bill, SB 649, essentially would have given wireless companies the same rights as public utilities. It would have enabled carriers and infrastructure vendors to place transmitters in public rights-of-way and capped fees cities could charge to install their devices.

The bill had become a top priority for CTIA, which claimed it would boost California’s economy and pave the way for faster network speeds, better coverage and increased capacity. But it was opposed by some 300 California cities, dozens of counties more than 100 local organizations. “There is something of real value in having a process that results in extending this innovative technology rapidly and efficiently,” Gov Brown said. “Nevertheless, I believe that the interest which localities have in managing rights of way requires a more balanced solution than the one achieved in this bill.”

[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.