Handicapping New America’s Spectrum Auctions Event

Thursday the 21st, the New America Foundation’s Wireless Future Project is holding a policy forum on the question of spectrum caps in the upcoming (next year or the year after) spectrum incentive auction. This is a topic that’s been much discussed, so I’d like to save you some time by telling you what the participants are likely to say. I’ll follow up after the event with scores for my predictions and highlights of any new arguments, if there are any.

Moderator Michael Calabrese will not only introduce the folks, he’ll make a pitch for reserving 30 MHz in the 600 MHz TV band for unlicensed use by White Space networks, which he will describe as “Super Wi-Fi” networks. He won’t bat an eye over the fact that White Spaces are supposed to be chunks of spectrum that would otherwise go to waste or over the fact that “Wi-Fi” is a registered trademark of the Wi-Fi Alliance, an organization that does not approve of the use of “Super Wi-Fi” to describe anything other than 802.11 LANs. Here’s what the Wi-Fi Alliance has said:

Consumers should be aware that recently-announced deployments using terms like “Super Wi-Fi” are not in fact Wi-Fi®.

• The technology touted as “Super Wi-Fi” does not interoperate with the billions of Wi-Fi devices in use today

• Today’s deployments in Television White Spaces do not deliver the same user experience as is available in Wi-Fi hotspots and home networks

• Wi-Fi is a registered trademark of the Wi-Fi Alliance and the term “Super Wi-Fi” is not an authorized extension of the brand

• Wi-Fi Alliance discourages the use of Wi-Fi in a manner that could confuse consumers

That should be clear enough. Since the statement was issued, the IEEE 802.11 Standards Committee has all-but-approved a White Spaces standard, but it’s not Wi-Fi interoperable, despite incorporating some elements of the Wi-Fi protocol (such as contention and frame aggregation) that aren’t appropriate in a Wide Area Network setting.

Rep. Anna Eshoo will echo Calabrese on Super Wi-Fi and tout the benefits of unlicensed. She’s likely to describe the TV band as a beach front that will open up new vistas for innovation, just like Wi-Fi did. She won’t address the fact that Wi-Fi and Bluetooth only work because their signals cover a very limited geographic scope.

Sen. Jerry Moran will stress the importance of extending the unlicensed regime into the TV band, because doing so will enable companies to innovate, add jobs, grow the economy, increase competition, and extend broadband service to rural areas.

Tom Power, Deputy CTO for Telecommunications, The White House (OSTP), will tout the PCAST Report’s recommendation that commercial firms share spectrum with government agencies as a secondary tenant. He’s likely to say that the President wants more spectrum for both licensed and unlicensed use, even in the TV Band where nobody knows what to do with unlicensed over long distances. He’s also likely to say that the FCC will make appropriate rules on open bidding and defer from directly answering the question of who should be allowed to bid on TV Band spectrum licenses.  He’ll also make some humorous comments, so he’ll probably be the star of the show. With any luck, an astute inside-the-beltway audience member will ask what he learned while tending bar during the government shutdown.

Reed Hundt, former FCC Chairman, will warn about the dangers of allowing the most successful wireless companies to increase their spectrum holdings in order to serve their customers better. He may fall back on the FCC’s market-by-market spectrum screens rather than insist on the pre-emptive prohibitions on more licenses for the Big Two that some folks want, but I doubt it. He’s also going to tout the importance of unlicensed spectrum and remind the folks that he “was the guy who created the idea of unlicensed spectrum,” so naturally he wants more of it. He won’t address the fact that wide area unlicensed use is a whole different ballgame from Wi-Fi.

Hon. Chip Pickering, currently a partner with a lobbying firm that works for rural cellular providers and formerly the Vice Chairman of the House Energy & Commerce Committee, will tout the importance of spectrum caps to lower the price his clients will have to pay for spectrum licenses. Expect something like this: “Functioning, free, competitive markets give us greater growth, greater investment, greater innovation, greater consumer benefits, and they cause our economy to grow much more than monopoly telecom markets.”

Lawrence Krevor, V.P. for Legal and Government Affairs, Sprint, will most likely accuse AT&T and Verizon of being abusive monopolists, stress the importance of competition in wireless markets, ask for FCC action to Special Access to reduce his firm’s backhaul costs, and strongly advocate for pre-emptive caps or special bidding credits for Sprint, T-Mobile, and anyone smaller. He won’t say how much Sprint has paid for spectrum licenses in the past, but he will say the Big Two “already have more licensed spectrum than they know what to do with.”

Joan Marsh, V.P. for Federal Regulatory Affairs, AT&T, is harder to predict. I suspect she’ll argue that her firm and Verizon have achieved their market share by investing more in their networks and devices than the other firms have, so it would be counter-productive to penalize them for doing the things policy makers generally want to encourage. AT&T has a way of saying surprising things at gatherings like this one, so I expect her to say something AT&T hasn’t said before.

Eric Graham, Senior V.P. for Strategic Relations, C-Spire, will ask for spectrum caps on the Big Two so that we can have more competition and innovation. His remarks will be indistinguishable from Pickering’s.

Matt Wood, Policy Director, Free Press, will denounce the Big Two as harmful monopolists who want to buy spectrum licenses in the TV Band simply to prevent the Little Good Guys from getting access to them. He’s going to say the Big Two only want to warehouse the spectrum and he’s going to insist they’ve done this before. He wants to say that the TV Bands should go more to unlicensed than licensed, but if they have to go licensed for political reasons they should go to little guys like Republic Wireless.

Fred Campbell, Director, Communications Law & Innovation Project, Competitive Enterprise Institute, will tout the revenue gain to the treasury from open bidding, underscore the price of FirstNet, and stress the fact that the heavy investors shouldn’t be penalized.

Mark Cooper, Research Director, Consumer Federation of America, is sure to mention the bad old days of the pre-breakup AT&T monopoly, and to deliver a message like this: “It would be a huge mistake to try to pick winners and losers by favoring cellular licensed service to the exclusion of unlicensed spectrum.” He’ll say that unlicensed has proved to be more valuable to consumers and more efficient than licensed, and he’ll express thinly veiled contempt for licensed operators.

George Ford, Chief Economist, Phoenix Center will probably deliver an economic analysis of the revenue potential of an open auction, but his math will go over the heads of his fellow panelists. It’s brave of NAF to invite him, because his analysis of unlicensed and hobbled auctions is the polar opposite of NAF’s desires.

Peter Cramton, Professor of Economics, University of Maryland, will get down into the weeds of auction design and describe his preference for “the combinatorial clock auction―which has been adopted by the UK and many other countries, which addresses many of the problems of the simultaneous ascending auction while building on its strengths.” This will go over the heads of the audience even more than Ford’s remarks will.

The panel is diverse, so don’t let this score card prevent you from going. Better yet, make these predictions into a drinking game and watch the webcast. That’s what I’m going to do.