Subject: [NEXTEL-1] The FCC's Market-Biased Approach

From: NEXTEL-1
Date: Mon, 19 Jul 2004 13:06:50 -0400

The FCC's Market-Biased Approach

Does Chairman Powell's claim to deliver a reorganized agency
"to promote a business oriented structure" at the FCC give greater
priority to corporate profit in spectrum management decisions?

Editor:

Chairman Powell's vision of regulation
can be summed up in two words: "task force."

The proliferation of blue-ribbon panels to deliberate the issues
of spectrum management is staggering. By creating strategic
partnerships with the largest affected licensees, the FCC is
building multiple bridges from its job of regulation to its new role
of expert observer and monitor. The general term used to describe
the commission's approach is "market-based." This poorly defined
phrase is repeated in decisions, speeches, and public notices and,
according to the politicians who employ it freely, it appears to mean
the effort to create public-private partnerships in regulation and
spectrum management, usually requiring a task force.

Although laudable by the CEO's of the largest broadband and wireline
entities whose agendas guide these task forces, the rest of us must
question whether we are included in that "market" upon which the
FCC's decisions are "based." Does Chairman Powell's claim to deliver
a reorganized agency "to promote a business-oriented structure" at the
FCC give greater priority to corporate profit in spectrum management
decisions? One must answer sadly, yes.

Recent illustrations of a market-based approach to the agency's duties
are numerous - the most reported being, of course, the 800 MHz issue.
The old, non-business-oriented commission might have simply stated
to the interfering carriers, "your operations are causing interference
to
public safety operations. Fix it." The new market-based FCC says, "let's

study it, consider the ramifications of enforcement, thrust our
moistened
fingers into the political winds, and devise a policy that emphasizes
commercial cooperation over the mandates of the Act."

Market-tested methods of running the business called the FCC include
continued reliance on auctions. Chairman Powell's rhetoric on this issue

also reveals his suggested status as CEO of the FCC. The chairman's
business plan to Congress promises that billions of dollars will be
raised
via auction of spectrum, thus justifying further Congress' increased
capitalization of Powell's multiplying task forces.

Even the status of "licensee" and the legal definition of that term has
been altered via the FCC's recent decisions on spectrum leasing. Now you
can
be a licensee in name, but with 90 percent of the responsibility for
compliance with the agency rules being assigned to the de facto operator

(a.k.a., the lessee). The primary responsibility assigned to licensees,
to
deliver telecommunications services to the public, is no longer an
unshared
responsibility, providing rewards for geographic licensees who chose not
to
invest in serving an entire major economic area (MEA) or major trading
area
(MTA).

Or, if you wish to join the fast paced world of Wi-Fi, the FCC will make

available additional unlicensed spectrum. The beauty of this
market-based
allocation is that it requires nothing from the FCC, as operation is
allowed without obligation, protection, or management other than the
vagaries of
propagation. And if your service is deemed an "information service"
employing the Internet, the FCC will bend over backwards to avoid
regulating your
use.

The false premise underlying the FCC's market-based approach is that it
assumes that the market is homogeneous and equal across all segments,
which is not true. Public safety entities take far longer to take
advantage
of newly available spectrurn and technology than all other sectors.
Industrial
communications licensees operate within a different business model than
broadband, commercial carriers. Land transportation entities require
different allocations than distribution centers or alarm companies or
utility companies. And rural systems operate with a totally different
dynamic than
urban systems.

Yet, some time over the past twenty years, the FCC got out of the
business
of spectrum management and enforcement, and into the business of
business.
True spectrum management involves the hard work of allocating and
reserving
spectrum for various segments' needs based on a logical timetable of
deployment and use. Yet, the FCC has eschewed the responsibility of
managing spectrum and, instead, has opted for allowing the largest
commercial
entities to do so, following corporate profit rather than public
interest. This is
truly the present definition of a "market-based" approach to regulation.

The greatest victims of the market-based approach are rural entities. To

gloss over its failure to deliver high-speed Internet services to the
rural
consumer, the FCC offers broadband over power line (BPL) without regard
to the fact that
introduction may be electromagnetically hazardous and likely will only
be
deployed in urban markets where the investment can be justified.
Buildout
requirements associated with geographic licensing do not include take
backs in
underserved rural areas. And rural operators who might be willing to
deliver services
to less populated regions are prevented from obtaining licensing due to
an
inability to compete economically in spectrum auctions or Congressional
lobbying.

The problem with the FCC being run like a business is that it makes
everything negotiable and for sale, including physics, facts, and law. A
market-based
approach suggests that the market, as defined by the largest entities
and in the
broadest of terms, will participate in government in a manner that
obliterates the line
between regulator and those regulated. Ultimately, the roles become one
of buyer
and seller, turning the offices of government into bazaar stalls for
dickering over the
price of a choice spectrum melon.

For all of the speeches about indecency that arose after Janet Jackson
gave
proof of her gender, none of the stumping focused on what is perhaps the
greatest
indecency - the conversion of the agency from a respected legislative
body
into abreeding ground for task forces that study the most efficient
means to
deliver corporate and federal profits.

Robert Schwaninger
Schwaninger & Associates
Washington, D.C.

Source: MissionCritical Communications Magazine
July 2004 Page 14-16 http://www.mccmag.com

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