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Spiwak: Mixed Signals on Spectrum Call Into Question FCC Agenda

Without question, Americans love their smartphones and tablets. However, our rapidly rising demand for mobile data has exhausted the capacity to supply it. Without more spectrum in the hands of mobile carriers, service quality will suffer and prices will rise.

Many are looking for leadership from the nation’s expert agency, but the Federal Communications Commission can’t make up its mind on how best to solve the problem, or apparently whether there really is a problem at all.

On one hand, the FCC has made spectrum exhaust a central policy priority. FCC Chairman Julius Genachowski cautioned that “Without action, demand for spectrum will soon outstrip supply. ... If we don’t tackle the spectrum crunch now, network congestion will grow, and consumer frustration will grow with it.”

On the other hand, it appears that the commission is doing everything in its power to make sure certain firms, i.e., those that provide service to the vast majority of Americans, can’t acquire much-needed additional spectrum in the open market to improve their services. This policy schizophrenia casts serious doubt on the overall integrity of the agency’s deliberative process and on its purported “expertise.”

The first sign of trouble came in 2010 when the FCC approved the merger of the firm that is now known as LightSquared. The agency’s approval came with a curious “voluntary” (aka “mandatory”) commitment — LightSquared agreed that it would not resell any spectrum to the two largest commercial carriers without prior FCC approval.

Given that LightSquared’s stated business plan is to provide wholesale capacity to retail carriers, this seems odd indeed. More troubling is the fact that this “voluntary” commitment was negotiated and adopted behind closed doors on the day the order was released, so that the public had no ability for notice and comment. As a result, some lawmakers are questioning the FCC’s perceived lack of transparency related to this proceeding.

Which brings us to the AT&T/T-Mobile case. Right before Thanksgiving, Genachowski announced that the commission’s staff found that the merger would not serve the public interest and, as such, he would set the merger for administrative hearing after the antitrust case was resolved. This led AT&T to withdraw its petition and, in response, the petulant FCC to release its staff report for all to see. While space constraints prevent a detailed examination here, there are three major problems with the way the agency conducted itself.

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