by publius
It appears that the FCC’s spectrum auction decision is coming out tomorrow. Here’s a brief preview of some things to consider. I’ll obviously have more to say after the decision comes down.
First, some of the most important industry issues that the Commission will formally decide tomorrow aren’t getting much attention. Open access and Google are sexy beasts and all, but the real action is largely elsewhere. Issues like the public safety communications network, spectrum block size, scope of license, and small entity auction credits are arguably more important to the industry than a watered-down open access requirement.
The headlines, though, have focused on open access and (swoon) Google. We don’t know exactly what’s been decided, but you should be skeptical of the supposed “open access” requirements that Chairman Martin has apparently adopted. Most obviously, the two companies that theoretically have the most to lose from open access – Verizon and AT&T – have come out in tentative support of Martin’s proposal. That should send off big loud Drudge-like sirens in your head.
The devil here is in the details, but there are a few possible forms that a toothless open access requirement could take. First, the “open access” proposal will apply only to one piece of the spectrum and not to the entire spectrum holdings of a given company. Wireless companies use different spectrum frequencies to bring you service. For instance, when you use national carriers’ networks, you don’t notice it but your service can jump around from, say, 800 MHz to 1950 MHz. Thus, the open access spectrum is only one small part of the frequency national carriers’ customers use. So, keep an eye out for disclaimers in the FCC decision saying that open access doesn’t apply for carriers with additional spectrum holdings because it would screw up their network. (Or more generally, look for some provision that allows owning other spectrum to water down the open access requirement)
A second possibility is that the big boys realized that device open access in the wireless world doesn’t get you very far without some form of net neutrality. For instance, the Post reported:
In a last-minute policy shift, Verizon Wireless said yesterday that it would support a plan requiring a portion of airwaves to be available to any wireless device. But the company that builds the network on those airwaves, Verizon said, shouldn't have to guarantee that all applications, such as games and videos, will work properly.
The whole point of buying certain wireless devices, though, is that you want to use certain applications. Thus, if you can block applications (e.g., VoIP, p2p), the device itself doesn’t matter as much. For all practical purposes, the walled garden will live on.
That’s a key difference between the open access of today and the Carterfone open access of yesteryear (1950s and 60s). Decades ago, allowing devices to be attached to the network (which is what the Carterfone/Hush-a-Phone decisions required) just meant you could buy your own phone. It didn’t mean you could access services or applications that are potential rivals to the services your phone company (e.g., VoIP). Even after Carterfone, you still bought phone service from AT&T -- you just got to attach a groovin’ Elvis phone if you wanted to.
Bottom line -- keep an eye out for kabuki. The most likely scenario is that the open access requirement will, Warner-like, accomplish nothing but defusing political pressure.
[UPDATE: Via Communications Daily, I found this letter (pdf) from Verizon to the FCC stating that they oppose open access after all. Verizon apparently only meant to say that if the Commission adopts device open access, it should not necessarily net neutrality-style open access. Hard to know whether this was just a miscommunication or some backtracking. (It was originally reported in the WSJ as coming from the CEO, but sometimes CEOs don't dive into the details. So, who knows.
For what it's worth, I thought it was odd for Verizon to support open access publicly because it all but confirms that the requirement does nothing. Verizon is generally far better at these little PR games (e.g., strategically claiming to lose while winning), so someone screwed up here.]
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