Category Archives: Spectrum News

Huffington Post review of “The Political Spectrum.”

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William Echikson, Contributor

Political Spectrum

07/04/2017 08:40 am ET Updated Jul 04, 2017

Few issues could seem more dry and technical than how to divide up radio spectrum, the electromagnetic waves through which radio, television and telecommunication signals pass. But that impression would be mistaken. As we learn from Thomas Hazlett, former chief economist with the US Federal Communications Commission, few issues could be more politicised or disputed.

Hazlett’s new book, The Political Spectrum: The Tumultuous Liberation of Wireless Technology, from Herbert Hoover to the Smartphone, tells a thrilling, roller-coaster tale of how US regulators often blocked progress at the behest of incumbents, delaying the implementation of FM radio and cable television. Hazlett also explains how recent reforms helped liberate the radio spectrum and generate explosive progress, ushering in the ‘smartphone revolution’, ubiquitous social media and the amazing wireless world.

The author recently visited Brussels and gave a talk at CEPS. Although his focus was on the US experience, his history is relevant today in Europe. The European Parliament is considering a new EU telco proposal that takes an important crack at reform. It lengthens the length of licenses to 25 years, which it hopes will be long enough to allow licensees to recoup investments in expensive new 5G connections.

But the EU reform is timid in encouraging continental-wide coordination on spectrum policy. By leaving national governments in control, Hazlett says Europe might fail to encourage telcos to invest in networks and end up behind the US in the race to install fast-speed mobile internet connections.

Spectrum policy always has been tricky. For more than a century, policymakers on both sides of the Atlantic have grappled with how to manage this valuable resource. Should they give it away? In his book (and his talk at CEPS), Hazlett detailed how, in the 1920s, the US Secretary of Commerce Herbert Hoover instituted a ‘priority in use’ policy, which allowed the first one who used the spectrum to keep it, free of charge.

Unfortunately, this created a series of vested interest holders. When a brilliant engineer, Edward Howard Armstrong, invented a new high-quality radio service called FM, existing AM license holders squashed it, keeping it off the market for two long decades. Later, the incumbent radio broadcasters slowed deployment of satellite radio. Meanwhile, incumbent television broadcasters blocked cable television and demanded giant sums to give up their broadcast frequencies, even as almost all of their viewers received their shows via cable or satellite. Hazlett, never one to mince words, describes the incumbent broadcasters – at least in the eyes of frustrated regulators – as “Dr Evil”.

In Europe, broadcasters have demanded giant sums to relinquish control of their spectrum. Another problem is government greed. In the first part of this century, Europe’s governments auctioned off spectrum, attracting huge prices that ended up starving investment.

Today, we seem to be learning from our historic errors. The US has managed to set up auctions that have freed spectrum at manageable (if still high) prices. During his talk in Brussels, Professor Hazlett celebrated the iphone’s tenth birthday. Without access to freed-up spectrum, he notes that Steve Job’s invention would not have had the opportunity to flourish.

How best then should we proceed? Hazlett proposes grandfathering existing licenses – allowing the broadcasters to keep their spectrum, while setting up new rules for future cases. Instead of specific spectrum auctions, case by case, he prefers that governments auction cheap new overlay rights which would give new entrants immediate access to vacant channels and to negotiate for the re-use of frequencies already in play.

Digital technology allows us to send much more data through a piece of spectrum today than it did in the past. Newcomers could take little bits of unused spectrum from existing licensees, particularly existing public sector licensees. Hazlett calls these “overlay rights” and describes them as “hunting licensees”.

It’s a fascinating proposal that Europe should consider. At the meeting at CEPS in Brussels last week, both European Commission spectrum chief Anthony Whelan and the chief mobile phone expert on spectrum Daniel Gueorguiev were present. I hope they were listening and can work together to free up the precious resource of our airwaves. Much of Europe’s technological future depends on their success.

Washington Post on “a remarkable new book by Clemson University economist Thomas Hazlett.”

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By Larry Downes

Broadband’s future is in the crosshairs of the FCC’s ‘political spectrum’

The Federal Communications Commission, once a sleepy regulatory backwater, has become a deeply political agency, governed less by the science of radio waves than by pressure from inside-the-Beltway groups. If nothing else, the decade-long debate over net neutrality, reignited this year by Chairman Ajit Pai’s proposal to undo a 2015 decision to turn Internet service providers into public utilities, makes that clear enough. TV comedians regularly weigh in, while paid protesters disrupt FCC meetings. Pai has even received racist death threats.

How did we get here? The answer, according to “The Political Spectrum” (Yale University Press 2017), a remarkable new book by Clemson University economist Thomas Hazlett, is that the agency began life with a political agenda, one that continues to override its technical experts.

Hazlett, a former child actor who served as the FCC’s chief economist in the early 1990s, knows where the bodies are buried. He tells a chilling story of an agency that has always been both more and less than it appears to be.

On the outside, the commission’s charter is simple: to oversee the assignment of increasingly valuable swaths of radio frequencies, “as the public interest, convenience, or necessity” requires. But throughout the FCC’s nearly 100-year history, there have always been more ominous motives behind the agency’s action — or, in many cases, inaction.

With the skill of a TV detective, Hazlett reveals how the undefined “public interest” standard has proven itself a potent and malleable political weapon. As new information technologies are invented — from radio and TV to cable, satellite, cellular and now broadband — the FCC has wielded its power both intentionally and recklessly to benefit a changing cast of favored industries, restricting competition and all but the most mainstream content.

The result early on was both scarce and homogenized over-the-air content, almost entirely lacking in news or public affairs programming. In 1961, FCC Chairman Newton Minow famously complained that over-the-air broadcasting had become “a vast wasteland.”

What Minow didn’t say, however, was that the barren media landscape was an environmental disaster entirely of the FCC’s own making, aided and abetted by politically connected broadcasters and their friends in Congress. (Sometimes they were one and the same. While a senator, for example, Lyndon B. Johnson was allowed to monopolize Austin’s radio and TV market in exchange for securing the FCC’s budget.)

And where the “public interest” is used to limit who gets a license, the agency also exaggerates claims of spectrum scarcity and invents vague “technical reasons” to justify denying or delaying by decades the introduction of competing new services and new applications.

Often, as Hazlett details, the delays are manufactured by favored incumbents, worried that their technologies will be rendered obsolete and the frequencies assigned to them reallocated for better uses. (To help ungrease the wheels, the Federal Communications Bar Association has more than 2,000 members, mostly in Washington.)

Wireless telephones, for example, were demonstrated as early as 1947 but were rejected by the FCC as a “luxury.” Cellular technology, which vastly increased the capacity of wireless, was ready for deployment by 1973, but had to wait another decade. Cable TV and satellite radio experienced similar delays.

This was nothing new, however. Engineered scarcity and the corresponding need to micromanage both content and technology has poisoned the FCC’s operations from the beginning, Hazlett says, starting with then-Commerce Secretary Herbert Hoover.

Hoover deviously orchestrated a breakdown in federal oversight of AM radio licenses in 1926, launching “chaos” in interference and channel-jumping that undid the previous decade of orderly expansion.

The only solution to the “anarchy in the ether” Hoover had created was, conveniently, comprehensive new legislation he previously had been unable to advance. Congress duly enacted the Radio Act of 1927, which created a new regulatory agency that canonized Hoover’s belief that spectrum was a unique and limited public good, licensed only to applicants who proved their willingness to bow to the ever-changing “public interest.”

The age of permissionless innovation in radio was over, along with hundreds of stations — many nonprofits — that were forced to shut down. From then on, innovators hoping to introduce new technologies first must plead their case to the FCC, often waiting decades.

If Hoover, Minow and their congressional co-conspirators are the villains of Hazlett’s tale, its hero is economist Ronald Coase, who argued outrageously in 1959 that airwaves should simply be auctioned to the highest bidder, letting consumers decide the best uses rather than well-intentioned (or not) regulators bestowing “free” licenses with political strings firmly attached.

Hoover was simply wrong: Spectrum was no different from any other critical resource a business needed — and no scarcer. And although the market was far from perfect, Coase argued, allowing regulators to micromanage spectrum under the cover of the opaque “public interest” was worse, introducing vast inefficiencies and unintended consequences. For one thing, unlike the market, there was no accountability when the regulators failed, which they did repeatedly.

It took the FCC 30 more years to hold its first auction, by which time Coase’s work had earned him a Nobel Prize. In the interim, the agency’s parade of disasters plodded depressingly along. Hazlett shows how the FCC serially delayed or destroyed AM radio, and then FM, VHF, UHF, cable, satellite radio, wireless phones, pagers, low-power FM radio, digital TV and satellite Internet — filling what Hazlett calls “the FCC’s start-up cemetery.”

That trend was partly reversed with the remarkable success of smartphones, starting with the 2007 introduction of Apple’s iPhone. As mobile call volumes exploded with better and cheaper technology, the FCC finally gave in to demand for mass market wireless telephones, making new frequencies available beginning in the early 1980s.

The public interest-based application process, however, proved unwieldy. Buried in mountains of paper it had invited, an overwhelmed FCC was forced to conduct simple license lotteries, resulting in immediate license transfers at enormous profit to lucky winners who had no intention of building anything.

Congress, finally seeing how much money it was leaving on the table, authorized the FCC to begin auctioning airwaves to the highest bidder in the early 1990s.

Thomas Hazlett: The Political Spectrum. Interview on Radio Free Hillsdale

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June 16, 2017

Listen to the interview here.