The Wall Street Journal: How Politics Stalls Wireless Innovation

The FCC unveiled its National Broadband Plan in 2010—but couldn’t stick to it.

Thomas W. Hazlett

October 1, 2017

Broadband

The Federal Communications Commission received a homework assignment in 2009—and an extra $13 million for school supplies. Congress ordered the agency to write a “National Broadband Plan” to stimulate the economy. The report, issued in March 2010, focused on opening up dormant radio spectrum for new uses. Citing the tsunami of mobile data usage, the study set a goal: The FCC should set free another 300 megahertz of prime bandwidth, more than used by Verizon and AT&T combined, for wireless broadband by 2015. That move would juice competition, unleash innovation and expand networks coast-to-coast.

 

With time, the FCC’s program to move television band frequencies into mobile phone and data markets was scaled back and the timeline stretched out. Another big chunk of spectrum slated for mobile was undone. This continues a long, sad saga depriving the U.S. economy of the bandwidth to accommodate new technologies.

 

The story also involves satellite phone licenses in the FCC’s L Band, frequencies prime for cellular services but largely walled off for satellite links. Companies like Globalstar and TerreStar went bust operating these satellite networks. The most sensational failure, Iridium, was created by Motorola using technology from the Reagan era. The company spent $6.5 billion in the nine months following its 1998 launch. It seemed the only ones benefitting from this quarantine of airwaves were bankruptcy lawyers.

 

In 2004 the FCC moved to relax L-Band rules, permitting deployment of a terrestrial mobile network. Satellite calls would continue, but few were being made, and sharing frequencies with cellular devices made eminent sense. By 2010, L-Band licensee LightSquared was ready to build a state-of-the-art 4G network, and the FCC announced that the 40 MHz bandwidth would become available. LightSquared quickly spent about $4 billion of its planned $14 billion infrastructure rollout. Americans would soon enjoy a fifth nationwide wireless choice.

 

But in 2012 the FCC yanked LightSquared’s licenses. Various interests, from commercial airlines to the Pentagon, complained that freeing up the L Band could cause interference with Global Positioning System devices, since they are tuned to adjacent frequencies. Yet cheap remedies—such as a gradual roll-out of new services while existing networks improved reception with better radio chips—were available. In reality, the costliest spectrum conflicts emanate from overprotecting old services at the expense of the new. With its licenses snatched away, LightSquared instantly plunged into bankruptcy.

 

Five years on, the company has recapitalized and re-emerged with a new name, Ligado. It has hired deft policy players and is making deals to mitigate conflicts. Notably, it has lowered the power of its emissions and has volunteered to leave its frequencies neighboring the GPS band quiet. To offset this capacity loss, it seeks to gain access to other spectrum now set aside for sparsely used and easily replaced applications. Ligado has asked the FCC to sell those rights to the highest bidder.

 

Yet regulatory impediments continue to block progress. Years after the L-Band spectrum was slated for productive use in 4G, it lies fallow—now delaying upgrades to 5G.

 

To use radio spectrum, parties must stay in their lanes. Ligado, to enter the market, seeks to control spillovers. Three major GPS makers—Deere, Garmin and Trimble—reached “co-existence agreements” with Ligado when it agreed to reduce its emission levels. But thousands of parties use the GPS band, which has no owner or band manager, and complaints can be raised by virtually anyone. Fending them off has become a game of Whac-A-Mole. Even if the reality is that new services deliver vastly improved mobile broadband at little risk to existing radios, regulators are frozen.

 

This familiar impasse in the political spectrum begs for correction. The FCC should let Ligadouse satellite licenses for cellular services. It should also permit competitors, includingLigado, to bid for new L-Band spectrum rights. Remaining border disputes should be consigned to binding arbitration, not allowed to sandbag progress in open-ended skirmishing. This would move radio spectrum out of oblivion and into the mobile broadband networks craved by consumers, innovators and the U.S. economy. Just like the National Broadband Plan called for in 2010.

 

Mr. Hazlett, a professor of economics at Clemson and former chief economist of the FCC (1991-92), is author of “The Political Spectrum: The Tumultuous Liberation of Wireless Technology, From Herbert Hoover to the Smartphone” (Yale, 2017).

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