TR Daily O’Rielly Bemoans Spectrum Policy Agendas of Other Governments
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Thursday, September 13, 2018

O’Rielly Bemoans Spectrum Policy Agendas of Other Governments

LOS ANGELES — FCC Commissioner Mike O’Rielly today criticized the spectrum policy agendas of some other governments, saying that some use them for “ulterior motives.”

In the text of a keynote speech this afternoon at the Mobile World Congress Americas, Mr. O’Rielly raised “whether the apparatuses setting spectrum policy can or should be used for ulterior motives. In other words, what happens when other governments, especially those built on far different models than the U.S., use spectrum policy bodies to advance their individual or collective geo-political interests, sometimes at the expense of spectrum policy? What happens if such participation and coordination is not done to drive sound spectrum policy but to facilitate state-sponsored industrial policy in other fields? What happens if elected leadership positions are used as pedestals to stymy the political and economic interests of the U.S.?

“It should come as no surprise that I am a firm believer and defender of the structure of the U.S. government, which consists of a representative democracy with foundations and reliance on individual liberty and a free, capitalist marketplace,” Mr. O’Rielly added. “Sadly, my views are not universally held, as several nations actively engaged in spectrum policy have government systems based on the derivatives of the intellectually-broken and historically-failed communist state. I plan to have more to say on this in the coming months, but I think answers to these questions matter for the future of spectrum policy.”

Mr. O’Rielly also bemoaned the approach that some other countries take in licensing spectrum.

“Oftentimes, governments are tempted to design spectrum policy to meet other goals, such as maximizing revenues, increasing competition, achieving ubiquitous service, and promoting technological innovation. In doing so, decision makers can be swayed to make unwise spectrum decisions,” the Commissioner said. “More specifically, my international counterparts sometimes contemplate shorter license terms with re-auction at the term’s end, along with high opening bids, to maximize funds for their treasuries and provide a continuing revenue source. They also look to adjust market sizes and implement technology dictates in an attempt to promote ubiquitous service, innovation, and network upgrades. Further, they consider spectrum set asides and different auction structures to try to engineer competition.

“While perhaps well-intentioned, these conflicting goals, however, can have detrimental effects on the networks built and services eventually offered,” Mr. O’Rielly added. “For example, spectrum set asides and other approaches favoring certain participants, such as basing market sizes solely to help some participants while disadvantaging others, are unlikely to result in spectrum going to its best use and can delay or prohibit the provision of services. Re-auctioning spectrum at the end of a short license term will not lead to widespread deployments, network expansion to the unserved, technology upgrades, or innovation, which require vast expenditures and significant time to recoup costs. Mandating technologies for specific frequencies will keep a band frozen in time, also hindering future technology upgrades. And, I can go on, but most importantly many entities are unlikely to invest in needed spectrum under the wrong conditions and the consumer ultimately loses out in the end.”

“Generally, U.S. success, unlike those prior examples, has been grounded in policies designed to (1) make the spectrum attractive for all industry participants and uses, (2) put it to its highest value use, and (3) ensure that the certainty exists to foster the necessary environment to promote investment and deployment,” Mr. O’Rielly said. “We start with our firmly grounded belief in flexible use, allowing those interested to choose the best use for the spectrum and the ability to evolve and upgrade networks and technologies as they see fit. Our license design doubles down on flexibility, by utilizing geographic areas of sufficient size to enable myriad technologies and offerings, including fixed and mobile, private or commercial, foreseen or yet to be developed; with terms long enough – ten years or more – to allow for actual deployments, including wide area networks and those dedicated to discrete area; with renewability to facilitate the requisite network expenditures without fear of investment being stranded; with performance requirements as safeguards to ensure that licenses are put into use. The Commission then uses the ultimate free market mechanism to assign these licenses: simultaneous, multi-round auctions.”

Mr. O’Rielly said that some countries “not only have different approaches to licensing and auction mechanisms, but these differences also extend to macro issues, such as global harmonization and standards setting for various spectrum bands. So, what does this mean for the organizations that serve to bring nations together to discuss diverging views, develop rational global spectrum policy, and prevent harmful outcomes? Here I speak not only of the International Telecommunication Union – the ITU for aficionados – but also of the many standard setting bodies, such as 3GPP, IEEE, [WinnForum], the TIA standard setting panels, and others, as well as the more informal negotiations that occur almost every day among nations.”

“For years, we have relied on our international spectrum organizations to bring coherence, agreement, and forward-looking thinking to the many diverging spectrum approaches and views for the goal of producing global spectrum harmonization. But this structure – at both the formal and informal levels – is fraying, sufficiently becoming a major impediment for those nations, like the United States, that need significant spectrum allocation changes to reflect the dynamic wireless marketplace for commercial services,” Mr. O’Rielly said.

“In the case of the ITU, it faces a bevy of real issues, which I have talked about a couple times and expanded upon in a recent op-ed. From mission creep and bureaucratic overreach to basic ineffectiveness and blatant cronyism, many of the charges are fairly well known and yet little is being done to correct them,” the Commissioner added. “My fundamental concern with the ITU, however, is that its leadership has not been prepared or willing to take the necessary steps to focus directly on spectrum issues and, when necessary, challenge those member states trying to stop progress on spectrum policy. Nations that are leading the world in technological advances should demand more in terms of spectrum reallocations to prepare for future wireless services in the one-, five-, ten- and twenty-year timeframes. It is unacceptable to allow specific nations or regions to block spectrum progress when it’s done not to preserve national security or prevent harmful interference, but to further the parochial goals of the objectors, like protecting the financial balance sheets of domestic incumbents or enabling a nation’s companies to compete — or even dominate — internationally.

“For the private sector standard-setting bodies, we have seen attempts by nation states to try to influence and skew the elected leadership to favor the business interests of a specific domestic company or for purposes of causing harm to those headquartered in other countries, particularly the United States,” he said. “This shameful practice undermines the legitimacy of new standards and, if successful, could deter companies from participating and cooperating in the process. In the end, if the decisions of standard-setting bodies face questions of legitimacy and undue influence, then companies will simply walk away, which will further fracture the quest for greater spectrum harmonization.”

Mr. O’Rielly said that “it should be accepted that the United States and its private-sector companies expect that global spectrum policy forums will be used to reach proper and mutually beneficial outcomes. Any effort to use these processes as a direct assault on our nation or our companies will not be allowed to stand. We have options. There are a handful of nations that are quite clearly leading global wireless advancements and real capabilities are available to work outside the ITU or the existing standard setting bodies to further spectrum policy. It should never come to this, but preventing such a reality will require a direct improvement in the structural performance of international spectrum organizations and a check on bad practices.” —Paul Kirby, [email protected]

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