Auction spectrum for consumer use; lease spectrum for private mobile radio networks
On Sept. 4, 1996, FCC chairman Reed Hundt spoke to the Royal Institute of International Affairs in London. In his speech, he listed seven principles that may give some insight into regulatory policies. Two groups that have been adversely affected by FCC regulation in recent years include private mobile radio service providers, as well as commercial mobile radio service providers that offer specialized mobile radio (SMR) service. If you are in one of these groups, take heed.
A printed copy of the speech takes 15 single-spaced typewritten pages, enough to fill many magazine pages, so only a few excerpts that may be representative can be included here.
Chairman Hundt: These seven principles reflect the most important insight I’ve garnered from three years at the FCC: Study with scrupulous exactitude all telcom policies of historical tradition and then do the exact opposite. Examine all received wisdom and declare it to be myth. Listen to all assertions of fact and suspect they are fictions. And get yourself a good economist; then do what he or she says.
1. If a country has a single, strong national telecommunications firm, it has a big problem.
2. Any nation that champions a national telcom firm and limits foreign investment is wasting its money and turning down a big opportunity.
3. When governments intervene in markets in the name of guaranteeing universal service, they generally don’t make anything universal, and they don’t enhance telcom service.
4. Every country does not need two redundant wireline networks.
5. If you’re not awarding spectrum licenses by auction, you’re making a big mistake. And if you’re not awarding all other licenses in essentially no time and in infinite amounts, you’re making a bigger mistake.
6. After you auction the licenses, let the market work.
7. The right goal for international communications is the same as the goal for domestic communications: no more regulation of communications services than of soap or software or shoes.
Principles 5 and 6, about auctions, let big business in and shut small business out, as service providers. They make virtually no provision for private mobile radio users.
The principles that Hundt articulated equate licensing spectrum with allocating spectrum. The difference is that the FCC previously decided how spectrum would be used and then issued licenses to service providers or end-users to use individual frequencies or bands of frequencies for the purpose described.
“What if the spectrum is already lightly used?” Hundt asked. “Allow auction winners to relocate the existing users at no cost, so that the market can clear spectrum,” he said.
“How should the spectrum be used?” Hundt asked. “Any way the auction winners want: no restrictions; no rules; total flexibility,” he said.
Manufacturing companies, mining companies, airport facility operators, transport companies, delivery services and many other enterprises that use private mobile radio for communications internal to their organizations aren’t well-served, in many cases, by commercial systems built to use spectrum purchased at auction. Most of these commercial systems are intended to serve consumers, the most highly populated areas or both. Many of them don’t deliver adequate coverage where current private radio users need it, and what’s available typically costs more.
Private mobile radio users should be permitted to obtain licenses in exchange for paying a lease fee. Purchasing a license at auction is not practical for private mobile radio users because the coverage of their private networks do not conform to auction regions.
“We recognize that we must pay for spectrum and suggest that a new private wireless allocation could be paid for through efficiency-based spectrum lease fees,” said Launita Hernandez of Airborne Express, a private mobile radio service user. “Fees are a viable way to reimburse the federal government for the use of spectrum.”
Hernandez and representatives of Northwest Airlines, Ford Motor Company, American Airlines, United Airlines and United Parcel Service visited Capitol Hill during the week of Dec. 16, 1996, to meet with staff members of the budget and telecommunications committees. An organization for which Hernandez serves as chairman, American Licensees for Ensuring Responsible Transition of Spectrum (ALERTS), is promoting the idea of lease fees. Other members include Toyota Motor Manufacturing-Kentucky, Delmarva Power Company, Federal Express and America West Airlines. Member companies own and operate internal communications systems to enhance corporate competitiveness, promote productivity and ensure the welfare of their employees, the key reasons for having a private radio communications network.
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IWCE The International Wireless Communications Expo is set for April 22-24 at the Las Vegas Sands Convention Center in Las Vegas. Our co-workers at Intertec Presentations (800-288-8606) can give you information about booth space in the exhibition hall. Information about the conference is available through the fax-on-demand service at 800-601-3858.
You’re invited to submit ideas for the conference. Fax them to me at 913-967-1905. Your idea may be used for this year’s conference, but if it can’t, it might be scheduled for next year’s.
