http://whipandbang.co.uk/returns-policy/ Later today the Communications Liberty and Innovation Project (CLIP) will be filing comments at the FCC opposing a technology mandate in the 700 MHz band after deployment has begun and without industry consensus. Imposing a technology mandate in the 700 MHz band after auctioning the spectrum pursuant to flexible rules would be another step backwards at the FCC. Since the early 1990s, the FCC had been making progress toward a more market-based approach to communications policy. Over the last two years, however, it has looked more like a 1930s-style central planning agency than a 21st century expert. A surprise technology mandate in the 700 MHz band would bring it another step closer to its central planning past.
find out So what’s this all about? The “700 MHz band” is the spectrum in which mobile providers are deploying 4G LTE – the latest mobile Internet technology. The 700 MHz band is currently subject to the FCC’s “flexible use” policy, which allows licensees to choose the service they wish to provide (mobile, broadcast, etc.) and the technology they wish to deploy (GSM, CDMA, WiMAX, LTE, etc.). This market-based policy maximizes technology and business model innovation and allows mobile providers to rapidly upgrade their networks without asking the government for permission. As a result, 4G LTE was deployed in the U.S. more quickly than anywhere else in the world.
When mobile providers are allowed to choose their own technologies, their chosen technology may not be interoperable with other networks, which can have an adverse impact on economies of scale. Due in part to the unique characteristics of the 700 MHz band, however, the FCC opted to allow the market to weigh the advantages of technical efficiency against the advantages of economies of scale – until now. In its new 700 MHz proceeding, the FCC is asking whether it should abandon its flexible use policy in the 700 MHz band.
I’ll try to explain. The 700 MHz band was auctioned in separate sections (called “blocks”) with varying characteristics. After the auction was completed, the 3rd Generation Partnership Project (3GPP), a consensus-based global standards body, developed different standards (called “band classes”) for different sets of blocks in the 700 MHz band. The different band classes are tailored to the characteristics of particular sets of blocks and are intended to optimize the technical efficiency of mobile networks deployed on those blocks.
“Band Class 12” includes Blocks A, B, and C Blocks, and “Band Class 17” includes only the B and C Blocks.
The A Block is subject to a greater potential for “harmful interference” than the B and C Blocks (i.e., mobile communications in the A Block may not work as well as they do in the other blocks). This means that licensees who don’t have any A Block licenses can provide better mobile Internet service if they don’t use the A Block, which is why the 3GPP created Band Class 17.
Licensees in the A Block want other licensees to use Band Class 12 to create better economies of scale. These A Block licensees have asked the FCC to mandate “interoperability,” i.e., that B and C Block licensees use Band Class 12, and to stop all LTE deployment until interoperable devices are available.
It’s understandable that A Block licensees want to enjoy better economies of scale. But the government has no business giving it to them. Licensees in the A Block have no right to enjoy government-mandated economies of scale that adversely affect their competitors and other industry participants. The Rural Cellular Association (RCA), a trade group that represents several A Block licensees, admitted that an “interoperability” mandate could force Qualcomm to modify its mobile microchip designs. Yet RCA unabashedly urged that “the Commission – not the marketplace – should decide what the period of delay and the level of costs cited by Qualcomm are likely to be, and whether these delays and costs are acceptable.” Sounds like a lecture in central planning 101 – the class that always gets a failing grade.
The U.S. is currently leading the world in 4G LTE with market-based policies. To keep us there, the FCC should be adopting more market-based policies, not abandoning them. That’s why CLIP is here. To remind communications policymakers that the market works.