Edwards on Spectrum Management

Good stuff. His letter even offers a solid brief description of the issue:

As you know, the Federal Communications Commission is now preparing to auction the 700 megahertz slice of the spectrum. This "beachfront" band is particularly well suited to wireless broadband because it has wide coverage and can easily pass through walls.

By setting bid and service rules that unleash the potential of smaller new entrants, you can transform information opportunity for people across America -- rural and urban, wealthy and not. As much as half of the spectrum should be set aside for wholesalers who can lease access to smaller start-ups, which has the potential to improve service to rural and underserved areas. Additionally, anyone winning rights to this valuable public resource should be required not to discriminate among data and services and to allow any device to be attached to their service. Finally, bidding should be anonymous to avoid collusion and retaliatory bids.

This is the kind of thing where the president winds up with a ton of latitude, so it's definitely nice to see a major candidate committing himself to sound views on this issue -- the business interest pressure pushing in bad directions here is intense.

Comments

More of Edwards playing to his base: wonky people online. The number of people who actually know and care anything about spectrum management is in the high teens - however, they also seem to all have important blogs.

Posted by Nasara | May 31, 2007 2:48 PM

That's not entirely fair, Nasara. Only the wonky base cares about these sorts of issues BEFORE they get rammed through Congress. Everyone else wakes up a few years later and wonders why every city in America has crappy carbon-copy radio stations, lousy cable and telephone service, etc.

It's not a big deal in the grand scheme of things, but it shows that Edwards is paying attention to the little issues that affect quality of life, and he's willing to risk incurring a multi-million dollar blitz of deceptive attack ads from powerful corporations in order to do the right thing.

Posted by LaFollette Progressive | May 31, 2007 3:09 PM

Of course the devil is in the details, and the question is whether he would be in a position to get the details right without Congress screwing things up.

I recently listened to a talk by a guy from ATT discussing auctions, particularly in the context of spectrum auctions. On the one hand the FCC does seem to try to get these auctions run as "fairly" as possible (when fair means things like everyone has a shot, and the US govt raises as much money as possible).
So, for example, based on the signalling that occurred in early auctions, the bids are now rounded to 5% so that signalling in the low digits isn't possible. This gets rid of some elements of collusion. Retaliatory bidding remains a big issue, and he mentioned a story about that, but it's not clear that, in any sort of repeated game, it can be avoided.
He did mention that there were problems with non-anonymous bids, and it is probably worthwhile to make the bids anonymous (if they are not already) but at the end of the day, the final winner will be known, and if the winning bid is made known, well that's for many purposes, all that adversaries need. (And of course not making the winning bid known invites its own corruption.)

However, courtesy of Congress, there is a preference for minority-owned firms, and in the NY auctions he discussed, ATT's bid were actually bids by some Alaskan company. The second bidder (I forget the name) was running the same scam, while Verizon was not. The end result was that the $2billion bid by pseudo-ATT actually resulted in $1.5 billion for the US treasury (the preference for minority firms is 25%). At this point presumably the Alaskan company leases the spectrum to ATT, and the net savings of $.5 billion are split between the two companies.

Now you can argue about whether this is fair (after-all, presumably some of that $.5billion is going to Alaska, though the amount that actually gets to *poor* Inuit in Alaska is probably miniscule --- maybe a donation to a local school library or something), but it certainly seems inefficient and pointless.

I could certainly see an ill-designed wholesaling scheme like this resulting in the same sorts of problems; for example the wholesalers might be fronts for ATT et al, who would then exploit every loophole in the legislation to drag their feet, provide crappy service, allow good connections within the designated area --- but put really aggressive slow-downs on packets leaving the area and hitting the main ATT links etc, all with the aim of "proving" that government mandated telco service is a bad idea, so just leave us alone as an unregulated oligopoly.

Posted by Maynard Handley | May 31, 2007 4:32 PM