FCC Threatens Price Controls for Wireless Spectrum

Did the FCC miss the recent election? The Obama administration appears to have at least noticed the “jobs and the economy” memo voters sent, but the FCC is about to step on the White House’s message.


This week it was leaked to Politico that the FCC is considering even more regulations – this time, to oversee “data roaming” agreements that give wireless companies access to each other’s networks. The FCC is now apparently moving to create regulations that would abandon today’s market-based negotiations, have the government step in, and tell certain small wireless companies that it is ok to “stop building out new facilities to serve customers, instead you can go ahead and piggy-back off of somebody else’s network.” What this means is that even in parts of the country where companies own spectrum and have FCC licenses to serve wireless customers, they won’t have to invest or spend a dime to build out networks because they can just hoard their own spectrum and free ride off of a larger company’s network through forced government access policies. To add insult to injury, we understand that the FCC is also considering new regulations that would involve government oversight into the rates larger wireless companies charge to use their own data networks.

This is a really strange thing to do, considering how often the FCC has talked about the “spectrum crunch” and how “demand for spectrum would outpace supply”. Chairman Genachowski has said the “two pillars” of the National Broadband Plan were “making more spectrum available” and “using the market and technology to ensure more efficient and effective use of our spectrum. We are moving aggressively on both fronts.”


How is it efficient to have government forced access that allows free riders not to invest and develop scarce spectrum resources that could be used to provide more wireless services?

If the FCC is “moving aggressively”, they are moving backwards. We desperately need to develop unused spectrum and build new infrastructure (jobs!), but the FCC would rather go with price controls and “sharing”?

This is the “from each according to his investment, to each according to his lobbying” theory of economic growth.

The voters spoke loud and clear, but the FCC isn’t listening.


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