Tales of the Sausage Factory

What the Heck Is The “Duplex Gap” And Why Has It Blown Up The July FCC Meeting?

Difficult as it is to believe, there are times in policy when issues do not break down simply by partisan interest or into neat categories like incumbents v. competitors or broadcasters v. wireless carriers. Sometimes — and I know people are not gonna believe me on this – issues break down on pure substance and require lots of really hard choices. Of course, because these issues are highly technical and complicated, most people like to ignore them. But these kinds of issues are also usually the hardest and most intractable for people who actually care about what the world looks like and how this policy decisions will actually work in reality.

 

So it is with the question of whether to put broadcasters in the duplex gap as part of the repacking plan in the incentive auction. Did your eyes glaze over yet? Heck, for most people, it’s gonna take a paragraph or two of explanation just to understand what that sentence means. But even if you don’t know what it means, you can understand enough for this basic summary:

 

  1. Just about every stakeholder in the auction — wireless carriers, broadcasters, wireless microphone users, tech company supporters of using unlicensed spectrum in the broadcast bands, public interest groups — all told the FCC not to put broadcasters in the duplex gap.

 

  1. Nevertheless, the Auction Team proposed putting broadcasters in the duplex gap, based on a set of simulation that suggested that the FCC would only get back 50-60 MHz of spectrum to auction if they protected the duplex gap. The Chairman circulated a draft order adopting the Auction Team’s proposal.

 

  1. Everybody freaked out. The Chairman found he did not have 3 votes, or possibly not even 2 votes, to adopt his proposal on duplex gap. The freak out is so intense and so bad that the FCC actually waived the Sunshine Period for this itemso that interested parties can continue to talk to FCC staff and commissioners until the night before the meeting. The FCC also released additional data showing the impact would be limited to a relatively small number of cities.

 

  1. That helped some, but not enough. Despite progress on negotiations, the FCC clearly did not have time to get to the right solution in the 5 days between the release of the new data and the actual vote. Also, a bunch of people were pissed that the Auction Team hadn’t released the data sooner, and hadn’t provided more explanation of the underlying model and the assumptions behind it. On Tuesday, the Republican Chairs of the House Energy & Commerce Committee & the Telecom Subcommittee wrote Wheeler a letter chastising him for having a bad process and calling on Wheeler to pull the item from the agenda entirely. On Wed., the day before the vote, Wheeler wrote back defending the process but agreeing to pull the item (and the associated item on whether or not to change the spectrum reserve) until the August Meeting three weeks from now.

 

In Policyland, this passes for high drama. It is, to say the least, highly unusual. Enough so that even folks who find technical issues like this complicated and boring to the point of insanity are asking: “what the heck just happened there? Who lost and who won?” The equally complicated answer: “no one lost or won, we’ve got a serious debate about a technical problem which has consequences no matter how you resolve it” is not nearly as satisfying as “the carriers” or “the tech companies” or whatever.

 

I explain and unpack all of this below, as well as consider possible impacts and ways to resolve this. But again, I want to stress this is a super hard problem. This is about competing goals and the difficulty of predicting the future with any certainty. It’s also about trust and stuff, which is hard to come by in Washington even at the best of times. This is not subject to simplistic plotlines like “Oh, the Auction Team are out of control” or “The broadcasters and unlicensed supporters are just being stubborn.” (Wait, the NAB and the unlicensed guys and the wireless microphone guys are on the same side? And they agree with Verizon? WTF?) This stuff is hard.

 

More below . . .

 

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Posted in Spectrum, Tales of the Sausage Factory | Also tagged , , , , , , | Comments closed

Tales of the Sausage Factory

AT&T, Anger Management and Spectrum Legislation

Based on recent statements, it’s hard to tell whose angrier at the Federal Communications Commission (FCC) and its Chair, Julius Genachowski: AT&T’s Upper Management or the House Commerce Committee Republicans. Mere mention of Genachowski’s name converts House Commerce Committee Republicans, such as Telecom Subcommittee Chair Greg Walden (R-OR), from urbane sophisticated legislators into sputtering mad parodies of Elmer Fudd.  “Oooh that wascally Chaiwman! Always wegulating the fwee market! I’ll fix his wagon!” Meanwhile, AT&T CEO Randal Stephenson devoted the main part of his recent earnings call to repeating variations on “Juliuth, you’re desthpicable.”

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Posted in Life In The Sausage Factory, Spectrum, Tales of the Sausage Factory | Also tagged , , , , , , , , , , , , | 1 Comment (Comments closed)

Tales of the Sausage Factory

My Insanely Long Field Guide To Cisco’s War On The TV White Spaces

Will Cisco’s war against the TV white spaces tank incentive auctions? No doubt this question comes as a surprise to the vast majority of people unaware Cisco was running a war against TV white spaces (TVWS). True, Cisco has mostly tried to stay behind the scenes. But as we get closer to the Super Committee deadline, which include negotiations for incentive auction rules that would let TVWS survive, Cisco has become increasingly willing to go public with its anti-TVWS lobbying efforts.

This blog post on the Cisco blog, followed by this letter from the High Tech Spectrum Coalition (HTSC), finally say publicly what Cisco and its allies have been saying privately since debate over spectrum legislation began last January: “Death to the TV White Spaces.” Instead, argues Cisco, open up a new block of 5 GHz spectrum to “replace” the white spaces. But with spectrum legislation in trouble – as evidenced by CTIA’s non-stop radio advertising here in D.C. and it’s recent ‘we love unlicensed, can’t we all get along?’ letter to the Super Committee – Cisco’s continued opposition to white spaces threatens to tank any hope of getting incentive auctions passed either in the Super Committee or elsewhere.

Incentive auctions, while popular as a revenue generator, were always a tough sell because of broadcaster passive/aggressive opposition. Adding D Block reallocation made it even more difficult. Cisco’s war on the TVWS threatens to be the final straw that makes this lift just too heavy. It splits a tech community that would otherwise wholly support incentive auctions, while simultaneously pissing off key members of Congress who helped get TVWS done in the first place.

So the time has come for Cisco, CTIA, and others who really want incentive auctions, to ask themselves whether it’s worth it to risk incentive auctions just so that Cisco can keep Microsoft, Google/Motorola, Dell, and others from bringing a competing product to market. The Hutchison/Rockefeller Bill, S.911, was a compromise that kept spectrum for TVWS, gave Cisco the 5 GHz block it wants, and made sure that a minimum threshold of 84 MHz would be auctioned before allocating any recovered spectrum to replace white spaces lost by auction or repacking. While not great from my perspective as a white spaces supporter (and I’d still like to see it tweaked some), it was at least a livable compromise. Cisco’s anti-TVWS campaign already backfired once, with the Republican discussion draft to require auction for all unlicensed spectrum. Will Cisco and CTIA fail to learn just how easy it would be for them to blow this for everyone? Or will they settle for the compromise that got a bipartisan bill out of the Commerce Committee?

Why Cisco has been gunning for the TVWS, the quiet little war of the last ten months, and how to get out of this quagmire before it’s too late, below. . . .

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Posted in Life In The Sausage Factory, Spectrum, Tales of the Sausage Factory | Also tagged , , , , , , , , , , | 7 Comments (Comments closed)
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