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.”

It’s hard to tell who recruited whom for the “I Hate Julius Genachowski Club.” On the one hand, I keep having this recurring day dream where I am in a room with Cisco CEO John Chambers in my Perry the Platypus avatar. Suddenly, “Chambers” tears off his latex mask to reveal he is really Randal Stephenson in a white lab coat. “You fool!” Stephenson/Doofenschmirtz monologues at me. “You thought it was Cisco waging war on the TV White Spaces! But it was me all along! Now I will crush your pathetic competitive TVWS with my Corner-The-Spectrum-Market-inator!” On the other hand, I can see AT&T Senior VP Jim Cicconni at CES, quietly nursing his anger and a drink in a dark corner of Vegas bar, when Chairman Fred Upton wanders over. “You look angry Jim. I am too. That Genachowski . . . first he blocks your merger, now he fights my spectrum legislation . . . how’d you like to help me kick him in his man-pants once and for all?” Cicconni looks up, fire burning in his eyes, and says with a quiet intensity that is downright scrary: “let me run upstairs and get my steel-tipped boots.”

However it went down, ever since the Consumer Electronic Show two weeks ago, AT&T, Upton, and Walden have become a virtual echo chamber of each other. They issued nearly identical statements (AT&T here,  Upton here)  blasting Genachowski for daring to suggest that Congress ought to leave something as technical auction design to the FCC; a position echoed by economists, a former FCC Chair, over 100 companies, trade organizations, and consumer groups and — oh yeah! – some Senate Republicans. Ever since, Upton, Walden, and AT&T have been practically falling all over each other to echo each other’s criticism of that wascally dethpicable Genachowski and how they need to rein him in before the FCC nationalizes our infrastructure in a pagan orgy of socialism.

I wish I were exaggerating just how obvious AT&T, Upton and Walden have become on the subject, but it gets worse every day. Remember that FCC “reform” legislation that no one in industry supported because it’s, well, kinda nutty radical crazy? All of a sudden, AT&T just looooooves it and thinks it will bring some “common sense reforms” to the FCC. In particular, AT&T’s letter of support praises the provisions of the proposed Upton/Walden FCC Reform Bill limiting the FCC’s merger review authority because, y’know, no one could possibly imagine that AT&T is still sorta pissed about not getting to buy T-Mobile and that’s why they suddenly decided to support this legislation that no one else in industry has supported.

But while another episode of Washington Looney Tunes never fails to amuse, it runs real risks here of messing up spectrum policy – either by passing bad spectrum legislation or blowing the chance to get spectrum legislation passed at all. Congress has resumed negotiation between the Senate and the House around the Payroll Tax Holiday Extension bill. Everyone wants to include a spectrum piece because the projected revenue from incentive auctions (approx $16 billion, when balancing the (rather questionable) projected revenue against the expenses of relocating remaining broadcasters and building a new national public safety network) will offset the cost of extending the payroll tax holiday and unemployment benefits through the end of 2012. Upton and Walden, both of whom are on the negotiating team, figures this gives them an edge. If they hold out and insist on their version of the bill, they assume Democrats will eventually cave.

There are several risks here. The first, of course, is that Upton, Walden and AT&T will prove right. None of the Senators on the negotiating team come from the Senate Commerce Committee. As a result, they are approaching this for the first time. That makes it likely that Senate Republicans will side with their House colleagues on general principle, while Senate Democrats will regard this as just one issue of many to trade. Given the importance of these issues, and the fact that other Republican members of Congress have shown concern about the future of unlicensed TVWS and wireless competition, it doesn’t have to go down that way, especially if members hear from the tech community and the public that they prefer more spectrum for everyone rather than more spectrum for AT&T alone.

But that raises the next risk – that the spectrum piece drops out entirely. This has happened in every previous iteration because Upton and Walden have refused to back down and fellow Republicans, while not willing to support them, have been unwilling to publicly push them to get over their anger management issues and think like policy wonks again. While the amount of money at issue is big enough for people to try to get it in, it is not so big that the Payroll Tax Extension will crater without it. So if it’s too hard to come to agreement on a spectrum bill, then it drops out.

One the one hand, that’s better than getting a bad bill. But I would not consider that a real win. Until this issue gets resolved, it will continue to create uncertainty for development of TV white spaces (TVWS) technology and the future smart radio technology that builds on top of it. A real win means getting a statute passed that ensures that TVWS has a future. So how to get the Republicans to adopt a modified version of the language that directs the FCC to ensure TVWS has enough spectrum to develop?

The answer, oddly enough, may lie in an unexpected spin-off from the recent PIPA/SOPA fight. Republicans have just scored a major (albeit largely unintentional) win with the tech community by loudly backing away from SOPA/PIPA. What does it look like for the Republican Chair of the House Commerce Committee and the Telecom Subcommittee to appear joined at the hip with an incumbent whose name has historically been synonymous with old-style ‘monopoly’ and whose chief complaint is that the meanies at the Department of Justice and the FCC won’t let them buy out enough competitiors? By contrast, a large cross-section of businesses and consumer groups support maintaining FCC flexibility on open spectrum and auction design.

Republicans like Senator Jerry Moran (R-KS), one of the Republican heroes on PIPA/SOPA, have laid out the Republican case for FCC flexibility on open spectrum. It is, of course, the same case made in the past by Republicans such as former FCC Chairman Michael Powell and current FCC Commissioner Robert McDowell, but it bears repeating in light of the efforts of Upton, Walden, and AT&T to make this a partisan issue and anti-Obama crusade. Open spectrum encourages entrepreneurship and innovation. It fills the gaps left by closed licensed spectrum. It’s not that you can’t innovate on licensed spectrum – people do all the time. But anyone with a new technology idea can play in unlicensed, whereas anyone trying to use licensed spectrum either has to persuade one of the four national wireless carriers to take a chance or has to try to win licenses at auction.

More importantly, it’s not an either or. We can, and should have both. Why create an artificial choice between the future of TVWS and more spectrum for existing licensed providers like AT&T? Unless, of course, you are AT&T, in which case you want to create an artificial choice where you can foreclose anyone else from getting access to wireless.

We have a very limited time to help those Democrats and Republicans who do understand the importance of preserving open spectrum in the TVWS educate their colleagues. Alternatively, we can try to get Upton, Walden and AT&T to deal with their anger management issues by taking up yoga rather than messing up our national spectrum policy.

Stay tuned . . . .

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This entry was posted in Life In The Sausage Factory, Spectrum, Tales of the Sausage Factory and tagged , , , , , , , , , , , , , . Bookmark the permalink. Both comments and trackbacks are currently closed.

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  1. […] Institute, oddly enough, knows Republicans on the House Energy and Commerce Committee. These guys already hate the FCC. Worse, Committee Chair Rep. Fred Upton (R-MI), and Rep. Greg Walden (R-OR), Chair of the Telecom […]

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