^{Democracy & Technology Blog} Podcast on Frontline Wireless proposal

This week in the Tech Policy Weekly podcast with Jerry Brito, Tim Lee and special guests Radley Balko of Reason magazine and Ryan Paul of Ars Technica I discuss the proposal by Frontline Wireless LLC for open access rules for a block of spectrum in the 700 MHz band, which I’ve previously described here .
Frontline Wireless touts itself as an emerging wireless communications provider, but it’s just a lobbying shop that includes a couple former officials from prior Democratic and Republican administrations seeking a lucrative government handout.
As a practical matter, as I have previously noted, existing carriers may find they’re excluded from this auction, due to a handful of so-called “public interest” obligations Frontline is pushing the FCC to impose on the successful bidder. And that’s the point. Fewer bidders could allow Frontline to acquire the spectrum at a significant discount — depriving taxpayers of the full value of the spectrum.
On the op-ed page of yesterday’s Washington Post, Robert Hahn and Hal Singer claim that Frontline is close to persuading the FCC to extract these obligations from whomever wins the bidding.
As for the argument that public safety needs a nationwide interoperable network financed by the private sector, it should be noted that their problems stem primarily from antiquated equipment — a result of the unwillingness of local officials to spend tax dollars on the mobile communications requirements of their police, fire and other emergency services. Local officials have also been unwilling to coordinate, as Jerry Brito has previously observed at Technology Liberation Front, with other local officials. They don’t want to give up control.
As for the argument that the marketplace needs more competitors, the FCC reports that at the end of 2005, 94% of the U.S. population lived in counties with four or more mobile telephone operators competing to offer service — a slight increase over the previous year despite the Sprint-Nextel merger and the acquisition of AT&T Wireless by Cingular.
For further reading, see:
Jeff Eisenach’s report, “Due Diligence: Risk Factors in the Frontline Proposal,” available at FreedomWorks; Randy May’s essay, “Sideline Frontline” and op-ed which appeared in the Washington Times, “Net Neutrality Overreach; and Scott Cleland’s essay, “‘Earmarked Airwaves’ — a 700 MHz auction ‘UNE-P’ deja vu?” at Precursor Blog.
Cleland points out that one of Frontline Wireless’ heavy-hitters is former FCC Chairman Reed E. Hundt, a primary architect of the telecom bubble:

His “managed competition” policies to stand on the competitive scales to heavily favor CLECs, WorldCom and Global Crossing, among other CLEC/fiber plays, led to two devastating outcomes for Americans that took years for the Nation to recover from.

• First, the heavy market intervention of Mr. Hundt contributed greatly to the market hype for CLECs and fiber backbones which ultimately cost American pensioners and investors over one trillion dollars of their wealth when the market bubble burst.
• Second, Hundt’s artificial “managed competition” market, where investors were strongly led to believe that CLEC telecom competitors would be regulatory-ily favored, contributed to a lot of stranded infrastructure investment that was not driven by market economics but by ‘managed competition” Hundtonomics. This artificial market skewing contributed heavily to the telecom debt spiral that ravaged the telecom sector for almost three years.
• The consumer harm that resulted from this grand Hundtonomics experiment was that telecom broadband investment was delayed unnecessarily years. (It is the supreme irony now, that proponents of government-intervention Hundtonomics are complaining that the US is falling behind the world in broadband when Hundtonomics was more responsible for delaying the broadband “revolution” than maybe any other policy factor.)