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The wireless land rush

By Owen Paine on Friday May 13, 2011 02:25 PM

Did Reed Hundt, Clinton's communications czar, do a good job in the golden era of wireless? He seems to think so, in this narrative of triumphs he posted at the frightfully dull digital coffee cup.

He makes a nice dynamic distinction between a competitive stage and a consolidation stage and alludes to the leasing versus selling spectrum -- all sound stuff at the level of an orbiting econ-con satelite like mime-self.

"We made five main decisions: (1) auction methodology, (2) interconnection, (3) standards, (4) number portability, and (5) deregulation. [and we] repudiated the purposeful selection by previous FCC's of a two-firm market [and] capped the amount of spectrum any firm could buy or own."
Could one of you please explain to us generalists this claim:
"Spectrum is a license to be in business. The more a firm has, the less capital expenditures it must incur to create a network...If the goal is to benefit the economy, through creating consumer welfare, jobs and productivity gains, then permitting firms to obtain more than a sufficient amount of spectrum is not the wise policy choice."
[S]ince we trusted in competition as the policy that would cause mobile communications firms to exploit the advances of digitization (over the airwaves), microprocessors (shrinking the size of handsets), and fiber optics, it followed that we needed to deregulate mobile communications. We pre-empted California's attempt to set wholesale wireless prices. We declined to require build-out, to create a universal service policy for wireless, to bar firms from subsidizing handsets, to impose rigorous price regulation over backhaul in certain critical geographic locations, to impose similarly stringent price regulation over roaming, or even to require quality of service. We trusted competition to address issues that might arise in these and other areas.
So... did Clinton-era Federal policy during that first stage of rampant American wireless-ness produce a happy start to telecommunication's future? Thought some of our techno nerd nihilist black-on-bleaks here might roast his butt for our pleasure.

Comments (9)


I can't comment on some of the more rarefied issues. But the refusal to mandate standards and quality of service was disastrous, I think. Trusting in "the market" for that sort of thing -- how fideistic can you get?

I think the argument for little to no regulation of burgeoning new technologies and simply selling spectrum outright reminds me a bit of the argument that team owners in the NFL often make for tax breaks and taxpayer funding to build fancy new stadiums- generally the owners will argue that the taxpayers' money is being soundly invested because of the economic growth the fancy new stadium will bring, the suggestion being that

1. It's the stadium or nothing. More years of no development and lonely tumbleweeds for the land in question, side stepping the possibility of other, non bigtime sports uses that the land might have.

2. If the team does leave, the only way to get somebody else to buy and develop the land in question is to offer them an even more onerous deal, with even more tax funding and tax breaks. (Generally asserted but unproven.)

It's not a perfect analogy, because one way or another the telecom infrastructure was going to get built, whereas at least theoretically city X could end up with an empty lot nobody wants for years to come.

But even then, if it was desirable to the Zappers or whoever circa '95 and they left for Toledo, it's reasonable to assume the property was intrinsically valuable to the business community to develop, and that's the rub-- in effect, the telecoms said to Hundt and co. "you have a really tantalizing property, but would it kill you to bribe us to take it off your hands?"

[the capped amount of spectrum bit is bogus, because caps can always be lifted in subsequent election cycles, and blamed on republicans, whereas allowing the telcos to set up one-firm market fiefdoms results in something that is very difficult to later dislodge should it prove necessary.]



which is about as short as i
can make it [and sure nuf
triangulating bucks]

"According to Open Secrets, the “telephone utilities” spent $43.2 million on lobbying in 2009. Of this, AT&T and Verizon accounted for two-thirds of the total; AT&T spent $14.7 and Verizon spent $13.1 million.

Equally illuminating, these “utilities” reported 362 lobbyists and 268 “revolvers,” who Open Secrets identify as participating in the “revolving door that shuffles former federal employees into jobs as lobbyists, consultants and strategists just as the door pulls former hired guns into government careers.” Open Secrets identifies 148 former FCC staff personnel among the revolvers, including former chairman, William Kennard, now with the Carlyle Group."
[short art. on reg. capture, http://theglobalrealm.com/2011/01/10/how-att-verizon-and-the-telecom-giants-have-captured-the-regulator-supposed-to-control-them/

Well, uhhh... uhhmmm... uhhh...

B-WOOOOM! Ouch. My head just exploded.


So that's why the US had a slower rate of wireless penetration *and* crappier quality than just about any OCDE nation. Plus, vast stretches of land that to this day have no cell signal at all. in Soviet America, failure succeeds you!

cuz of gluelicker:

When SMBIVA favorites Cornel West and Melissa quadruple-hyphen go at on the pages of La Nation, and there is scarcely a comment here -- it is proof that Crow/Dawson/Oxy sandbox antics have killed this list. Goodbye!

ant of gluelicker:

That was fast.


Hey, I can take a hint.


cuz don't be a kill joy
with that type of good
bye you know the type

which ends with (!)

i mean tink of it we's
talkin bo8ut rainbows
and tings

dat can be used for the
monopoly is good for ya

an made purty pretty too

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