Genachowski, McDowell Offer Different Narratives on FCC Spectrum Policy

FCC Chairman Julius Genachowski emphasized the extent to which he believes the Obama administration has put the industry back on a proper footing in regard to spectrum over his chairmanship. “Over the past four years, the U.S. has regained global leadership in mobile innovation,” Genachowski said. The comments built on an Oct. 4 speech at the University Of Pennsylvania’s Wharton School at which he ticked off the Obama administration’s accomplishments in heading off a looming spectrum crunch. “When I returned to the agency in 2009, we had our work cut out for us,” Genachowski said then. “And we've been working."

FCC Republican Robert McDowell disputed Genachowski’s version of events. “The U.S. has always been the worldwide leader in wireless since Marty Cooper invented the cellphone in 1973,” McDowell told us Monday. “In my 22 years of serving the FCC or being part of it, a lot of things get said in presidential election years and we have to take those with a grain of salt.” A regulatory attorney said spectrum has become much more political in recent years: “Some of it I think is probably a holdover from AT&T and T-Mobile, where AT&T rounded up every one in the world and made a spectrum argument."

"I agree that spectrum policy has become more politicized, in part because of the looming ’spectrum crunch’ and the greater competition among various spectrum users (broadcasters, satellite, wireless carriers, unlicensed, etc.) as well as between various wireless carriers (AT&T-Verizon vs. ‘competitive carriers'),” a former FCC official and wireless lawyer said. “Because there have been no major spectrum auctions during President Obama’s first term, Chairman Genachowski has pointed to other accomplishments, such as enabling more effective use of fallow spectrum, … facilitating eventual use of broadcast spectrum, and enabling more efficiency in tower siting and infrastructure-sharing."

"There is general agreement across party lines that spectrum is a critical input to growth-prone mobile broadband, as well as a meaningful revenue generator via auctions for the US Treasury at a time of steep deficits, and, therefore, freeing up additional airwaves is a top priority not only as a telecom policy but as a national economic matter,” said Jeff Silva, analyst at Medley Global Advisors. “But that’s where spectrum bipartisanship largely ends, though exceptions exist here and there. Democrats and Republicans to varying degrees have diverged on spectrum policy in recent years, a dynamic that has played out on such fronts as merger reviews, development of a national public safety network, unlicensed/licensed spectrum, government spectrum sharing/reallocation and spectrum holdings.” While Democrats and Republicans disagree, “neither party really possesses a silver bullet to adequately address long-term future requirements of mobile-phone operators in an environment of dwindling airwaves amid a trendline of exponential wireless-data demand for years to come,” Silva said. “Meeting that challenge will remain formidable for whichever party occupies the White House going forward. The stakes are huge."

Communications lawyer Andrew Schwartzman said the increasingly partisan nature of the fight over spectrum can be seen in many telecom policy battles. “I wouldn’t say that spectrum policy has been apolitical,” said Schwartzman, who represents nonprofit groups. “Rather, I would say that positions were not determined by partisan political considerations. For decades, positions on spectrum policy -- and, indeed, all telecommunications policy -- has largely split on regional lines, but these positions were certainly driven by politics. In recent years, as Congress has become increasingly divided on partisan lines, the same has become true of spectrum policy."

Free State Foundation President Randolph May said Genachowski is “politicizing” spectrum policy. “When he took over, there had been many years of a continuing growth with respect to important wireless indicators,” May said. “For example, from 2001 to 2008, the number of wireless subscriber connections grew from 118 million to 262 million. Since then, there have been only 45 million additional connections. From 2001 to 2008, wireless revenues grew from $59 billion to $144 billion per year. In 2012, the annual wireless revenue figure was $178 billion. Looked at this way, it’s hard to understand what Genachowski means to imply by suggesting he took over a bad situation. That’s plain wrong. He falls back on pointing to the number of new apps created in the last three years. … Does anyone really think that the FCC deserves credit for the fact we're at a point in time when the number of apps is exploding? If anyone wants to score political points concerning spectrum policy, they could take aim at the Obama administration’s failure to get some government spectrum freed up and for throwing roadblocks in the way of completing secondary market transactions.”

"When Chairman Genachowski first rang the alarm bell in 2009 about the spectrum crunch, many people at the time said, ‘what spectrum crunch?'” an FCC spokesman said by email late Monday. “Today, there is widespread agreement that the world-leading position in mobile that America has regained in recent years is putting enormous strain on our spectrum infrastructure. After trailing for too long in key 3G metrics, America is now leading the world in deploying at scale the next generation of wireless broadband networks, 4G LTE. America currently has 69 percent of the world’s LTE subscribers and has become the global test bed for 4G LTE apps and services. The Chairman’s comprehensive multi-pronged strategy to ensure that we maintain U.S. leadership in mobile innovation includes first-in-the-world incentive auctions, government-commercial spectrum sharing, and technology innovations such as small cells.”