Spectrum is
a finite resource that we are still learning to tailor towards its best current
use. Reallocating spectrum inherently means one party is taking a scarce
resource away from another, even if the spectrum has been unused by its current
license holder or abandoned by its previous user. How has the current Federal
Communications Commission (FCC) tackled the challenge of spectrum reallocation,
and how could the resulting “spectrum wars” shape the rollout of new networks?

Nathan Leamer, Vice President of Public Affairs at Targeted Victory and former Policy Advisor to FCC Chairman Ajit Pai, joined “Explain to Shane” to discuss spectrum reallocation, 5G, and the current FCC’s policy successes.

Below is an edited and abridged transcript of our talk. You can listen to “Explain to Shane” on AEI.org and subscribe via your preferred listening platform. You can also read the full transcript of our discussion here. If you enjoyed this episode, leave us a review, and tell your friends and colleagues to tune in to our discussions.

Shane Tews: Light-touch regulation has been
a staple of this FCC’s policy agenda. Tell us why this is such an important
policy approach for Chairman Pai.

Nathan Leamer:
When we think about the future of telecommunications, there are two possible
paths. One is a “mother may I” approach in which the government establishes the
rules for innovation, investment, and growth opportunities. The other is one
that enables the market — companies small and large — to grow, develop, and
innovate in ways that fit their customers. One of the greatest examples of this
over the past couple of years is the growth of innovation around satellites,
particularly as a broadband service. Whether you look at companies like
Starlink, Amazon’s Kuiper program, or others who want to create a different
type of internet access, the FCC’s light-touch approach reduces the application
process, improves the permitting process, and really allows those companies’
services to come to market without a government process.

This FCC has done a great job of driving
the interagency process — another key part of spectrum efficiency. But when it comes
to spectrum usage, there seem to be challenges regarding what path to stay on
and what to change. What has been the FCC’s approach to this complex issue?

I think Chairman
Ajit Pai and a number of the commissioners both on the Republican and Democrat
sides recognize the need to consider how to allocate these finite resources,
whether it’s spectrum management at the agency level or even at the interagency
level. Within the agency, they’re looking at how to set up an auction or an
allocation for spectrum to make sure this resource is utilized most
efficiently. Instead of having a dog and pony show where companies show up and try
to demonstrate how they could use a particular spectrum band better than their competitors,
the FCC has created an auction process that basically allows them to put their
money where their mouth is and demonstrate their actual plans. This process actually
looks at the economics and shows how these entities will use the spectrum.  

I think this
chairman did something pretty remarkable at the beginning of his term by
creating the Office of Economics and Analytics. Now, when the FCC looks at
reallocating spectrum or evaluates how to disperse funding in a different way,
they actually have real economists who know how to think about the long-term
projections and look at the money so that when we’re thinking about consumers and
the public good, we’re also thinking about the economics. This allows the FCC to
make decisions that are good for innovation and good for consumers.

Talk to us about the DOD’s potential plans
for a nationalized 5G network. Does the DOD think they know better regarding what
to do with mid-band spectrum? If so, why?

Adjacent to commercially
available spectrum, there’s also spectrum that is given to and controlled by different
federal agencies, mostly by DOD, but also by the Department of Transportation,
Department of Energy, and others. They have these large swaths of the spectrum
for their own, whether it’s for military purposes or research purposes, but
because they have so much, they’re holding onto something valuable that could
be useful in the commercial space — particularly for the development of 5G
technology. And so there’s been a lot of conversations over the past couple of
years about the FCC or other entities wanting to repurpose a small portion here
or there of DOD’s spectrum for commercial usage by private entities. The
reality is: DOD doesn’t like to play this game. They’re generally very stodgy
about engaging back and forth with other entities or even other government agencies
such as the FCC.

It was first
reported in January 2018 that some individuals associated with DOD wanted to
create a 5G nationalized network that they would build out and potentially
lease to an entity that would essentially act as a wholesaler. Instead of the
way the FCC and the rest of the government has established, this would create
privatized 5G networks that could be used across the nation.  

There are
certain individuals who want to push this idea that are very politically
connected, but it really runs contrary to how the FCC, Congress, and even the
president have called for the allocation of 5G technology and networks. It’s creating
this burgeoning political battle, because if the DOD network is built out, it could
undermine the efforts of the privatized networks, but at the same time, DOD has
access to really good spectrum. So, I think people should be asking: Should DOD
have exclusivity, or should some of this be reallocated to the private sector/commercial
space?

Early on in the pandemic, there was an
opportunity to bring 5.9 GHz spectrum to the consumer market quicker than
expected through a temporary order, which seems to have gone well. What has happened
recently in that space?

This is a
very valuable band of spectrum that has a lot of interest in use cases,
particularly among those who care about next-generation Wi-Fi. It is basically a
much more powerful, faster Wi-Fi connection, but it’s also a band that the
Department of Transportation had previously held onto and used, particularly
with dedicated short-range communications (DSRC) technology, which is their
approach for driverless vehicles. However, there’s congestion in this band
between people who want to use it for DSRC technology in driverless vehicles
and those who want to use it for next-generation Wi-Fi that could be used by
wireless providers, cable providers, and other players in the internet market.

Recently,
the FCC announced they’re moving ahead on a split-the-baby approach. Basically,
they’re going to permanently maneuver in such a way that a certain amount of
that spectrum will be available for next-generation Wi-Fi, which is exciting
for a lot of communities across the country, but a portion of it will also be
used for what’s called cellular vehicle-to-everything (C-V2X), which is
vehicle-to-vehicle technology that promises greater effectiveness than DSRC. This
approach balances these concerns — driverless technology, autonomous vehicles,
and the future of the transportation sector — with this technology’s value for
internet providers. It’s a why-not-both approach, rather than either-or. I
think this speaks to how this FCC — and hopefully future FCCs — will navigate concerns
between different agencies and players to find workable solutions.

Moving forward, what else do you think we
should keep an eye on? Any thoughts on how the election might influence innovation
policy?

There’s a
lot of uncertainty on how this election will change the way we think about
innovation policy around both telecommunications and emerging technology. The
biggest thing I’m watching is the policy conversation’s realignment both on the
left and the right, particularly among right-of-center voices who understand
the value of market-based solutions and the importance of enabling innovation
and entrepreneurship. It’s concerning to see how that conversation has changed
over the past several months, so regardless of how the election turns out, I
really do hope that the voices of reason — the voices of the market — win out.

On the Democratic
side, you’re also seeing that same kind of introspection and identity crisis where
new voices that want to break up every company bigger than a small startup are gaining
traction. This diverges from the views of many on the left who are more
business-friendly. And so I think people should pay attention to those two
changing dynamics on both sides of the aisle. They could shape the way we think
about telecommunications and technology going forward, not just on issues like
net neutrality but also on 5G, innovation, emerging technology, social media,
and the future of media companies. I’m fascinated to see how that plays out.
I’m a little worried, but also I think it’s an opportunity for new voices and
new people to participate in the conversation.

I think a
Democrat-run FCC might want to bring back net neutrality. Still, that
conversation is part of a much larger one about the internet’s future and what
regulations work or don’t work. I’m also excited to see how Congress and other
agencies approach long-term questions about consumer privacy — what the rules
of the road should be and what kind of framework works, not just for large
companies, but also for companies that are much smaller and emerging and not
just on the edge, but also amongst the internet providers.

I’m also really excited to see how the government can establish correct rules of the road for things like artificial intelligence or blockchain. I’m excited to discover how we can use these technologies to benefit our lives. But I also know that our dear friends in Congress or different agencies can be an impediment to their usefulness, so we need to make sure the framework by which we are thinking about those questions enables opportunity instead of discouraging it.

The post The Federal Communications Commission, 5G, and the ‘spectrum wars’: Highlights from my conversation with Nathan Leamer appeared first on American Enterprise Institute – AEI.