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Adelstein's Bregmann Revolves To CTIA
Written by Dave Burstein   
Saturday, 28 March 2009 19:14

adelstein_parrotMarch 16, 2009. USTA President Walt McCormick wrote Scott Bregmann (right) at the FCC asking him to gut the broadband stimulus and pull the money away from the Obama platform goal of reaching the "unserved."

March 25, 2009 bregmannCTIA-The Wireless AssociationĀ® announced today that Scott Bergmann will be joining the wireless industry trade group as the new Assistant Vice President of Regulatory Affairs. CTIA and USTA have several joint FCC filings on the stimulus; Scott, a very capable and generally honest guy, will considerably strengthen the lobbying effort. I hate to be writing this about Scott, normally one of the good guys.

Perhaps Steve Largent's team will learn from Bregmann why they should cooperate with U.S. policy rather than trying to control it. The Obama team is sworn to minimize corporate capture of the regulators and perhaps it's better to go along with the program. Here's some of the proposals I've heard from DC that CTIA might go along with:

Adelstein's "Use It Or Lose It" wireless licensing

By far the least expensive and most sensible way to get near universal service with voice and megabit wireless and a pretty obvious step forward. When wireless licenses come up for renewal, require that the operator actually is servicing the territory. Perhaps require 92% population coverage for the first renewal, about the current U.S. average. Raise that to 98% coverage for the second renewal, with very limited exceptions. Since U.S. wireless licenses are typically 10 years and most territories have several, in a few years 98+% would be covered without a penny of government subsidy.

An extremely important CTIA study estimated "ubiquitous" wireless broadband would require about 16,000 towers. At $500K/tower including backhaul, that's perhaps $8B for all networks. There are other costs, including equipment, but also additional income from the additional customers served. Verizon's values it's spectrum at close to $50B; AT&T and Sprint have similar spectrum positions. It's a no-brainer for any of these companies to pay their share of the $5-20B cost of near ubiquitous coverage rather than lose the spectrum.

CTIA members at first would resist the proposal because it would cost them money to complete their buildouts. However, when they realize this will make things more costly for their competition as well, and be a particular burden on new entrants. The reduced competition probably more more tahn covers the additional cost of the buildout. Verizon's Dick Lynch has already indicated they will reach well over 90% in the next few years even without this incentive, so it's not an extraordinary burden.

By prohibiting "warehousing" spectrum, the spectrum in use in the U.S. would be effectively increased by 10-30%, with an even greater effect in the most rural regions. Renewals have been so automatic that few have closely read the auction terms. Licenses are renewed by default but are subject to any rules changed by ordinary FCC proceedings. The regulations can easily be changed to require specific buildouts after 10 and 20 years. The older licenses generally were given at minimal cost, so any assertion of "taking" is unsupportable.

Honest Advertising

A service advertised at $39.95 should cost that plus a few dollars tax, not the typical $55 that shocks customers when they get the first bill. "Unlimited" wireless date plans should not have limits at 5 gig. Coverage maps should be reasonably accurate.

Verizon's Fred D'Alessio told me he hated to lie in ads, but had to do what his competitors did. If sensible rules were imposed on all carriers, none would have an advantage and customers would be much happier.

New FTC Chair Jon Leibowitz is a strong proponent of truth in advertising. There's every reason not to battle on this. The best carriers will be helped by the honesty.

Open Access/Net Neutrality

The battle in the U.S. essentially ended the day Obama was elected. He personally, and the campaign platform, are strong on this. The new FCC chair, Jules Genachowski, was responsible for the platform so we know what he believes. It's simply stupidity to fight this; Comcast should not be in court trying to beat down the fundamental belief of the elected government.

Instead, carriers should work to ensure that the definition of "reasonable network management" is properly determined. Because bandwidth has a cost, virtually no one believes "Net Neutrality" requires totally unlimited bandwidth for all users all the time. Tim Wu, who coined the term, is clear about that; the FCC "Four Freedoms" specifically allows "reasonable network management." I'm one of the strongest proponents of open networks, but also have called Comcast's 250 gig cap fair.

Even deeply conservative Kevin Martin slapped down Comcast because their throttling was neither necessary nor clearly disclosed. No one is going to stop Comcast, Verizon, orĀ  AT&T from practices that are truly necessary to efficiently run a network. The issue is blocking competitive video and charging 1,000% and higher markups on bandwidth that are unacceptable.

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I'm hopeful that the days of lobbyists virtually ordering around the government are behind us. Instead, the smart companies will work hard to serve the public interest and ultimately their customers.

Maybe Scott can teach that to his new colleagues.