FCC can prevent crisis by moving on Spectrum now

When the company LightSquared announced plans to launch a brand new, $14 billion 4G wireless network combining satellites and cell towers, the FCC cheered. They praised the company for expanding broadband to underserved areas and bringing an innovative new form of wireless service. With the FCC’s initial blessing, the company acquired spectrum and began building out its new network years ago.

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Yet, when the GPS industry and federal departments complained that LightSquared’s network could interfere with some GPS devices, the Commission quickly quieted, cowered, and slowed the company’s plans. The GPS industry used influence with bureaucrats in the federal government to curb progress, even leading to the Pentagon and other agencies leaking a preliminary report on spectrum interference in an effort to tarnish LightSquared’s public image. While progress has been made by setting up a working group between stakeholders, the Commission has largely bowed to this outside pressure. Instead, they should be working to facilitate a solution.

The LightSquared and GPS debate is at its core a technical issue. However, it is becoming clear that government is failing in its most basic, legitimate function of facilitating property rights disputes. There is natural interference between frequencies, and the FCC’s most fundamental task is to prevent such interference, in much the same way judges adjudicate disputes on land issues between neighbors. In this instance, GPS devices aren’t just picking up frequencies on GPS spectrum, but they’re also “looking into” the spectrum held by LightSquared.

The FCC and federal agencies should be better mediating this dispute and looking at ways to help fix these interference issues to bring more mobile broadband to the market. The Commission should also drop regulatory restraints on LightSquared that prevent it from making its wholesale network available to other wireless carriers.

For their part, the other federal agencies stalling these efforts – while hoarding over half of usable spectrum – should be forced by Congress to auction off their inefficiently used spectrum to the private sector, where it is much needed.

There are also lawmakers weighing in heavily against LightSquared, even stalling the appointment of FCC Commissioners to kill it. It’s not a free-market position for lawmakers to advocate for the interests of one industry against a new entrant in another. Government should not be subverting a free marketplace where consumer demand – not policymakers – decide which companies succeed and which do not.

Congress and the FCC have dragged their feet for too long on spectrum to have a credible say in micromanaging competition. This includes attempts to derail new wireless companies and spectrum-centric acquisitions. Some lawmakers have argued alongside FCC Chairman Julius Genachowski that spectrum auction legislation shouldn’t be “overly prescriptive to derive some predetermined outcome.” But they’d prefer bureaucrats at the FCC set such “overly prescriptive” rules, like preventing some companies from even bidding on spectrum.

The focus on Capitol Hill should be advancing a free-market framework by the House of Representatives to auction spectrum, while stopping the FCC from imposing unnecessary regulations. And the FCC should focus its energy less on lobbying Congress for more micromanaging power, and more on working to put the spectrum we need for mobile broadband onto the market.

Norquist is the president of Americans for Tax Reform. William Cobb is the executive director of its affiliate Digital Liberty.