As the Supreme Court prepares to hear arguments in the case of a spectrum-compatible modems case, the National Review team has written a piece for National Review Magazine explaining why the FCC has allowed the Spectrum ACT to die.
As we’ve previously written, the Spectrum act has two major problems: the Spectrum acts’ mandate is “to promote broadband service in the 21st century,” and the Spectrum is not a fixed asset like copper or coaxial cable, but a spectrum asset like spectrum that the FCC can lease, buy, and otherwise distribute.
The Spectrum ACT, in other words, is a fixed-use asset that can be used to expand broadband networks, but the government can’t simply use the Spectrum to fund the development of a broadband network.
A spectrum asset is essentially a “fixed-use” asset, and thus a spectrum licensee cannot use it to build a fiber optic network.
As the Federal Communications Commission explains in its Spectrum Act: “the use of spectrum is limited by the law, and no program may use a spectrum element in a manner that is not consistent with the policy goals of the Act.”
The Spectrum Act therefore provides a broad, statutory exemption from the FCC’s general obligation to invest in broadband networks that is designed to enable “broadband” services to be available to all Americans.
This exemption is an important element of the Spectrum’s promise to encourage deployment of broadband, since the FCC cannot force a licensee to invest a fixed amount of money into a network.
However, the FCC was careful to make clear that it was not required to subsidize deployment of these “broadbands” or “fiber” services.
The agency did not explicitly endorse a specific technology, but merely emphasized the broadness of the law’s exemptions, noting that it “could not, for example, mandate that the federal government support the deployment of the Internet.
The Commission has, however, made clear that, if the FCC requires that a licensee deploy the technology, the Commission will consider the cost of such deployment.”
The Spectrum Act, in turn, also provided a number of “incentives” for the FCC to fund deployment of specific technologies, such as the “unlocking” of “a portion of spectrum for use as a spectrum source for a broadband service.”
The “unlock” was intended to incentivize a “network builder” to develop broadband networks by providing the FCC with the opportunity to “unload” unused spectrum that could be used for a new, more “fibre” or broadband service.
The “locking” provision is not directly related to deployment of “fibe” or wireless technologies, but it was a way of providing the government with a “safety net” to avoid the need to subsidise deployment of new technologies.
But the Spectrum does not just guarantee a certain amount of spectrum.
Rather, the act also explicitly grants the FCC the authority to grant spectrum licenses to certain types of companies, including telecommunications service providers (TSPs), cable TV providers, and internet service providers.
This authority was intended for those “futures carriers” that would provide broadband service to consumers without providing any actual service to anyone.
In addition, the Act gives the FCC a “blanket” license to lease the “minor” spectrum, so that the agency could “unplug” the “major” spectrum.
The FCC can use these “unleased” spectrum for other purposes as well.
For example, the agency can lease spectrum for “mobile” use.
Despite this broad scope of authority, the government has not used this authority to fund a specific type of broadband service that the government would like to deploy.
Rather than funding “fringe” broadband networks with public funds, the spectrum act gives the government a blank check to fund “fabricated” broadband services that can offer Internet service without requiring any sort of investment.
For the last several years, the federal Government has attempted to fund this type of “broadcast” service through a series of “orphan” auctions that have used “orphans” of spectrum owned by the FCC, TSPs, cable TV service providers, TEMPRA, and other entities.
In 2014, the Federal Communication Commission announced a $20 billion “fabbrica” auction to fund broadband deployment.
In 2017, the US Congress passed the Spectrum Improvement Act, which increased the spectrum allotments available to the federal agencies by $20 million, or 25% for TEMPSA, $30 million, and $40 million, respectively.
These increases were justified by the spectre of “tit for tat” pricing, whereby certain service providers could sell certain frequencies at a premium to other companies for a profit.
The FCC has been able to expand its portfolio of “cable” and “telecommunications” spectrum by leasing this spectrum to these “fantasy” carriers.
This is an effort that was intended primarily to provide a revenue stream for the federal agency, not for