Economics, Regulation

The truth about ‘free Wi-Fi’

Image Credit: Shutterstock

Image Credit: Shutterstock

Today’s front page story in the Washington Post—provocatively headlined “Tech, telecom giants take sides as FCC proposes large public Wi-Fi networks”—will surely get a lot of attention. But there’s little cause for alarm: The story is almost entirely fiction. The FCC has not proposed large public Wi-Fi networks, and the only “taking of sides” going on is over highly technical issues associated with how to carry off planned incentive auctions, which are designed to transfer 120 MHz of broadcast television spectrum to wireless broadband providers, who need it to meet exploding demand.

As many will recall, back in early 2010 the FCC released its National Broadband Plan. It’s a sweeping document, full of plenty of ideas and proposals to argue about, but one idea around which there was and remains wide agreement was its politically courageous proposal to find a way to transfer some spectrum from broadcasters to wireless broadband. Specifically, the Commission proposed to hold incentive auctions in which it would act as a “third party auctioneer,” transferring spectrum from the broadcasters to the wireless carriers, with the broadcasters getting a portion of the proceeds.

There have been some bumps in the road along the way, but give the FCC credit for persistence. In February 2012, Congress passed the “Spectrum Act,” giving the Commission broad authority to conduct the auctions, and late last year the FCC issued a notice of proposed rulemaking asking for input on how to do so. The target date for the auctions is in 2014.

The comments submitted late last month in response to the NPRM—over 200 in total—were mostly thoughtful discussions of detailed technical issues: How to structure the guard bands around the new mobile wireless spectrum bands, whether the reverse (broadcasters selling spectrum) and forward (mobile wireless carriers buying it) auctions should be held in parallel or sequentially, and, yes, how much spectrum to set aside for unlicensed use. They signal two things: The FCC faces some really difficult technical challenges to carrying off the auction successfully, but also that people are now beginning to believe it will happen. That’s a big success for the FCC, and if it is able to get this done it will be a big success for wireless broadband, which desperately needs the additional spectrum.

What you won’t find in the comments are responses to the proposal “designed by FCC Chairman Julius Genachowski” for the federal government to “create super Wi-Fi networks across the nation.” There’s a reason for that: The proposal exists only in the rich imaginations of a handful of cyber-socialists, who just can’t come to terms with the fact that America’s largely market-based communications policies are working, and instead see broadband as the next battlefield in the progressive war against private ownership. There’s a lot we can argue with the Obama administration about—but so far, nationalizing the Internet doesn’t seem to be on the list.

Full disclosure: I submitted a declaration in the incentive auction NPRM on behalf of a group of broadcasters who want to participate. It doesn’t mention unlicensed spectrum or Wi-Fi.

16 thoughts on “The truth about ‘free Wi-Fi’

  1. The fact that you’re a charlatan who makes money extorting the public assets for private gains was pretty apparent in Jeremy’s comment.

    It’s a new frontier for Libertarianism, when even the air is socialist because everyone breathes.

    Besides, AT&T is barely scraping by and just because it “colludes” with other wired and wireless companies to fix WiFi prices way above the cost is just the price of doing business.

    Your brave stand in defense of the uber-powerful and wealthy against the rest of us is something to admire Jeff.

  2. So selling a lower quality of service, at a higher price, and providing crap customer service is working? Most other industrialized countries have higher speeds and lower prices. It does not matter how many people who know no better are satisfied with their service.

    • But, in most other countries, Jeff is not awarded cash benefits from rich people from helping them game the system.

      Can’t you understand, Chris, this is about his “freedom” to make a killing

  3. Damn… Once the Internet is free to everyone, think how many more people will visit this site!!

    AEI will become the new Fark.com

    And if it doesn’t you will have this article to blame, surely….

    And I did not call you Shirley.

  4. I almost don’t want to comment here for fear of bringing more attention to it.

    We all know you’re being paid for this opinion, but you might want to reconsider your strategy of labeling everything that you don’t like as “socialists.”

    There are legitimate potential issues, arguments and discussions around this topic. Why line yourself up with the riffraff who can only go “WHHAAAAARRRGARBL SOCIALISM!” when confronted with an issue?

    My challenge to you is to edit this article and make your points about why this is a bad idea without invoking political talking points and buzzwords. Show us some critical thinking. Give us a reason to think that this is more than a business-sponsored advertisement.

  5. “cyber-socialists, who just can’t come to terms with the fact that America’s largely market-based communications policies are working.” The hyperlink references industry research ’9 out of 10 households have a connectivity choice’

    Substantive point:
    Aside from the naive, provocative language, market failure exists for 10% of US households. There are currently 114,761,359 US households. Which means 11,476,136 households do not have choice. At 2.6 people/household that’s about 30 million people in this country who lack any competitive choice.

    That’s too many people with lost business opportunity and lost business for companies that stream media.

  6. Look, you may not really see the larger picture here, so…

    there’s an asteroid right next to our planet, that is estimated to contain upwards of $90 trillion, in mineral wealth. That is one asteroid among hundreds of thousands, I might add.

    So what do you suppose will happen to your precious terrestrial market, when numbers enter the system that make our little $14 trillion debt seem like chicken feed? You damn well know that, humans being humans, will do everything in their limited power to access those rocks, because:

    A) we desperately need them, and we know it.

    B) the grass is greener, and this time it really IS greener.

    C) you built a capitalist system, and that capitalist system demands we harvest those rocks.

    So let’s assume that it’s going to happen, we’re just taking that for granted, for the sake of the argument: if you really believe in the free market, there is literally no way that influx of wealth won’t influence the entire system.

    Something like global wi-fi might become nothing more than a novelty, in a world like that. With resources like those at our disposal, given enough time, we could build just about anything we felt like, really.

    I imagine you wrote this for a paycheck. Some part of me hopes that’s true, because if it isn’t, you are in for awakenings so rude, that I wouldn’t wish them on my worst enemy.

    Stay strong, your world is about to get turned upside-down, and you’re on the wrong side of history.

    This is not the future, but this is the road to it.

  7. >who just can’t come to terms with the fact that America’s largely market-based communications policies are working

    Working?? Most of us have one choice in broadband. They offer sub-par speeds with low bandwidth caps.

    The US is far from the top when it comes to broadband speed, penetration, neutrality or cost: http://gigaom.com/2012/11/23/the-state-of-broadband-in-the-u-s-infographic/

    To see real competition, look around Kansas City where “coincidentally” the other carriers are boosting speeds and lowering prices to compete with Google Fiber.

    I even tried to pay more for “improved access” but my carrier would not let me have “business class” (still slow) in my residential area.

    So most of us have to impatiently wait for the “broadband future” we were promised so long ago.

  8. First, my main point — that the Post story was not fact based — doesn’t seem to be in dispute. See e.g.,
    http://arstechnica.com/tech-policy/2013/02/no-free-wi-fi-isnt-coming-to-every-us-city/
    and
    https://stifel2.bluematrix.com/sellside/EmailDocViewer?encrypt=82e03629-470f-4e02-98bf-5d4e4ea2ae66&mime=pdf&co=Stifel&id=dpkaut@stifel.com&source=mail

    Second, those who argue the U.S. is way behind in the broadband race haven’t been successful in persuading the current FCC. It was Julius Genachowski, after all, who said last year that the U.S. “has regained global leadership, particularly in mobile” and has a “broadband infrastructure capable of delivering 100+ megabits per second to approximately 80 percent, putting us at or near the top of the world.” http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0710/DOC-315097A1.pdf

    As for “cybersocialists,” IMHO it’s a little much for those engaged in pure ad hominem attacks to be be complaining about the use of labels — especially when the labels are accurate. The first line of the Wikipedia definition says “Socialism refers to an economic system characterized by social ownership of the means of production….” It follows that someone who favors public ownership of the Internet infrastructure is fairly and accurately termed a “cyber-socialist.”

    Finally, let me respectfully suggest you will get further in this debate if you quit it with the character assassination and try showing a little sense of humor.

    After all, remember, corporations are people too.

    (That was a joke.)

    That’s all I’ve got for now…..

  9. Please explain to me how auctioning monopoly rights over publicly owned spectrums is in the interest of the free market?

    If you were actually interested in removing government from the equation you would advocate for something that need not lead to near permanent control by government endorsed monopolies.

    You are defending crony capitalism because thats where you leech your income from. Calling the opposition socialists and anti-freemarket is just rabble rousing hypocrisy, icing on the cake.

    • Although the joke about corporations was funny.

      If Jeff could find a way to license the air and sell it to a corporation as a public utility, he would be very interested….I mean, for the sake of freedom

    • PhillR:

      Perhaps this is a teachable moment.

      One group of firms (call them “wireless carriers”) shows up at the government and says “we’d like to use some spectrum so we can sell stuff and make money, and we’re prepared to participate in an open, competitive auction and pay billions of dollars to the Treasury to do so.” Another group (call them “wi-fi providers and device makers”) shows up and says “we’d like to use that same spectrum so we can sell stuff and make money, but the only competition we want to participate in is political, and, by the way, we want the spectrum for free.”

      The second process is crony capitalism. The first is not.

      (PS: Have you heard the phrase “Baptists and bootleggers”? If not, Google it.)

      • Actually, the second group is the one with actual competition.

        The first group is asking for monopoly rights over a limited spectrum. Once granted they can do whatever they want, including not using it fully, or even using it poorly.

        The second group is asking that everyone be allowed to compete equally in a common space and true market forces can act and the best product and company will likely win.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>