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Abstract

Although most studies of major communications reform legislation focus on the merits of their substantive provisions, analyzing the political dynamics behind the legislation can yield important insights. An examination of the tradeoffs that led the major industry segments to support the Telecommunications Act of 1996 (the “1996 Act”) provides a useful illustration of a political bargain. Analyzing the current context identifies seven components that could form the basis for the next communications statute: (1) universal service; (2) pole attachments; (3) privacy; (4) intermediary immunity; (5) net neutrality; (6) spectrum policy; and (7) antitrust reform. Assessing where industry interests overlap and diverge and the ways that the political environment can hinder passing reform legislation provides insights into how these components might combine to support the enactment of the next Telecommunications Act of 1996.

Abstract

The battle over rules governing 5.9 GHz airwaves offers important lessons in both the creation of property rights and applied public choice. Set aside in 1999, the 75 MHz “Car Band” band was designated by the U.S. Federal Communications Commission (FCC) to support emerging vehicle telematics and computerized driving. Transportation regulators and automakers, including General Motors, Ford, and BMW, claimed this would efficiently promote road safety, fuel savings, and collision avoidance, as dedicated bandwidth would operate under a “spectrum commons” regime designed to favor such applications. While anticipated services gradually developed, the 5.9 GHz band did not. Spectrum inputs outside the “Car Band” accommodated driving applications, while the general development of wireless networks shifted social priorities. Eventually, Internet services companies such as Comcast, Google and Microsoft claimed the 75 MHz allocation was wastefully large and that switching access rules to favor WiFi would generate net benefits. Suggested for possible reallocation by the U.S. Department of Commerce since 2012, the FCC issued an order in 2020 to split the baby: 45 MHz of the band would be shifted to Wi-Fi, with 30 MHz remaining dedicated for Intelligent Transportation Systems. The FCC’s 2020 “Cost Benefit Analysis” purports to quantify the trade-offs involved, but upon scrutiny fails to plausibly value Wi-Fi services or to even consider the relevant opportunity costs. The costly, delay-intensive and ad hoc policy process (whose costs are additionally ignored by the FCC) begs for further development of auction mechanisms to rationalize alternative rights assignments.

What should a government do when it owns geese that lay golden eggs? Should it sell the geese to fund government programs? Or should it let them run wild so everyone can have a chance at a golden egg?

That’s the question facing Congress as it considers re-authorizing the Federal Communications Commission’s (FCC’s) authority to auction and license spectrum. Should the FCC auction spectrum to maximize government revenue? Or, should it allow large portions to remain unlicensed to foster innovation and development?

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These days, there isn’t a lot of harmony in the world of technology policy. But there is a bright spot of bipartisanship in a section of our airwaves: the 5.9 GHz band. In 2020, the FCC voted unanimously to modernize the rules in this spectrum to allow both Wi-Fi and automotive safety tech to operate. This win-win was celebrated by proponents of car safety and broadband alike. But today the Department of Transportation (DOT) is working on a study that may purposely have been designed to undo this decision. At a time when broadband is more important than ever, we should not undo this popular and bipartisan policy.

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In a turf war between federal agencies that could prove deeply disruptive to travelers, the Federal Aviation Administration is threatening to ground planes if the Federal Communications Commission allows wireless carriers to begin operating in the C-band spectrum this week.

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Policy is not settled quickly in communications law. The 1996 Telecommunications Act required incumbent telecommunications carriers to open their networks to competitors on regulated terms. It took more than a decade, two trips to the Supreme Court, and several trips to the Court of Appeals for the D.C. Circuit to ascertain the meaning of this statutory requirement. The story is similar to the Federal Communications Commission’s (FCC) efforts since 1998 to fit consumer internet service into the same Telecommunications Act’s statutory framework, resulting in repeated trips to the Courts of Appeals and the Supreme Court.

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ICLE Director of Innovation Policy Kristian Stout joined a digital panel organized by WifiForward and the Wi-Fi Alliance on the state of the Wi-Fi 6E market. The full video is embedded below.

Dear Secretary Buttigieg, Secretary Raimondo, and Director Deese:

The International Center for Law & Economics, New America’s Open Technology Institute, Public Knowledge and the R Street Institute represent organizations that take contrary positions on many policy issues. But we all agree that the Federal Communications Commission’s bipartisan compromise decision to open the 5.9 GHz band to both automotive and  broadband technologies achieved the right balance. We therefore write to respond to a March 11, 2021 letter from the Intelligent Transportation Society of America (ITS America) and  the American Association of State Highway and Transportation Officials (AASHTO).[1] This letter argues that you should intervene in an attempt to overrule the considered decision of an independent regulatory agency, without revealing key facts about the band. The truth is that the automotive industry was granted access to this band more than twenty years ago and has still failed to produce any real-world safety benefits—and that the FCC’s well-supported and bipartisan decision will both support crash-avoidance advances and expand broadband at a time when Americans need it more than ever. We urge you not to undermine the FCC’s important decision as ITS America and AASHTO ask you to do.

On November 18, 2020, the Federal Communications Commission (FCC) adopted a unanimous and bipartisan 5.9 GHz Order designating (1) 45 megahertz of the 5.9 GHz band for  indoor Wi Fi and other unlicensed broadband technologies and (2) 30 megahertz for automotive safety technologies.[2] Our organizations believe that the FCC’s compromise approach was right for strengthening the Wi-Fi connections Americans rely on and for supporting the innovation in automotive technologies needed to finally address the failure of the FCC’s previous ITS policy.

The FCC’s 5.9 GHz Order recognized the enormous contributions Wi-Fi makes to Americans’ everyday lives and to the Nation’s economy. Demand for Wi-Fi has been increasing rapidly for years, and recent research published by the Wi-Fi Alliance has found that Wi-Fi creates nearly $1 trillion in economic value annually in the United States today.[3] The COVID-19 pandemic has only magnified the importance of Wi-Fi to Americans working, attending school, completing homework assignments, attending telehealth visits, connecting with family and friends, and more via their broadband internet connections. Even before the FCC adopted its final order in November, it granted special temporary access to the lower 45 megahertz of the 5.9 GHz band to 100 wireless internet service providers, who used it to immediately expand capacity for customers in dozens of rural areas across the country using existing devices.

Because of Wi-Fi’s enormous success, however, the spectrum bands commonly used today are overburdened. As Americans continue to rely increasingly on Wi-Fi to connect more and more devices to the internet, the FCC must seize opportunities to make more spectrum available.

The FCC began to study the 5.9 GHz band for Wi-Fi and other unlicensed applications in 2013. In 2019, in a notice of proposed rulemaking, the Commission correctly recognized that even though the FCC had set aside the full 5.9 GHz band over twenty years ago in 1999 for a particular automotive safety technology called Dedicated Short Range Communications (or DSRC), that technology had “not lived up to its promise, … leaving valuable mid-band spectrum largely fallow.”[4] Today, there is no use of the band at all in the vast majority of the country, and there is not even one automobile model currently built with DSRC. In recognition of this failure, the FCC proposed to split the band so that unlicensed technologies like Wi-Fi could operate in the lower 45 megahertz of the band, and a new automotive communications technology called C- V2X could operate in the top 30 megahertz of the band. It noted that the 5.9 GHz band is adjacent to the most widely used Wi-Fi band in the United States and that adding those 45 megahertz would enable the use of wider Wi-Fi channels needed to make more efficient use of the spectrum and to support next-generation broadband applications.

Particularly with the emergence of C-V2X, preferred by many in the automotive industry, the Commission believed that a compromise giving both Wi-Fi and C-V2X the ability to operate would finally make efficient and valuable use of the 5.9 GHz band. The Commission received extensive comments over many years from Wi-Fi advocates and automotive interests, and met repeatedly with interested parties. It also considered multiple rounds of input from the National Telecommunications and Information Administration and the U.S. Department of Transportation on behalf of private automotive companies and states, even though this band is not available for Department of Transportation federal use. In 2020, after many years of consideration, the Commission finally released the 5.9 GHz Order adopting the compromise proposal. Commissioners from both sides of the political aisle voted unanimously in favor of the 5.9 GHz Order, following years of bipartisan effort.

Despite this open and fair proceeding by an independent regulatory agency acting within its area of expertise, ITS America and AASHTO now ask you to work to overturn the FCC’s unanimous judgment. They argue, just as they have before the FCC again and again, that automotive communications technologies are poised to revolutionize automotive safety, if only the FCC would get out of the way and leave them the full 75 megahertz of the 5.9 GHz band instead of the top 30 megahertz. ITS America and its members made the same promises over twenty years ago about DSRC’s just-around-the-corner ability to improve vehicle safety when they successfully convinced the FCC to grant them the unusual and ill-fated subsidy of free, exclusive spectrum. They had two decades and billions of dollars in taxpayer-subsidized grants and investments, but failed to deploy DSRC widely in commercial vehicles. As a result, the only current DSRC uses of the band are sparse pilot projects for applications that need far less than the full 75 megahertz—not the ubiquitous deployments along roadways and in vehicles that would be necessary for DSRC to deliver on its promises. The FCC was right to recognize that there is a more efficient way to make use of the 5.9 GHz band for the benefit of Americans, while still leaving more than enough spectrum for the automotive industry to provide the safety applications they promised decades ago.

The FCC gave ITS America and AASHTO a full and fair hearing. These organizations were vocal participants in the FCC’s 5.9 GHz rulemaking process. They filed comments as far back as 2013 and presented their views in meetings with the FCC’s expert engineers many times over the course of the rulemaking. After years of careful consideration, the FCC concluded that there is room enough in the 5.9 GHz band for the future of Wi-Fi and for C-V2X, the future of automotive communications according to many industry stakeholders.

For ITS America and AASHTO now to ask the Administration to intervene with Congress in an effort to overrule the technical analysis and unanimous decision of an independent regulator, after 20 years of illusory promises, is nothing short of breathtaking. The country cannot afford for the Administration or Congress to fall prey to another generation of smoke and mirrors. We urge you to decline their invitation to undermine the FCC’s independence and its careful technical judgment.

Sincerely,

International Center for Law & Economics

New America’s Open Technology Institute

Public Knowledge

R Street Institute

[1] Letter from Shailen Bhatt, President & CEO, ITS America, and Jim Tymon, Executive Director, AASHTO, to the Honorable Pete Buttigieg, Secretary, U.S. Department of Transportation, the Honorable Gina Raimondo, Secretary, U.S. Department of Commerce, and Mr. Brian Deese, Director, National Economic Council (Mar. 11, 2021), available at https://itsa.org/wp-content/uploads/2021/03/ITSA-AASHTO-V2X-Letter-March-11.pdf.

[2] See Use of the 5.850-5.925 GHz Band, First Report and Order, Further Notice of Proposed Rulemaking, and Order of Proposed Modification, 35 FCC Rcd. 13440 (2020) (5.9 GHz Order).

[3] See https://www.wi-fi.org/news-events/newsroom/wi-fi-global-economic-value-to-reach-5-trillion-in-2025.

[4] Use of the 5.850-5.925 GHz Band, Notice of Proposed Rulemaking, 34 FCC Rcd. 12603, ¶ 18 (2019).

One of the themes that has run throughout this symposium has been that, throughout his tenure as both a commissioner and as chairman, Ajit Pai has brought consistency and careful analysis to the Federal Communications Commission (McDowell, Wright). The reflections offered by the various authors in this symposium make one thing clear: the next administration would do well to learn from the considered, bipartisan, and transparent approach to policy that characterized Chairman Pai’s tenure at the FCC.

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