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Jonathan Spalter

Jonathan Spalter

Posted: October 21, 2009 04:05 PM

Wireless Catch-22

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There are many busy people in Washington these days - few more so than FCC Chairman Julius Genachowski. He's just passed the midway point in his ambitious effort to deliver a National Broadband Plan to Congress. He's launched a major proceeding to examine the state of wireless. And, tomorrow he's expected to unveil his proposal to safeguard an "open Internet."

There's a lot to admire in these efforts. But among his more controversial proposals is one to extend so-called 'net-neutrality' rules to wireless networks. To his credit, Genachowski showed up at a wireless gathering in San Diego recently to speak directly to the mobile community about his ideas.

There Genachowski won hearts, minds and headlines with his acknowledgment - the first from our government - of 'a looming spectrum crisis.' This is a serious matter for consumers and for innovators. With mobile data traffic growing at 100 times the rate of wireless voice traffic, a serious supply-demand imbalance is headed our way - one that can only be relieved by government leadership to make more spectrum available to keep pace with consumer demand.

The technological and policy quandary? How to address this profound and pressing national need, while at the same time asserting that we have to potentially make the crisis worse by fixing these fast-evolving networks with what are widely viewed as unworkable engineering mandates.

Without question, the chairman is under intense pressure to deliver on a high-profile campaign pledge. There's also little doubt he believes passionately (as do I) in the importance of an open Internet. The chairman's recent speeches strongly affirm this administration's commitment to this defining notion of consumer's online experience. In fact, in the absence of any new regulations, the chairman has already racked up two landmark victories: AT&T's announcement that Skype and other free-calling services can run on its networks without violating a customer's service contract, and Verizon's new alliance with Google to offer "open" Android phones. Both reflect the decisions of private companies - and a clear acknowledgment of a new era.

Given this progress, as well as the largely conflicting nature of the spectrum crisis, where solutions hinge on constructive public-private engagement and rapid, profound cycles of investment, now would be an appropriate time to take a breath and truly consider the genuine risks of direct government intervention in a wireless market that has been such a profound engine of innovation and growth and today is responsible for 2.7 million American jobs and $100 billion of our nation's GDP.

One risk of moving aggressively forward without first resolving the spectrum crisis is whether we unwittingly cause this vital sector of our economy to retreat. Will carriers hold back investment in our nation's wireless infrastructure in favor of investing in overseas operations? Will private equity and our capital markets - those providing oxygen to a vast mobile ecosystem of applications, services, technologies and content providers - find more attractive destinations for their capital? Will innovation and its broad consumer and economic benefits suffer? These questions don't have clear answers yet, but must be deliberately and thoroughly addressed.

As the Chairman seeks to translate laudable principles into specific operational mandates, he has taken on an arguably impossible task when it comes to wireless. How do you regulate an innovation ecosystem where the only constant is disruptive change, where key operating systems have yet to be deployed and the foundational capacity challenge has scarcely been declared much less resolved?

The Chairman deserves kudos for the scope of his ambition, as well as for his commitment to an FCC process led by pragmatism, data, and facts. The spectrum crisis clearly requires immediate action. But it's hard to conceive of how a rush to regulate helps our nation address this critical and timely challenge.

The wisdom of patience is too often overlooked in Washington. As a result, this wisdom is typically hard-won. The ultimate benchmark of success isn't the enactment of new regulations. It's the real-world, pragmatic outcomes we all hope to achieve. Openness, yes, but also investment and innovation that improves people's lives and expands U.S. opportunities.

Through Democratic and Republican administrations wireless has thrived in a free and open environment. This includes freedom from direct government intervention in the engineering, operation and evolution of these dynamic networks. Before we jettison an approach that has been largely successful, we need to think seriously of the consequences of stepping off such a momentous precipice. If the ends are more innovation and consumer benefits, then the means of more spectrum and more regulation are at odds. As a result, the appropriate responses to each, at least for now, are polar opposites: hurry up - and wait.

Jonathan Spalter, chairman of the Mobile Future Coalition (www.mobilefuture.org), served as chief information officer at the United States Information Agency during the Clinton administration.

Follow Jonathan Spalter on Twitter: www.twitter.com/mobilefuture