Those who want to auction every last hertz of spectrum overlook two basic economic facts about unlicensed spectrum:

First, if spectrum is as valuable as mobile carriers claim it is, reducing the amount of spectrum available for auction by dedicating some of it for unlicensed use should drive up the price of the remaining auctioned spectrum. So designating some unlicensed spectrum will not reduce proceeds delivered to the Treasury. Given the inelastic demand for spectrum, the price increase for the spectrum that is auctioned will result in no loss of revenue. Some of the spectrum that is likely to be useful if set aside for unlicensed use is not likely to fetch much of a price at auction (e.g. the “duplex gap”) because it is not suitable for high power 4G (LTE) wireless networks.

Second, unlicensed spectrum is the most valuable part of the wireless broadband product space by a wide margin. It supports half the traffic delivered to consumer smartphones and tablets and is the final link to the consumer for one quarter of all traffic flow delivered to users with fixed, wireline broadband. The massive amount of economic activity in the unlicensed space generates huge economic value, which in turn maximizes large tax revenues for the federal government.

Those who think that more unlicensed spectrum will lead to “free” Wi-Fi also overlook basic economic realities. Even though unlicensed spectrum is very good for consumers and the economy, it is important to recognize that not paying money at auction to gain access to unlicensed spectrum does not mean that it is free to put it to use. Quite the opposite is true. There are real costs involved in moving the exaflood of bits to and from an unlicensed hotspot. There are real costs in building and acquiring the equipment that will receive the data transmissions and to manage an unlicensed wireless network. If you talk about service for hundreds of millions of people in the U.S. and billions globally, one thing is certain — if the cost of building and operating an unlicensed network are not recovered from consumers, the network will not be built or operated.

A substantive debate on spectrum policy is a good thing. The clash of ideas will produce better decisions at the FCC. But let’s all take a deep breath and get our facts straight. A hundred years ago, public policy to allocate spectrum concluded that interference could only be controlled by giving a small number of broadcasters exclusive licenses to operate in specific frequencies. Twenty years ago, the FCC decided to try a radical new approach by allowing anyone to transmit signals into spectrum that had been considered garbage, as long as they adhered to simple technical rules. We now recognize that this radical decision led to modern-day Wi-Fi. The remarkable success of Wi-Fi demonstrates that hotspot operators and consumers will willingly pay hundreds of billions of dollars to build and use the Wi-Fi infrastructure even without the ability to exclude others granted by a license — and they are likely to do the same for the FCC’s more recent innovations related to unlicensed use between TV channels, and new unlicensed designations in the 600 MHz, 3.5 GHz and 5 GHz bands in the future.

Could new, unlicensed designations lead to new competition for cellular wireless broadband service? Maybe, but the important point is that it will be an important input to the wireless broadband space, particularly the Internet of Things that connects hundreds of billions of objects.

There are two extremely important lessons to learned from the remarkable success of unlicensed spectrum.

• Policy should expand possibilities, not foreclose them.
• Having dramatically different business models occupy a single product space spurs and maximizes innovation and efficiency.

It would be a huge mistake to try to pick winners and losers by favoring cellular licensed service to the exclusion of unlicensed spectrum.

Mark Cooper is the Director of Research at the Consumer Federation of America and a fellow at the Donald McGannon Center for Communications Research at Fordham University.

The study, conducted last September, found most companies offer download speeds during peak periods that roughly match what they advertise. Verizon Communications Inc.’s fiber connection, the company’s fastest, averaged download speeds that were 118 percent of advertised download rates. Cablevision Systems Corp. came in at 115 percent and Comcast Corp. delivered 103 percent, the report found.

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Brooke Hammerling

As was the case with Hurricane Sandy, local officials are using a relatively new wireless alert system to blast messages to those in the area where the storm is headed. Though similar to a text message, the alerts are actually a special kind of notification that the Federal Communications Commission has enabled for carriers that choose to participate.

It’s a modern-day update to the emergency alert system that has been used for decades on broadcast television and radio. It allows local, state and federal officials to send alerts about anything from severe weather to a terrorist attack.

Though similar to text messages, the emergency alerts are actually shorter (a maximum of 90 characters) and come with a special alert tone designed to distinguish them from other messages. According to the guidelines, the messages are to be used only for presidential alerts, Amber alerts or imminent threats.

We had a chance to see the system in action as it was being tested during a visit to T-Mobile’s labs last year and also received an alert firsthand on a Verizon iPhone 5 just as Hurricane Sandy was headed our way during the preparations for Dive Into Mobile.

As one of our commenters, Tim O’Brien, noted, it’s nice if you know about the system before you get one of the alerts. “Would have been nice to know about the warning system ahead of time. Scared the shit out of me. Thought my phone was going to auto destruct.”

Here’s a video of the system being tested at T-Mobile’s labs near Seattle.

The FBI and Homeland Security Department “are currently reviewing this matter for any national security, law enforcement, and public safety issues but have not yet completed that effort,” a Justice Department lawyer said in a letter to the FCC.

“We therefore request that the Commission defer action until such time as the Agencies notify the Commission of the completion of their review and, based on the results of such review, request appropriate action by the Commission,” the letter continued.

Sprint, for its part, characterized the request as routine.

“This is a routine request when working with the [U.S. government] agencies regarding national security,” Sprint said in a statement.

The No. 4 U.S. carrier, T-Mobile, is already in foreign hands as a unit of Deutsche Telekom, while Verizon Wireless is partly owned by Vodafone.

The request from the DOJ was reported earlier Tuesday by Bloomberg. Dish Network, which like Sprint is bidding for Clearwire, has also asked the FCC to hold off on approving the Softbank deal.

Sprint is still aiming to close the deal in mid-2013.

First, the facts: Google last week submitted an application to the Federal Communications Commission, asking for an experimental license to create an “experimental radio service” with a two-mile radius covering its headquarters.

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In the filing, posted Thursday, Dish said many issues are unresolved in the acquisition review, which includes Sprint’s deal to buy the rest of majority-owned Clearwire Corp. Dish recently proposed a $3.30-a-share offer for Clearwire, above Sprint’s agreement to pay $2.97 a share, and says that uncertainty surrounding process could lead to major amendments to the Sprint/Softbank review.

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The American delegation tasked with defending the Internet’s flat, decentralized and globally unregulated structure was composed of a vast swath of government agencies ranging from the State and Defense departments to the FCC and White House National Economic Council. The delegation also encompassed a powerful tier of commercial representatives from preponderant technology companies like Google, Facebook, Microsoft and Cisco. In the months before the conference, the U.S. team was assiduously briefed on an array of hugely controversial proposals to regulate Internet content, impose tariffs on Internet traffic, and usurp management of the Internet’s technical protocols and address system. But no member of the delegation, not even the most seasoned veterans of such global negotiations, could confidently predict how the acutely contentious conference agenda would ultimately generate an acceptable international agreement.

“Consensus! Consensus! Consensus!” This was how an emphatic Hamadoun Toure, secretary-general of the International Telecommunications Union (ITU), promised to navigate world governments through the two weeks of talks, the first in history to debate the prospect of international Internet regulation. Delivering his opening remarks to more than 150 national delegations, Toure, an electrical engineer from Mali educated at the Moscow Technical University of Communications and Informatics in Russia, sought to assuage the palpable anxiety among many countries that the future control and governance of the Internet were at risk.

In the weeks before the conference, Toure had provided repeated assurances to the U.S. and other governments that the treaty under discussion in Dubai would hew carefully to established principles for the management of international telecommunications that have been in force for decades. The last time member states had debated the scope of the ITU charter was in the decidedly pre-Internet era of 1988. As the body convened 24 years later to modernize its rules and mission, the ITU’s culture of consensus, Toure seemed to be arguing, was the ultimate safeguard that a United Nations agency primarily dedicated to managing a largely anachronistic international telephony regime and radio spectrum would not aspire to exercise regulatory oversight of the Internet.

Toure’s promise of consensus came on the first day of the conference, during a plenary meeting held on Dec. 3, when all of the ITU member states patiently listened to a series of opening statements delivered to an attentive assembly convened in Dubai’s mammoth international trade center. It was a hopeful moment with thousands in attendance, many wearing the traditional national dress of the Arab world, Africa and South Asia. Within 10 days, however, the conference was on the brink of collapse.

The tipping point came after iterated sessions of grinding, tedious parliamentary skirmishing and maneuvering. With two days before a treaty was to be signed, and scant progress on the most consequential issues, the conference delegations were called into late-night negotiations. It was then, at about 1:10 am on Dec. 13, when Toure jolted a sleepy proceeding awake with a surprise intervention.

The hushed quiet of the plenary meeting that evening was the same it had been each day before. Hundreds of delegates sat at long rows of tables in a massive space the size of an airplane hangar. Strapped into headsets that transmitted the now deeply familiar voices of the U.N. translators interpreting Arabic, Chinese, French, Spanish, Japanese and English, the delegates listened in respectful silence, with the only noise emanating from the floor being the tap-tap-tap of countless laptop computers transmitting live color commentary and email exchanges about the historic debate. Walking through the cavernous meeting room for the plenary sessions, studiously quiet except for an occasional muffled cough, one would have assumed that a gigantic standardized test was being administered, a global LSAT or GRE exam.

Into this environment of perfunctory calm swooped Toure, prompting conference delegates to consider a resolution calling on the ITU and its member states to play an enlarged role in “international Internet governance and for ensuring the stability, security and continuity of the existing Internet and its future development and of the future Internet.” It was precisely the sort of provision, recycled from a prior U.N. conference, that Toure had promised would not divide his gathering, the World Conference on International Telecommunications (WCIT).

One of the senior American negotiators, Dick Baird, a career State Department official with an elegant mastery of the ITU’s arcane procedural and political machinations, jumped in swiftly. Always the diplomat, Baird cloaked his skepticism with courtesy. “We are concerned about this resolution because it begins to be — it is a resolution about the Internet.”

The conference chairman, Mohamed Nasser Al-Ghanim of the host United Arab Emirates, responded incredulously. “I’m so surprised to hear this, while yesterday I thought we have reached a consensus,” he said. This premise — that a secret deal had been brokered to expand the U.N.’s authority over the Internet — would engender continued bitterness and confusion long after the conference. The notion that the U.S. and its allies in the Americas, Europe and Asia had agreed to empower the ITU to have even a whisper of authority over Internet governance was baffling. Rejecting that effort was the most consistently articulated priority of the U.S. team and its top allies. Chairman Ghanim nonetheless sought to force the issue by preempting debate. “I think I’m going to stop this discussion at this point,” he casually pronounced, “because we are not moving forward.”

Yet the discussion continued. Toure took the microphone. “It’s not a crime to talk about the Internet inside the ITU,” he insisted. Toure launched a rambling defense of his resolution, his emotion rising and his argument splintering into incoherent fragments. “There is nothing wrong with this. Please, we are trying to build bridges so we work together so the consumers benefit better. Please, everybody, help us to continue to build that bridge.” Toure added: “The future is broadband, and the future is Internet, and the future is Internet, and the future is broadband Internet.” He was now pleading with the delegates for their support. “Trust me,” he implored.

In the next few minutes, the conference imploded. A series of countries endorsed Toure’s resolution, with South Africa, Cuba, Nigeria and Saudi Arabia taking the floor. The chairman called for a show of hands to measure support for the resolution. “I want the feel of the room,” he offered innocuously. According to the ITU’s procedures, the chairman had the prerogative to seek a simple show of hands — little placards, really — to assess the weight of opinion on a given issue or provision. And he also could interpret that expression opinion, known as the “temperature of the room,” according to his own discretion, which is precisely what Chairman Al-Ghanim did. “You can lower your plate now,” he stated coolly from the dais. “The majority is with having the resolution in.”

Mass confusion erupted from the plenary floor. The delegate from Spain spoke on behalf of the dozens of member states deeply confounded by the procedural sleight of hand that apparently had just legitimized a role for the U.N. in the governance of the Internet. “I would like you to clarify whether the temperature you were taking was simply a taking of the temperature,” he asked, borrowing from the arcane conference nomenclature.

“No it was not a vote, and I was clear about it,” Al-Ghanim replied. Although it was not voted on, the resolution was nonetheless adopted at the discretion of the chairman, its language to be incorporated into the final treaty text. “We have reached the end of the time,” said the chairman. “Thank you, and have a good night.” According to the official transcript of the proceeding the plenary session then concluded, at precisely 1:31 a.m.

The conference’s fate was now sealed. It would likely end in angry discord because the red line of Internet governance had been crossed. Before the formal debate was concluded other Internet provisions were crammed into the treaty, dangerous precedents recently enumerated in a news analysis for the Financial Times. At the insistence of Russia, China and several Arab states, the new treaty includes a provision mandating coordination on cybersecurity, defined euphemistically in the treaty as “network” security. The treaty calls on the U.N. International Telecommunications Union (ITU) and its member states to accede to vague commitments that experts fear may evolve into an effort by state governments to engage in the global surveillance of Internet traffic.

Encouraged by African states and supported by countries such as Iran and Saudi Arabia, the treaty creates a requirement that member states seek to defend against Internet spam, which is imprecisely defined as “unsolicited bulk electronic communications.” Critics of the provision noted that spam is easily managed by commercially prevalent software programs, and warned that the expansive definition it applied could be appropriated as a tool to censor content on the Internet ranging from political speech to Web advertising. Yet that vague definition was more than satisfactory for some of the member states. “Spam is spam!” the delegate from Iran complained. “I don’t need a definition!”

Finally, the scope of the treaty and the entities to which it could be applied was never clarified. Under the treaty’s fuzzy language, its jurisdiction could potentially be applied to Internet service providers, private networks, and even government networks.

When the full panoply of provisions relating to Internet governance was clearly defined, the U.S. signaled its refusal to sign the treaty. The U.K. and Canada quickly followed. Eventually, all of Europe refused to sign the treaty, along with Japan, Costa Rica, Australia, New Zealand, and Latvia. In total, 55 countries rejected the agreement.

Silicon Valley should take note of the international debate in Dubai. The collapse of the global dialogue about the future of the Internet foreshadows a conflict that will almost certainly accelerate in coming years. The Internet’s prevailing governance paradigm revolving around the private sector, technical cooperation, innovation and multi-stakeholder management will be increasingly challenged by world governments. Why? The Internet is simply too consequential a strategic and geopolitical resource for many global powers to not seek to control it. In that sense, Dubai was only the first battle in an emerging global contest to shape the future of the Internet.

The author is a managing director at Silver Lake, and served as a member of the American delegation to the World Conference on International Telecommunications in Dubai. He writes in his individual capacity, and the views expressed here are his own.

The Federal Communications Commission late Tuesday said Dish Network Corp., led by satellite-TV pioneer Charlie Ergen, would be able to use a slice of the airwaves designated for satellite-phone transmissions to instead offer much more lucrative cellphone service.

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In a letter to the FAA Thursday, Genachowski urged the agency to “enable greater use of tablets, e-readers, and other portable devices” during flights. The FAA currently prohibits airline passengers from using electronic devices at takeoff and landing, presumably to ensure passengers are alert and paying attention during the most dangerous portions of the flight. The agency is currently reviewing the merits of that restriction and evidently Genachowski feels that doing away with it would be a wise move.

“This review comes at a time of tremendous innovation, as mobile devices are increasingly interwoven in our daily lives,” Genachowski wrote. “They empower people to stay informed and connected with friends and family, and they enable both large and small businesses to be more productive and efficient, helping drive economic growth and boost U.S. competitiveness.”

Who knows? Maybe that extra 20 minutes of in-flight gadget use will result in a massive boost in productivity.

FCC Chairman Julius Genachowski, along with Mexico’s Olavarria Tapia, will announce the project at a Washington, D.C., event. The move follows a U.S. effort announced in April to create a shared industry database to help prevent use of stolen devices.

In a statement, the FCC said that mobile theft is on the rise and noted there are reports that some devices stolen in the U.S. are being resold in Mexico and Latin America.

That makes Google the seventh-biggest lobbying spender out there, right after AT&T and the pharmaceutical industry.

Google’s previous largest year ever was 2011, when it spent $9.68 million. Its largest quarter ever was the first of this year, when it spent $5.03 million on efforts like defeating the SOPA anti-piracy legislation.

The big looming issue for Google now is an antitrust investigation being conducted by the Federal Trade Commission. Plus, there are lots of ongoing issues, like driverless-car testing and immigration reform.

As for some of its tech competitors, in the third quarter, Facebook spent $980,000 on lobbying, while Microsoft spent $1,860,000.

Meanwhile, Google his hired Austin Schlick, the formal general counsel for the Federal Communications Commission, to join its legal team, per Hillicon Valley.

The 69-year-old Mr. Karmazin said he would depart effective Feb. 1, a month after his contract expires. His exit comes as Liberty, which has raised its stake in Sirius to 49.6 percent in recent months, is awaiting clearance from the Federal Communications Commission for approval to exercise control.

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