I wish I could get more excited by spectrum set-asides for new entrants. No, I am not talking about bad pornography- it is not that kind of excitement. I refer to the government’s announcement that new entrants will be favoured in the spectrum auctions, the goal being to encourage the creation of a fourth wireless carrier in most urban and suburban regions of Canada. I think there are far simpler ways of cracking this nut.
My concern for spectrum auctions is that it is underlain by the concept that the number of real competitors is limited to the number of competitors with “tubes” into the house or device. Three tubes -wireless or wired – and you have three competitors. Four tubes-four competitors.
The assumption is that each tube is owned from hardware through logical layer through applications by the owner of the hardware. It is the model we inherited from railways and it soldiers on like a Japanese officer living in the jungles of Luzon thirty years after World War 2 ended, more admirable for its zeal than for its effectiveness.
However desirable it is to have more carriers, it is a completely pre-Internet idea of communications. Spectrum set-asides are largely unneeded – under conditions I will describe – because the multiplication of “tubes’ is largely unnecessary.
This argument applies with especial force in the question of optical fiber into the home, the capacity of which is measured in terabits per second, but I think it also applies to wireless access, whose capacity is in megabits/second.
The assumption underlying the fourth carrier, as a policy idea, is that the owner of the spectrum may exclude any other reseller from using that spectrum. What did we have the recent hearing in mobile wireless sharing for, in that case?
The best answer to the problem of competition in wireless is to open their networks to resale and sharing. I recall the answer of Elliot Noss, President of Ting, the wireless reseller of Sprint bandwidth in the United States, to a question at that hearing. ‘Did he want to be a carrier?’. “No”, he replied, “I am happy to be an Internet service provider”.
Telecommunications policy is almost bereft of ideas, and the ones that graze on the plains of the Regulatorium are large, stupid, heavily armoured and live for hundreds of years. One of these days, before I die I hope, the thinking on telecommunications regulation will adapt to the reality of the Internet.
So while I applaud the Minister for his zeal in setting aside spectrum, I believe there are easier ways to shake up the Regulatorium than by multiplying vertically integrated wireless carriers. If he was signalling to the CRTC, well, it was an ambiguous signal at best.
Separate ownership of bandwidth from ownership of applications, people! Why is it so difficult for people to understand this idea?
That is a Doctoral thesis in the making.