Open Access: A Simple and Elegant Solution to the Broadband Competition Problem

I have written previously about the FCC's upcoming 700 MHz spectrum auction and how it could provide the best chance to create broadband competition for the foreseeable future. Towards that goal, Public Knowledge and its Public Interest Spectrum Coalition colleagues are asking the Commission to adopt a number of rules that will determine who can bid and under what conditions, as well as rules that will govern the operations of whatever entities win those licenses.

Perhaps the most important and most intriguing of the rules we are seeking would require that winners for half of the spectrum being auctioned be required to make access to the spectrum available to non-affiliated wireless service providers at wholesale prices. The prices would have to be reasonably non-discriminatory and made public. This "open access" model harkens back to the days when 6,000 Internet Service Providers competed for customers -- they were able to do so only because the law required telephone companies to open their wireline networks for use by competitors. But thanks to years of Bell company litigation and FCC deregulation, open access applies only very narrowly to incumbent telephone companies' copper wires in the United States, which means that it has virtually no impact on broadband competition (Earthlink is one of the few exceptions to that rule -- it provides service by accessing telcos' DSL networks).

The 700 MHz spectrum auction could go a long way towards rectifying that problem, and it can do so without some of the most contested requirements of wireline open access, for example, the requirement that incumbent telephone companies make pieces of their networks available to competitors. Open access to wireless broadband networks is simple and efficient, needing no special technology, and provides numerous wireless service providers that could never dream of winning spectrum at auction an opportunity to provide competitive and diverse services to consumers.

Here is a chart that shows you how it works.

Open Access Diagram

A spectrum licensee would be required to permit other wireless service providers (designated WSPs on the chart) to interconnect their services at any gateway (that is, at a point between different parts of the network) behind the antennas that transmit signals to customers. Permitting interconnection behind the antenna towers allows for a nearly unlimited number of wireless service providers and gives each and every service provider the maximum speed of the entire piece of spectrum. By contrast, if a licensee were to make capacity available to third parties in front of the towers, the service provider would only get the speed of its share of the spectrum. For example, if there is a 10 MHz piece of spectrum and the licensee made it available to 5 service providers, each would only get the speed and quality of a 2 MHz piece.

In addition to maximizing the possibilities for competition and new services and providing a higher maximum speed, this open access model is efficient for two other reasons. First, efficiency arises from multiple providers sharing a single set of antenna structures, base stations, backhaul networks, network management systems, etc. Second, this model permits full use of the spectrum without the need to mitigate interference among many individual service providers.

If you want to know more about the coalition's open access model, read this report (PDF) by Columbia Telecommunications Corporation, our engineers. If you are like me, you will be surprised by its brevity and simplicity.

Opponents will say that open access failed in the wireline world and that it should not be resurrected in the wireless world. But open access only failed because the incumbents litigated and deregulated it to death. It is ironic that those countries like England, France and Japan that have applied open access regulatory models to broadband now enjoy far faster broadband speeds at lower prices than does the U.S. Even British Telecom, which is the incumbent telephone provider in England, has learned to love open access and advocates for it in this country.

The 700 MHz spectrum auction is the right time and right place to bring open access back to the U.S. And it is the only way to guarantee new broadband competitors to the cable-telco duopoly.

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