At the Behest of T-Mobile, the FCC Is Undoing Rules That Make it Easier for Small ISPs to Compete With Big Telecom

Even as President Donald Trump spends his time promising rural Americans that closing the digital divide is a top priority, his agencies are taking steps that will only make that goal harder to achieve.

The Federal Communications Commission is currently considering a rule change that would alter how it doles out licenses for wireless spectrum. These changes would make it easier and more affordable for Big Telecom to scoop up licenses, while making it almost impossible for small, local wireless ISPs to compete.

The Citizens Broadband Radio Service (CBRS) spectrum is the rather earnest name for a chunk of spectrum that the federal government licenses out to businesses. It covers 3550-3700 MHz, which is considered a “midband” spectrum. It can get complicated, but it helps to think of it how radio channels work: There are specific channels that can be used to broadcast, and companies buy the license to broadcast over that particular channel.

The FCC will be auctioning off licenses for the CBRS, and many local wireless ISPs—internet service providers that use wireless signal, rather than cables, to connect customers to the internet—have been hoping to buy licenses to make it easier to reach their most remote customers.

“The vast majority of wireless ISPs are using unlicensed 5Ghz spectrum to connect the customer to their tower,” said Jimmy Carr, the policy committee chair for the Wireless Internet Service Provider Association (WISPA), a trade group representing wireless ISP companies. “5Ghz spectrum is great, you can pack a lot of data on it, but the problem is that it requires a true line of sight between the customer’s home and the tower. Any trees, any hills in the way and you can’t connect the customer.”

With midband spectrum, like CBRS, however, line of sight isn’t a problem. And because it’s licensed spectrum, wireless ISPs would be able to broadcast at a higher power.

The CBRS spectrum was designed for Navy radar, and when it was opened up for auction, the traditional model favored Big Telecom cell phone service providers. That’s because the spectrum would be auctioned off in pieces that were too big for smaller companies to afford—and covered more area than they needed to serve their customers.

“Say you’re a community college and you want to set up a secure LTE network on a licensed spectrum,” Carr told me. “In the past, you couldn’t do that, because you’d have to buy a third of the state’s spectrum in a license, when you only planned to use a small portion of that.”

But in 2015, under the Obama administration, the FCC changed the rules for how the CBRS spectrum would be divvied up, allowing companies to bid on the spectrum for a much smaller area of land.

Just as these changes were being finalized this past fall, Trump’s FCC proposed going back to the old method. This would work out well for Big Telecom, which would want larger swaths of coverage anyway, and would have the added bonus of being able to price out smaller competitors (because the larger areas of coverage will inherently cost more.)

So why is the FCC even considering this? According to the agency’s proposal, because T-Mobile and CTIA, a trade group that represents all major cell phone providers, “ask[ed] the Commission to reexamine several of the […] licensing rules.” Oh, also, it seems like doing smaller sized lots would be too much work.

“Licensing on a census tract-basis—which could result in over 500,000 [licenses]—will be challenging for Administrators, the Commission, and licensees to manage, and will create unnecessary interference risks due to the large number of border areas that will need to be managed and maintained,” the proposal reads.

Motherboard reached out to the FCC for comment but have not yet received a response.

The FCC is also considering other rule changes that would make it even more difficult for small ISPs to participate in the auction, such as extending the minimum license term from three years to 10. It’s a bit like a landlord requiring a business to sign a 25-year lease, which is obviously risky and expensive for mom-and-pop shops, but standard for chain stores and restaurants.

Wireless internet is far from a panacea for the digital divide. It’s not as strong or reliable as fiber to the home, and it’s worth noting that WISPA was in favor of the FCC’s decision to repeal net neutrality. But many community internet efforts have had success using wireless technology to bridge some of the gaps, and the CBRS spectrum promised to be a great opportunity for more groups to find space to send a signal. Wireless is one tool that can be used to help bridge the digital divide.

But if these rule changes go through (they’re still open for public comment until the end of January), it will be one less path to expanding rural internet, and one more win for Big Telecom.

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