Traditionally, the legislative process has overlooked the value of the unlicensed spectrum and favored licensed spectrum. This is not because of some rancorous partisan divide. It’s not because of some unsavory battle between industries. Instead, it simply reflects the way the non-partisan staff of the Congressional Budget Office assign value to spectrum when it is licensed and sold at auction. As a result, bills that direct the FCC to sell licensed spectrum get high grades, while legislation that creates more spectrum for Wi-Fi get low marks.
This accounting method is outdated. It fails to take into account the economic activity Wi-Fi and unlicensed spectrum create every year. But we can address it if every time we identify spectrum to auction for licensed use, we also identify spectrum for unlicensed use.
A spectrum auction is a good thing, generally. Properly run, it allows a fair market value to be placed on private, exclusive use of an otherwise common resource, and it encourages rapid and intensive use of that resource once it’s sold – a company that pays billions of dollars for a small slice will want to generate a return on that investment as quickly as possible.
On the other hand, congress has a hard time quantifying that value. Lawmakers grab onto wildly inflated estimates of what an auction will bring, and then spend it several times over before a single dollar is collected. The current double-auction aimed at converting TV spectrum to mobile broadband use is a perfect example.
Rosenworcel is correct in focusing on the value of spectrum decisions to the overall economy, rather than on shortsighted, and overly optimistic, estimates of immediate income to the federal treasury.
On the surface, it’s a Catch-22 argument: Pai and O’Rielly are saying that since people who use unlicensed spectrum – Part 15 users, in FCC jargon – have to accept any interference they receive, interfering with them isn’t really interference. It’s tempting to write off the dissents as partisan bickering, but there are two important issues that should be addressed.
The first is whether unlicensed users can do whatever they want, without regard to other unlicensed users (interfering with a licensed user is absolutely forbidden – no one is arguing with that). Part 15 of U.S. telecoms law, the unlicensed spectrum part, says yes, the law of the jungle applies. But there’s another, more general section of the rules (section 333, if you’re keeping count) that flatly prohibits causing any willfull or malicious interference to anyone else who is using the airwaves legally. It’s an apparent contradiction that needs to be unambiguously resolved by the FCC.
The second is whether sending a digital authorisation signal to someone else’s WiFi device – electronically leaning into the middle of the conversation and saying shut up – is malicious interference, or just a rude but allowable use of standard protocols. It’s a digital dilemma posed by rules written in an analog age.
FCC staff made the proper call in this and other WiFi blocking cases, but Pai and Rielly are correct in saying that the commission needs to formally update and clarify its rules. With the looming prospect of mobile carriers using unlicensed spectrum to supplement their assigned frequencies – technological 500 pound gorillas jumping into a cage full of WiFi monkeys – these questions have to be answered once and for all.
The Enforcement Bureau’s investigation found that M.C. Dean engaged in Wi-Fi blocking at the Baltimore Convention Center on dozens of occasions in the last year. During the investigation, M.C. Dean revealed that it used the “Auto Block Mode” on its Wi-Fi system to block consumer-created Wi-Fi hotspots at the venue. The Wi-Fi system’s manual describes this mode as “shoot first, and ask questions later.” M.C. Dean’s Wi-Fi blocking activity also appears to have blocked Wi-Fi hotspots located outside of the venue, including passing vehicles. The Commission today charges M.C. Dean with violating Section 333 of the Communications Act by maliciously interfering with or causing interference to lawful Wi-Fi hotspots.
In August 2014, the Commission received an initial consumer complaint alleging that the Hilton in Anaheim, California blocked visitors’ Wi-Fi hot spots unless those consumers paid a $500 fee to access Hilton’s Wi-Fi. The Commission has also received Wi-Fi blocking complaints involving other Hilton properties. In November 2014, the Bureau issued Hilton a letter of inquiry seeking information concerning basic company information, relevant corporate policies, and specifics regarding Wi-Fi management practices at Hilton-brand properties in the United States. After nearly one year, Hilton has failed to provide the requested information for the vast majority of its properties. Hilton operates several brands, including Hilton, Conrad, DoubleTree, Embassy Suites, and Waldorf Astoria properties.
Hilton and M.C. Dean joint Marriott and Smart Cities, another convention center WiFi operator, which have been fined in the past. Anyone who travels a lot knows the frustration of hotel and convention center shakedowns: everything from so-called amenity fees that magically appear on your bill to overpriced food to extortionate Internet service. Mostly, it’s perfectly legal. But not where someone else’s wireless service is concerned. Control of real estate does not confer control of the airwaves.