5G Public/ Private Partnerships Versus Auctions

            A remarkable battle pits the Defense Department and the FCC/Congress on the best strategy to activate 5G wireless spectrum in the quickest time. Uncharacteristically, DoD wants to partner with the private sector in a 5G network that the private player builds and shares with Defense Department users who offer nothing more than an agreement to share previously dedicated, exclusive-use radio spectrum.  See https://www.wsj.com/articles/pentagon-opens-door-to-5g-network-shared-with-civilian-cellphones-11600686874.  AT&T cut a similar deal for a 5G network offering first responders prioritized access.  See https://www.firstnet.com/.  In both instances, private carriers secure access to spectrum on an expedited basis without having to compete in a usually much more costly and possibly more time consuming auction.  Government spectrum users get access to cutting edge telecommunications simply by agreeing to use new technologies that make sharing and prioritization of access doable.

            I cannot overemphasize the change in attitude by Defense Department spectrum managers who for generations could not tolerate the “national security risk” in having to share spectrum with other users.  The first crack in that attitude arose when launch companies succeeded in offering discounts for multiple-satellite payloads from both the private and public sectors.  Now, the DoD gladly accesses a turnkey 5G wireless network for nothing more than an agreement to share it with private users.  How progressive.

            Ironically, some federal government officials consider public/private partnerships a subversion of the marketplace, bordering on the S word: socialism.  Might their contempt result from the likelihood that less scarce 5G spectrum might fetch lower FCC auction proceeds?  Worst yet, I wonder if some stakeholders seek and benefit from an overall shortage of next generation wireless spectrum.

            If the paucity of spectrum became a glut, carriers could not longer charge above market rates.  Existing licensees, like the Dish Network, would have to “put up, or shut up,” no longer able to avoid fines for failing to install and operate the networks they touted as essential, but never got around to building.  Maybe the FCC would get serious about promoting facilities-based competition from new wireless carriers, by imposing caps on further warehousing by incumbents and by opening up new spectrum access options on an expedited basis. 

            Curiously, the FCC has no problem making public Wi-Fi spectrum available for use by private carriers, free of charge.  Would the FCC actually play it straight and honestly by promoting market entry by new carriers to match, or exceed the competitive pressure removed when TMobile acquired Sprint and lost its maverick disposition?

            Yet again, I see a massive gap between rhetoric and reality.  Libertarian free marketers appear unable to see the public interest benefit in public/private partnerships?  They would rather have the government ration and auction spectrum, no matter how long it takes?  Let’s add another p-word to the mix: pragmatism.