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Pick Up On One and Let The Other One Ride

We should instead focus on doing whatever we can to spread high-speed connectivity everywhere and unleash its potential to create jobs and growth, improve such key sectors as education and health care, and empower individuals.
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There come times in life when we have to make up our minds, as John Sebastian sang with the Lovin' Spoonful frighteningly close to 50 years ago. Progressives are facing such a moment with regards to telecommunications policy.

One direction follows the lead of activists who worry that without "net neutrality," a non-competitive broadband world will lead the major broadband infrastructure companies to stifle the flow of Internet content and extract a pound of digital flesh from the content they do allow. It sounds romantic and epic -- the people standing up against the great forces that would stifle their voices, Liberty on the Barricades. Except there's no evidence that's going on.

Moreover, this kind of regulation risks -- in some variants, almost assures -- that the incentives to build more broadband infrastructure fade into nothingness.

The other direction is to adopt a new and better priority: to extend the high-speed net to all. That begins by acknowledging that our telecom sector has done everything we've asked of it. It's created jobs and growth in an otherwise listless economic environment by sinking tens of billions of their own dollars in to improving the ability of citizens to gather, communicate, and even access their basic needs such as health care and education. The broadband infrastructure suppliers are doing far more to facilitate diverse content than to thwart it.

If they ever change tack and stifle their competitors unfairly one day, we can readily use the anti-trust laws to whack 'em. But, in the meantime, we should instead focus on doing whatever we can to spread high-speed connectivity everywhere and unleash its potential to create jobs and growth, improve such key sectors as education and health care, and empower individuals.

To me, it's not a hard choice -- we can tilt at windmills, or we can expand the Promethean power of the Internet. But the Administration has been wrestling with this angel ever since it took office.

First, it came out with a well-conceived National Broadband Plan to get more people access to the high-speed net. But then it developed rules to implement "net neutrality," a principle that leads to a "one size fits all" Internet. That sounds fair -- until you consider it. "Neutrality" requires everything that travels the Net, no matter how important or valuable, to travel at the same speed and under the same terms -- be it my cardiac monitor's signal to a local hospital or a video of a cat playing the xylophone. It's a death sentence for competition and innovation.

But there is still time for Federal Communications Commission Chair Julius Genachowski to face this choice forthrightly and set the stage for a successful progressive telecoms agenda in the coming years. In the Broadband Plan, he took a decisive step in the right direction. He announced that, between now and 2020, he would bring 500 MHz of spectrum to market to help alleviate the growing spectrum crunch. And since then he's explored a variety of sound means to get this done: the greater use of auctions, which allow spectrum to go to the bidders who can get the greatest value out of it (as opposed to giving or denying it to specific companies as if he knew the outcome already); by encouraging technological advancements that allow for spectrum to be shared by several users; and by looking at the government give up spectrum it's now hoarding, not using.

The bigger picture is this -- wireless broadband is going from boy to man. It's getting faster, more available, and most importantly, is undergoing a spectacular virtuous circle in which better signal strength and faster signal speeds allow the consumer to have better devices (iPhones, Androids, pads and tablets, maybe even Blackberries if they can get it together), and great new services and applications. The latest example is the "cloud" -- if signal weren't improving rapidly, all clouds would bring would be rain. And wireless connectivity increasingly competes with wireline Internet as surely as mobile phones compete with their landline alternative.

Now that Chairman Genakowski has taken these first -- and important -- steps, he can build on his momentum by allowing for an active secondary market in spectrum. Why not allow companies to buy and sell these rights in order to get them to the consumer as quickly as possible?

In fact, the FCC has such a deal in front of it right now -- Verizon (full disclosure -- a company that is one of my company's clients) wants to buy a bunch of spectrum from some cable companies (such as Comcast and Cox) who considered getting into the business, bought spectrum, but have since demurred. Why not let Verizon use it if they won't?

And if this spectrum deal is approved by the FCC and the Justice Department, it will help T-Mobile swap spectrum with Verizon, enabling T-Mobile to compete with LTE in markets where it otherwise might not be able to.

So that's the choice. On the one hand, we can spend our time and resources coming up with rules that make the Internet something other than what it wants to be by imposing "neutrality" speed limits and prohibiting companies from offering new and premium services to consumers. Or we can flood the market with spectrum to ensure that it's competitive and that the cycle of stronger signal = better device = more apps and services = more growth and customer empowerment continues. If Chairman Genakowski moves decisively in the right direction, consumers, the economy, and the Chairman's Administration -- not to mention the Chairman's own legacy- - will be the winners.

Or, Mr. Chairman, as Yogi Berra said, when you come to a fork in the road, take it.

Ev Ehrlich is the President of ESC Company, a Washington, D.C.-based consulting firm that addresses economic and business problems. ESC Company has among its clientele firms from the telecommunications industry.