Rent-Seeking in Our Time, Part 1

It’s one thing to say the nation needs a faster wireless network. It’s another to demand the government hand you the spectrum purely on your say-so that you can build one. That essentially is the plan Frontline Wireless has cooked up. Reed Hundt, former chairman of the Federal Communications Commission, as vice chairman of the wireless start-up, has been evangelizing on the merits of a national high-speed wireless network that any device could access. By contrast, he calls the current GSM and CDMA cellular networks “pokey,” a value judgment, to be sure. Arguable as the data communications capabilities of wireless networks are, GSM EDGE and CDMA EV-DO, used by AT&T and Verizon Wireless, respectively, and worldwide by international wireless carriers, are commercial state-of-the-art. And it’s not as if Frontline is sitting on technology that’s ready to go. Hundt believes that Frontline’s simple claim of technical superiority should be good enough for it to get a pass at the FCC’s upcoming 700 MHz spectrum auction. Protesting that, as a start-up, it can’t compete against the financial resources of incumbent wireless companies in a straight-up auction, it has asked the FCC to exclude current license holders or, alternatively, set aside a portion of the spectrum for Frontline on “public interest” grounds.