October 21, 2020 at 5:00 am ET
In recent days we’ve seen an all-out push to defeat the phantom menace of wireless “nationalization.” Democrats in the House have called for investigations. Republicans in the Senate have pledged to defeat this evil, and introduced legislation intended to block it. Op-ed writers, analysts and plain old reporters have been deployed to oppose it. Think tanks, especially supposedly free-market think tanks, have issued broadsides against the red menace redux.
We are not seeking handouts from the government. Or free spectrum. Or to seize the assets of private industry. Or to have taxpayers pay for, subsidize, own or control America’s wireless networks.
None of it is true.
The wireless industry is dominated by three big players. They buy up almost all the spectrum, they build networks where it suits them and don’t where it doesn’t. The FCC’s spectrum-auction process, which began as a great way to discover the highest and best use of a scarce resource, has been captured by the big carriers, and now serves merely to divide the spoils among the current winners. New entry into wireless via FCC auction is all but impossible.
Rivada invented a method for buying and selling network capacity at auction. Similar to the way electricity is bought and sold in many places today, or cloud-computing services make compute power available as a kind of virtual commodity, we could radically increase the efficiency — and value — of wireless networks by making all capacity on them available at the market-clearing price. All the time, and at prices that reflect network bandwidth’s value in a specific location. We call this Open Access Wireless, and the idea is to unleash a dot-com-like wave of experimentation in wireless business models, lowering prices while driving network utilization — and network coverage — much higher than today.
The big wireless carriers hate all this. They want to dictate price. They like a market with three more or less equally sized players, high barriers to entry and a regulator content to do their bidding on the big issues.
So when Rivada suggested that the government consider sharing spectrum that the private sector currently has no access to at all, an audacious lie of “nationalization” emerged.
Never mind that building privately owned networks, with private capital, sharing spectrum previously under total government control, is essentially the opposite of nationalization.
Never mind that the federal government nationalized all radio spectrum in 1927, and so every decision to use it, auction it, sit on it or do anything with it at all is an act of government control over spectrum. Never mind that, for this very reason, the carriers are routinely among the biggest spenders on lobbying and political donations in the corporate world. The carriers wrapped themselves in the preposterous flag of free-market purity, and all too many supposedly pro-market forces in Washington happily saluted.
Beltway insiders like to say you shouldn’t watch the sausage get made, because they’d prefer to work in darkness. But when the distortion is this brazen, it deserves to have some light shed on it.
Here’s what really happened, as far as I can tell.
In January 2018, someone leaked a National Security Council presentation to Axios. The leak came with a devastatingly effective bit of spin: The government wanted to “nationalize 5G.” We don’t know where that spin originated — neither the word nor the idea appears in the presentation itself. But we do know that America’s big wireless carriers have the most to lose from any disruption to their cozy oligopoly. And that they quickly went to work to fight “nationalization.”
Rivada had no involvement with the NSC presentation. We weren’t consulted on it, didn’t contribute to it, did not know it existed until Axios broke the story. But the big carriers linked us to it.
And ever since, they’ve pressed every opportunity to associate Rivada with the idea of “nationalization,” government-run wireless networks, government takeovers of wireless, government monopolies over 5G and so on.
The big carriers, in other words, anointed a scapegoat, and the crowds have gathered to see it sacrificed. They’ve convinced sources as diverse as Citizens Against Government Waste and The New Yorker to join their crusade. And precious few have ever asked us what we actually do. Those who have often treat it with skepticism when they report it — having been inoculated against the truth by a campaign of distortion.
One challenge Rivada has faced in getting its story out is that the influence of big-money lobbyists is just the water in which Washingtonians swim. When 19 senators sign a letter against nationalization — a measure opposed by multibillion-dollar multinationals — in a matter of hours, and introduce legislation opposing it within days, that’s business as usual. No one can see the strings. But a story about a entrepreneurial company with a big idea is somehow easy to recast as something nefarious, given enough PR pros and money.
It would almost be funny, if the stakes weren’t so serious. The bid to “nationalize” 5G may be imaginary, but the fight with China over the future of telecommunications is very real. And so far, with Big Wireless defending the status quo and proponents casting anyone who argues for a more innovative approach as socialists, Beijing is winning.
Mr. Ganley is chairman and CEO of Rivada Networks, Inc.
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