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October 8, 2020
And now it appears that Trump's chaos style of government management has spread into the far corners of telecom policy, including the administration of spectrum.
According to several sources familiar with the issue, there is a debate raging within the Trump administration over how exactly to release the 3.45-3.55GHz band for 5G. The band is currently used by the US military, which has historically resisted any suggestion that it give up any of its spectrum holdings for any reason.
Recently, though, that situation has been slowly changing – but the problem now is that there is a loud, public argument going on about how exactly the Department of Defense should reallocate the 3.45-3.55GHz band for 5G.
On one side of the debate stand wireless network operators like AT&T, officials from the FCC and members of the Trump administration like White House Chief Technology Officer Michael Kratsios, who want the DoD to give up the band so it can be auctioned. This aligns with the traditional model of spectrum administration by the US government that has been used for decades.
On the other side of the debate stand some DoD officials, startups like Rivada and members of the Trump administration like Chief of Staff Mark Meadows, who want the band to be managed by the DoD and potentially "leased" to the 5G industry on a wholesale basis. This would represent a dramatic upheaval to the status quo, to put it mildly. And if this proposal is codified, it would require US wireless network operators to go directly to government agencies like the DoD for their spectrum needs, rather than getting it outright in FCC auctions.
Thus, at stake in this very public debate are the basic regulatory underpinnings of the entire US wireless industry.
Two proposals, one band
The Trump administration announced in August an agreement with the US Department of Defense to release the 3.45-3.55GHz band for 5G. "The Federal Communications Commission will auction the spectrum after service rules are adopted," according to the White House press release.
According to sources familiar with the situation, the breakthrough proposal was shepherded by White House Chief Technology Officer Michael Kratsios under the auspices of America's Mid-Band Initiative Team (AMBIT).
The FCC just a few days ago voted to begin the process of auctioning the band.
And that's why a recent DoD Request for Information (RFI) focusing on the exact same band was so perplexing. Released just a few days before the FCC's vote, the DoD requested information on how it might "lease" the 3.45-3.55GHz band to the wireless industry for commercial 5G services.
According to sources familiar with the situation, this rival proposal for the band is being pushed by Trump's chief of staff, Mark Meadows, and enjoys support from a wide range of luminaries including Google's Milo Medin, former Google chairman Eric Schmidt and longtime GOP strategists including Karl Rove and Newt Gingrich.
Ominously, DoD CIO Fred Moorefield reportedly suggested that the proposal could usher in the end of spectrum auctions in general.
Now here's where the story takes a strange and complex turn. The DoD's RFI to "lease" its spectrum aligns very closely with what startup Rivada has long been pushing. Indeed, Rove is a lobbyist for Rivada, and has reportedly lobbied Trump's chief of staff on the topic.
Perhaps the clearest look at Rivada comes from a 2019 article on the company published by The New Yorker. Fronted by a litigious, enigmatic Irish businessman named Declan Ganley, who made an early fortune trading forestry holdings in Russia and aluminum in Latvia, Rivada for close to two decades has been working to encourage the creation of wholesale wireless networks in countries ranging from Iraq to Mexico.
Importantly, Rivada bid against AT&T for the US government's lucrative FirstNet contract, a project designed to build a nationwide wireless network for public-safety users. Rivada went so far as to add high-profile governors like Jeb Bush and Martin O'Malley to its board in order to juice its efforts, but it was eventually barred from the FirstNet process due to a "substantial number of significant weaknesses and deficiencies" in its proposal, according to the Department of Interior.
So is Rivada interested in the DoD's new RFI to "lease" the 3.45-3.55GHz band? "We plan to respond to the RFI, yes," wrote Rivada spokesperson Brian Carney in response to questions from Light Reading.
And what of Medin, Schmidt and Gingrich? Are they also on the Rivada payroll? "We do not have a commercial or lobbying or investor relationship with Newt Gingrich, Milo Medin or Eric Schmidt," Carney wrote. "They must just actually think that privately built, privately operated wholesale wireless is a good idea. Imagine that."
It's also worth noting that there are widespread rumors that the DoD is preparing a Request for Proposal (RFP) for the 3.45-3.55GHz project without waiting for the results of its already-released RFI. (One source said that Meadows is pushing the DoD to release the RFP but that Trump's secretary of defense, Mark Esper, has moved to block it.)
Not surprisingly, there's plenty of opposition to the idea that the 3.45-3.55GHz band be "leased" for 5G, potentially in a way that would be managed by a company like Rivada. For example, a group of powerful GOP senators last week urged President Trump in a letter to move away from the notion of a nationalized, wholesale 5G network for the US military.
But that effort apparently wasn't enough. Many of those same legislators this week introduced the "Beat CHINA for 5G Act of 2020" that would essentially require the FCC to auction the 3.45-3.55GHz band by December 2021. The legislation would prevent the DoD from leasing the band – and the introduction of the legislation appears to indicate the necessity of Congressional intervention.
More than 30 right-leaning groups cheered the move. "Taxpayers should not foot the bill for something that the private sector is already committed to doing through a free market approach," wrote groups including Americans for Tax Reform, the American Conservative Union and Heritage Action.
The US wireless industry also voiced support for the legislation. "The Beat CHINA for 5G Act rightfully focuses on the critical importance of private-sector solutions and auctioning commercial spectrum that will preserve the US as the leader in 5G," said Kelly Cole, the chief lobbyist for wireless industry trade group CTIA.
And AT&T's Tim McKone worried about "deviating from the proven path of auction and private sector-led 5G deployment" while cheering the legislation.
The chaos president
To be clear, turf battles among government agencies are nothing new. And critics at the FCC and elsewhere have long lambasted the NTIA – the agency charged with managing the usage of spectrum by government agencies including the DoD – as moving too slowly.
According to one source familiar with spectrum regulation, government agencies are clinging tightly to their allocations as the value of spectrum continues to rise. After all, the DoD's proposal to lease its holdings potentially would allow it to make use of 5G for "training, readiness, and lethality" while at the same time providing unused bandwidth for commercial applications – what some describe as a "win win."
But what's new here is that the debate has been swept up into Trump's chaos style of management. And Trump clearly sits at the center of the issue. The president in 2019 said a nationalized, wholesale 5G network "won't be nearly as good, nearly as fast." But one of the 51 items on President Trump's re-election platform is to "establish a national high-speed wireless Internet network."
This highlights one of the basic elements of Trump's administration: an inability to select one course of action, thus making everything more difficult.
"The most obvious takeaway from all of this is that our government is a mess," wrote the financial analysts at MoffettNathanson in a note to investors this week regarding Rivada and the DoD's proposal. "The whole story smacks of cronyism at best and reeks of 'the swamp' at worst. And by any reading, that all of the branches of government are working against each other is chaotic and incoherent. For all the talk about what changes a Blue Wave might bring, it is the status quo that is more uncertain, at least from a telecom perspective."
But this is the way Trump wants it.
C'mon, feel the rage
"With the president, there's a hundred different shades of grey," explained Jared Kushner, Trump's son in law and a senior advisor to the president, in Bob Woodward's new book on Trump, Rage.
Continued Kushner: "And if people try to get a quick answer out of him it's easy. You can get him to decide in your favor by limiting his information. But you better be sure as hell that people with competing views aren't going to find their way to him. And when that happens, he's going to undo his decision."
Writes Woodward: "Where others saw fickleness or even lies, Kushner saw Trump's constant, shifting inconsistency as a challenge to be met with an ever-adapting form of managing up. Incomplete information, inadequate staffing – the appearance of impulsive decision-making was all someone else's fault, according to Kushner."
But Woodward also quotes other administration officials – those not related to the president – as offering more critical appraisals of Trump's management style: It's "crazytown," according to John Kelly, Trump's former chief of staff.
Editorial Director, 5G & Mobile Strategies, Light Reading
Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.
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