Promoting Innovation at the FCC
In the United States, the Federal Communications Commission (FCC) must approve all new technologies or services that emit electromagnetic radiation — so, basically anything that uses electricity — before they can be offered to the public. There are very good reasons for this precaution, such as preventing cancer and harmful interference. But the process of obtaining FCC approval is typically long, arduous and fraught with uncertainty. Thankfully, the FCC is finally proposing to streamline and formalize this process.
Review of new technologies and services is governed under Section 7 of the Communications Act. This provision is barely 100 words long, but its message is clear: “It shall be the policy of the United States to encourage the provision of new technologies and services to the public.” Section 7 also provides a basic framework to review applications for new technologies or services according to that policy. However, the FCC has never codified specific rules to govern the Section 7 review process, forcing entrepreneurs to navigate a complex, opaque bureaucratic maze before they can bring their innovations to market.
Consider the recent case of LTE-U, a wireless technology developed by Qualcomm to increase spectral efficiency and provide additional throughput in unlicensed spectrum bands. Mobile carriers sought to deploy this technology in the United States as early as 2014, and internal tests showing that LTE-U could peacefully coexist with other unlicensed technologies, like Wi-Fi, were completed in early 2015. However, the FCC still had to take public comment on the matter. After concerns were raised by members of the Wi-Fi community, follow-up questions were asked, additional costly tests were done and a complicated pre-approval process was established. Final approval of LTE-U wasn’t issued until 2017, leading some carriers to pass on the technology and some industry analysts to question whether that three-year delay may have killed off LTE-U altogether.
The example with LTE-U isn’t even the worst of it. Another entrepreneur, LightSquared, sought to compete head-to-head with incumbent mobile carriers by launching an ancillary terrestrial component (ATC) to pair with its existing satellite network. LightSquared needed approval to modify its existing licenses, which was conditionally granted by the FCC in 2011 but rescinded after commercial GPS providers and the National Telecommunications and Information Administration (NTIA) complained of potential interference. That setback forced LightSquared into bankruptcy; its successor, Ligado Networks, is still waiting on FCC approval to this day.
Even if the FCC were to reject Ligado’s petition, it would at least have the opportunity to challenge that decision in court. Instead, the petition has languished for over seven years. The FCC has never given a final answer either way, so Ligado is still stuck in limbo. That’s simply unacceptable.
Some bureaucratic oversight is needed to ensure new technologies and services don’t harm existing users, but the FCC’s current Section 7 review is too complex, unpredictable and slow. This creates regulatory uncertainty that stifles, rather than encourages, innovation. Reforming Section 7 and codifying its processes may not save Qualcomm’s LTE-U or Ligado’s ATC, but it will ensure that future innovators won’t suffer the same fate of watching their prized new technologies or services wither on the vine while undergoing endless regulatory review.
