The Trump Swamp Fights Itself Over Multi-Billion Dollar No-Bid Spectrum Grab

from the ouroboros-of-corruption dept

What does it look like when Trump's swamp devours itself? Look no closer than a battle between Peter Thiel backed Rivada Networks and incumbent telecom giants AT&T and Verizon.

Last week, anonymous "senior administration officials" told CNN that Rivada was lining up to grab potentially tens of billions in extremely valuable middle band spectrum via a no bid contract. The sources told the outlet that Rivada, which is financially and politically backed by Trump/GOP allies like Karl Rove, Newt Gingrich, and Thiel, is pushing to bypass the normal FCC approval process to gain access to a massive windfall:

"informed sources tell CNN that the White House is unquestionably pressuring the Pentagon to approve what would likely be, in the words of one senior administration official, "the biggest handoff of economic power to a single entity in history," and to do so without full examination of the impact on national security and without a competitive bidding process."

To be clear, Rivada's idea isn't necessarily bad. The company wants to share middle-band spectrum currently held by the Department of Defense to offer a wholesale 5G network. Rivada lost a bid to build the country's first emergency wireless network to AT&T, then sued (and lost). It has, quite correctly, been pointing out in recent years that the existing spectrum auction process tends to favor giants like AT&T and Verizon, something CEO Declan Ganley talked about again last week in a post at Morning Consult:

"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."

While this is sometimes correct (smaller players still do occasionally nab decent swaths of spectrum at auction), Rivada's decision to use guys like Karl Rove to try and hotwire Trump corruption to directly obtain a massive spectrum handout is possibly worse than the corruption its complaining about. So on one side you've got Karl Rove, Peter Thiel, and Newt Gingrich, and on the other you've got telecom operators like AT&T and Verizon, and the lawmakers paid to love them. Companies that are no stranger to Trump handouts and are immensely politically powerful because they're effectively bone grafted to our intelligence apparatus.

To scuttle Rivada's chances, it appears that AT&T and Verizon lobbyists have been making the rounds among gullible and patriotic natsec lawmakers, trying to claim that Rivada's DOD spectrum sharing plan is some type of some attempt to "nationalize" the nation's 5G networks (damn socialists!). While some dusty corners of the Trump administration simply discussed the idea of a nationalized 5G network, it was never likely here in the U.S. And Rivada has argued (probably correctly) the term has been used by incumbent lobbyists to undermine the company's efforts in DC and in the press:

"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."

The problem, again, is it's hard to portray yourself as the good guy in this equation when Peter Thiel, Karl Rove and Newt Gingrich are your primary pitchman in a quest to bypass existing processes -- and an open competitive bidding process (that while certainly skewed to favor deeper pockets, does include smaller competitors). It's just one of many examples of the Trump swamp fighting itself, despite nobody in the equation genuinely holding the high moral ground.

Filed Under: 5g, donald trump, fcc, karl rove newt gingrich, lobbyists, nationalizing 5g, no-bid contract, peter thiel, spectrum
Companies: at&t, rivada networks, verizon