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Ford Takes Regulator for a Spin in Pitch to Save Connected Cars

Todd Shields and Ryan Beene

(Bloomberg) -- Automakers won control over a choice swath of wireless spectrum 20 years ago on the promise of delivering safety innovations to vehicles.

Now, after failing to deliver widespread breakthroughs, they’re at risk of losing those frequencies to Comcast Corp. and other cable companies that say they can use them to offer robust Wi-Fi links to subscribers.

The years-long struggle between the industries is nearing an inflection point, with Federal Communications Commission Chairman Ajit Pai signaling he may consider new uses for the airwaves. Pai could announce as early as Tuesday that he’ll schedule a vote to re-examine the allocation at the commission’s meeting next month.

“The spectrum, for 22 years, has not reached its highest valued use, and that’s part of the reason why I think it’s important to have an open conversation,” Pai said at a Senate hearing last week. “I’m not saying what the answer should be, I’m simply saying let’s ask the questions that would enable us to have an informed conversation.”

That conversation has already kicked off a flurry of activity by stakeholders. A team at Ford Motor Co. gave Pai a ride in a specially outfitted F-150 pickup truck earlier this month. The idea was to demonstrate the technology that could, for example, warn of a scooter’s approach or judge when it’s safe to enter an intersection.

“Grateful to Ford for showing us a glimpse of the future,” Pai said in a tweet after his parking-lot spin. “It’s important to have an open conversation about the future of this band” of airwaves.

Ford and other carmakers including BMW AG and Toyota Motor Corp., don’t want to lose the rights they gained in 1999 from the FCC for a system designed to link cars, roadside beacons and traffic lights into a seamless wireless communication web to avoid collisions and heed speed limits.

Yet after nearly two decades, deployments have been few. An Obama administration proposal to mandate the technology in new cars has been left to languish under the deregulatory agenda pursued by President Donald Trump. General Motors Co. introduced the first factory-equipped model, a Cadillac sedan, just two years ago. And in April, Toyota scrapped plans to equip its cars with the systems starting in 2021.

Now even automakers are moving away the original system, and see greater promise in a newer method based on cellular radios -- the system in the F-150 that Ford showed off for the FCC’s Pai. Ford plans to begin equipping all of its U.S. vehicles with the systems starting in 2022.

That is an issue for carmakers as the 1999 allocation of airwaves by the FCC locked them into the system envisioned then. They need new rules to use a cellular system, which is backed by several companies including Ford, Audi AG and gear maker Qualcomm Inc.

Ford, in a statement, said it is “critical” for the FCC to allow the newer, cellular-based method to use the airwaves because it will become the dominant technology to connect vehicles, infrastructure and pedestrians.

Cable providers have pounced, characterizing the currently mandated system as fostering “two decades of stagnation.”

They’ve called for ending carmakers’ exclusive rights to the frequencies at 5.9 GHz and allocating all or most of the band to the Wi-Fi systems that carry web traffic for most cable customers.

Some consumer groups agree. They include the Consumer Federation of America, the American Library Association, Public Knowledge and the Open Technology Institute at New America.

“The best outcome for consumers is to move vehicle safety signaling to a different set of frequencies and allow next generation Wi-Fi to use 5.9 GHz,” Michael Calabrese, director of the Wireless Future Project at the Open Technology Institute, said in an email.

Pai controls the FCC’s agenda, and his impatience ushers in a moment of promise -- and peril.

“We could maintain the status quo” but “I am quite skeptical that this is a good idea,” Pai said in a speech last month to a gathering that celebrated the Wi-Fi signals used for connections in hotel lobbies, coffee shops and homes.

Pai said it would take a formal rulemaking to allow greater Wi-Fi use of the swath, or to let automakers exploit the band for the cellular safety system.

Skepticism has arisen within the Trump administration. Transportation Secretary Elaine Chao telephoned Pai to urge the FCC not to use its June meeting to commence its consideration of the airwaves, according to one official briefed on the matter who spoke on condition of anonymity because the conversation wasn’t public.

While Transportation Department officials haven’t advanced the previous administration’s proposed mandate, they want autos to hold onto the airwaves.

“Preserving the spectrum for transportation safety, which can save lives, is probably more important than slightly faster Wi-Fi,” Derek Kan, the Transportation Department’s undersecretary for policy, said in an interview June 3.

To contact the reporters on this story: Todd Shields in Washington at tshields3@bloomberg.net;Ryan Beene in Washington at rbeene@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman, John Harney

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