Don’t Changes Auction Process, FCC Tells Congress
The auction process is a “speedy, efficient mechanism for deploying spectrum” that has brought the govt. $26.8 billion while promoting the broadest possible participation, according to a letter the FCC wrote in July to House Telecom Subcommittee Chmn. Upton (R-Mich.) and provided to us. The FCC was responding to 20 questions on spectrum auctions submitted by Rep. Rush (D-Ill.) arising from a May 26 hearing on the draft House DTV bill (CD May 27 p1). Rush wanted in-depth information on FCC management of the auction process to determine how quickly the govt. can log revenue and see if changes were needed to widen participation by minorities and small businesses in the bidding process.
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Rush’s questions ranged from general queries about the number of auctions FCC has conducted (56) to steps the agency is taking to ensure efficient, productive use of spectrum. In response, the Commission said it uses competitive bidding and rules to “assure that licensed spectrum is put to its highest and best use.” In radio services not subject to competitive bidding, the FCC has adopted rules designed to ensure timely construction of facilities and to provide licensees with adequate spectrum for their stated purposes, the letter said. Flexible secondary market policies and new streamlined procedures allow licenses in certain services to be freely transferred to other qualified entities, the FCC letter said.
The FCC told Upton its current auction authority, which expires in 2007, is flexible enough to conduct the auctions in a “fair, objective, open and transparent process.” But if the authority isn’t renewed, the Commission “would lose an important tool” for recovering some of the value of the spectrum for the public and resolving mutually exclusive applications.
Rush pressed the agency to explain how many women, minorities and small businesses have won licenses via auction. The FCC said it hasn’t been required to report such data since 1995 following the Supreme Court’s decision in the Adarand case holding that all racial classifications imposed by govt. must be analyzed by a reviewing court under strict scrutiny. Before Adarand, the FCC said, it held 4 auctions offering 733 licenses. In those, 64 minority-owned bidders won 200 licenses, 73 women-owned bidders won 292 licenses, 16 minority women bidders won 59 licenses and 171 small businesses won 578 licenses. Post-Adarand voluntary reporting shows that in 52 auctions through which 27,716 licenses were sold 115 women bidders won 846 licenses, 122 minority-owned bidders won 832 licenses, 35 minority women bidders won 258 licenses and 1,094 small businesses won 15,428 licenses.
The FCC told Congress it assists women, minorities and small businesses in the bidding process by offering: (1) Bidding credits. (2) Adopting relatively small spectrum blocks and geographic license areas so smaller entities need not bid on licenses for more spectrum or larger areas than their business plans require. (3) Providing bidders assistance with staff to answer questions and pre-bid seminars that explain how the auction process works.