Cicconi, Upton Question Genachowski Remarks on Spectrum Bill

"In our experience, anytime a regulatory agency seeks unfettered discretion, that is the best reason Congress should not give it to them,” Cicconi said. “The entire principle behind spectrum auctions is to allow free and competitive markets to work, thus ensuring that valuable spectrum goes to the most economically viable uses. This also provides maximum return to the U.S. Treasury. For the FCC to assert, in the name of ‘fostering competition,’ that it should have final say on which companies can bid on spectrum is for them to engage in picking winners and losers. That is not the job of the FCC."

"Bluster aside, it sounds like we have a federal agency more concerned about preserving its own power than offering serious improvements as we prepare to finalize this legislation,” Upton said in a written statement. “We worked with the FCC’s auction experts to give the agency the legitimate flexibility it needs to design the mechanics of the auction. It’s time to stop the FCC from engaging in political mischief that will hurt competition and steal money from the taxpayer’s coffers.”

Kaplan noted that, “since the dawn of spectrum auctions, Congress has rightly recognized the need for the FCC to have appropriate flexibility to conduct them.” This “flexibility has been applied in 80 auctions generating more than $50 billion in direct money to the U.S. Treasury,” he said. The FCC’s “goal and intention is that every carrier -- big, medium, or small -- that needs additional spectrum should have a meaningful chance to bid for it,” Kaplan said. “Indeed, as the Senate spectrum bill recognizes, stripping this traditional authority for the first time ever would threaten the tremendous innovation and investment the FCC has helped foster in the wireless space during the last 30 years."

The 700 MHz auction result shows why Congress should be concerned, Upton said. “Don’t take our word for it -- look at the 2008 auction,” he said. “The FCC imposed conditions that ultimately prevented the D-block from selling and pushed smaller carriers out of the auction. Taxpayers lost somewhere in the neighborhood of $5 billion, and spectrum remains sidelined. And speaking of protecting taxpayers, it’s time for the FCC and others to be honest about how taxpayers would be affected by their plans to give away valuable spectrum to favored constituencies. Our goal is to strike the right balance by keeping plenty of opportunity for unlicensed use without forcing taxpayers to forfeit any return on a resource that everyone agrees is worth billions.”

T-Mobile broke with AT&T and supported Genachowski. “Spectrum is the ‘life blood’ of the wireless industry and in a world of scarce spectrum opportunities, it is vital the FCC, as the expert agency, have the ability to design auctions to ensure robust competition exists for consumers,” said T-Mobile Senior Vice President Tom Sugrue. “When it crafted the original auction statute 20 years ago, Congress wisely recognized the need to empower the FCC with authority to promote competition in its spectrum auctions, and that authority should not be undermined at a time when it’s more important than ever."

Genachowski is wrong to demand “complete discretion” from Congress to write incentive auction rules, Free State Foundation Randolph May said. The FCC’s “natural tendency is to want to use auctions to achieve certain policy predilections that it favors,” such as net neutrality, he said.