Briefings Starting on Most Contentious Part of Incentive Auction Rules
Briefings are getting started at the FCC this week on the second part of TV incentive auction rules set for a vote at the commission’s May 15 meeting, spectrum aggregation rules to be approved concurrent with auction service rules (CD March 10 p1), said agency and industry officials. Commissioners Ajit Pai and Mike O'Rielly are likely to raise objections with Chairman Tom Wheeler if he proposes rules that could limit bidding by Verizon and AT&T in what is expected to be a 2015 auction.
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The FCC Republicans are already concerned about aspects of the service rules, on which commissioners and industry groups were briefed (CD April 4 p1), agency officials told us. Auction design issues and questions about when the FCC would declare the auction complete are among the issues raising the most questions, said one official who noted it may be difficult for Wheeler to get to a 5-0 vote just on the service rules. But industry and FCC officials said rules could change once the five commissioner offices start discussions. “It will be a very busy five weeks,” predicted a broadcast industry lawyer.
Expanding Opportunities for Broadcasters Coalition Executive Director Preston Padden said Thursday the FCC is engaging in a very open process headed into the May vote on the auction rules. “Last week, at Chairman Wheeler’s direction, the FCC Staff briefed all stakeholders in the Incentive Auction proceeding (including public interest groups) on the content of the draft Report and Order -- even before that document was circulated to other Commissioners,” he said in an email. “Next week, all stakeholders are being invited back to meet with the Chairman for a last, best opportunity to argue for changes in the draft R&O. In 40 years of following the FCC I have never seen such an open and transparent process."
The fight over spectrum aggregation rules in the incentive auction, and potential limits on the ability of AT&T and Verizon to buy 600 MHz spectrum, started well before the auction was approved by Congress two years ago. The fight pits the two heavyweights against most of their smaller competitors.
In the most recent exchange, T-Mobile Vice President Kathleen Ham Thursday responded in a blog post to an earlier blog post by AT&T Vice President Joan Marsh (CD April 3 p10), who said limiting bidding would likely mean lower auction proceeds.
"AT&T has proclaimed as ‘fact’ that any reasonable limitation on its ability to roll up the remaining low-band spectrum that AT&T does not already control will somehow doom the upcoming 600 MHz incentive auction,” Ham said (http://bit.ly/1lNC2Cj). “The truth, however, is just the opposite: only an auction with broad-based participation will generate robust auction revenue and result in a competitive, innovative mobile broadband landscape that benefits consumers.”
The Competitive Carriers Association filed a letter at the FCC, posted Thursday, arguing that spectrum aggregation limits are critical. “By strengthening the role of small competitors in the market for wireless broadband services, reasonable spectrum-aggregation limits have the potential to extend the reach of broadband deployment, expand consumer choice, and accelerate the pace of technological innovation across the country,” CCA said (http://bit.ly/1eekLSN).
"The FCC has run a remarkably open and transparent auction proceeding for which they should be applauded,” AT&T Vice President Joan Marsh said in response. “The auction itself should follow that model. Auction restrictions will suppress bidding activity and revenue, as will discriminatory set asides which shelter from bidding competition large conglomerates like Deutsche Telekom and Softbank and their U.S. subsidiaries T-Mobile and Sprint. Given the revenue that will be needed to clear the high hurdles of this auction, an ‘all in’ approach is essential.”