O'Rielly, Pai Say Uncertainty Still Overhangs TV Incentive Auction
LAS VEGAS -- FCC Commissioners Mike O’Rielly and Ajit Pai told CES there are no guarantees the TV incentive auction will be a success. Commissioner Jessica Rosenworcel urged the FCC to release data on broadcaster participation. Earlier at the show, FCC Chairman Tom Wheeler projected confidence, saying all indications are broadcasters will offer spectrum for sale in every major market (see 1601060048). At the last CES a year ago, commissioners other than Wheeler discussed whether it was prudent for the agency to pause the auction, now set to start March 29 (see 1501080032).
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“I hope the incentive auction is a success, but the short answer is I don’t know,” Pai said. “We have made the auction more complex than it needs to be.” Some decisions remain to be made, including on the repacking software, which still must be tested, he said. The FCC doesn't want to see a repeat of the abuses in the AWS-3 auction “where there was abuse of the designated entity program,” he said. “Genuine small businesses” should be able to use the DE program to buy spectrum, but big companies shouldn’t be able to use it to “game” the auction, he said.
O’Rielly said he has no “inside information” on the auction. The FCC should release as much spectrum for auction as possible, he said. “My friends on Capitol Hill would love this to be successful, as I would.” If the auction is a success, he predicted another incentive auction will be held in five years or so, which will provide additional spending offsets.
“I’m very excited,” Rosenworcel said, saying the incentive auctions are the first of their kind in the world. “I think we’re going to have a terrific experience,” she said. Rosenworcel said she hopes when the window for broadcasters to apply closes next week, the FCC will release more information including “anonymized” data. “I think what we’ll be able to see from that demonstration is there's a lot of interest in this auction and that interest is the first step in having a good and productive auction and the first step in getting more mobile broadband into the hands of innovators in the 600 MHz band,” Rosenworcel said.
Commissioner Mignon Clyburn said she's also optimistic about the auction. “This optimism has not come without checks and balances,” she said. The FCC has created an auction design that should “ensure the possibility of robust participation no matter what size the entity,” she said.
Cable companies and other new market entrants are looking at bidding because there may not be a similar opportunity to buy spectrum, Clyburn said. “We're going to see, I believe, a lot of action, a lot of activity,” she said. The small license sizes offered should also mean lots of bidding, she said. “I think we’ll see a very robust auction.”
The incentive auction shouldn't be the “last opportunity” for companies to buy “beachfront” spectrum, O’Rielly said, disagreeing with Clyburn. “I think I used the word 'may,'” Clyburn replied.
Net Neutrality Questions
Pai also said almost a year after the FCC approved net neutrality rules the order has to be seen as a major distraction. No one knows for sure what will happen with the legal challenge to the rules, he said.
The FCC has numerous other issues to address -- wireless infrastructure, high-band spectrum, rural broadband deployment, poll attachment rules, Pai said. “This is a topic that’s really distracted the agency and consumed a lot of staff resources,” he said. People don’t want the FCC to “micromanage” the Internet, he said. “They want to know how are we going to get better, faster, cheaper Internet.”
“The only thing that’s guaranteed” by the rules is “we’re going to have uncertainty,” O’Rielly said. O’Rielly cited all the questions that have been raised about zero-rating, including the recent letters by Wheeler to AT&T, Comcast and T-Mobile (see 1512170030). ‘”That’s the uncertainty that we anticipated … many months ago and that’s what’s going to go on for quite a while.”
Clyburn praised CTA for setting up a special area on the CES show floor this year to show off devices for people with disabilities. But affordability remains an issue, Clyburn said. “Technology alone is not going to get us to the finish line.” If people “can’t afford to be online, they can’t afford the devices,” they won’t benefit from advances in technology, she said. The Lifeline program has a big role to play, she said.
“I’m happy certainly to have conversations on Lifeline,” O’Rielly replied. “I’ve been willing to have conversations for a long while on Lifeline, but I haven’t had too many takers on that.”
Rosenworcel said the FCC needs to do more to address the one household in three that doesn't have broadband. “When I was growing up, all it took to do my homework was paper, a pencil and my brother leaving me alone,” she said. “That’s no longer true. Kids today need broadband to be able to do their homework. In fact, seven in 10 teachers now assign homework that requires online access.”