FCC Wireless Bureau Chief Ruth Milkman defended a May 17 public notice seeking more information on a 600 MHz band plan following the incentive auction of broadcast TV spectrum, saying the notice merely explores issues on which the agency needed additional comment. The notice proved controversial and was the hot topic at the CTIA annual meeting held the week after the notice was published (CD May 24 p1).

T-Mobile offered counterarguments to a Georgetown Center for Business and Public Policy study which said if Verizon Wireless and AT&T were barred from bidding in the incentive auction of broadcast TV spectrum, auction revenue could be 40 percent lower than if they are allowed to bid (CD May 1 p12). The authors of the study “erect a strawman in which the Commission would entirely exclude AT&T and Verizon from the auction and, from this faulty premise, assert that auction revenues would be reduced by pro-competitive spectrum aggregation limits,” T-Mobile said Monday in a letter to the FCC. “In fact, no party has proposed to exclude AT&T and Verizon from the incentive auction.” T-Mobile said three of the authors of the study have done work in the past for AT&T. “Permitting the two dominant players to acquire all of the available 600 MHz spectrum would undermine the goal of limited government and, in particular, the successful model of the last 15+ years under which the wireless industry was allowed to operate on the basis of competition rather than intrusive regulation. Excessive concentration in spectrum resources, especially the critical lower-frequency spectrum, will entrench market power and diminish competitive pressure in the wireless industry, which, in turn, will lead to calls for undesirable government intervention over the terms and conditions of wireless service offerings,” T-Mobile said.

The “technically reasonable size” of a duplex and guard band as part of the 600 MHz band plan following an incentive auction of broadcast TV spectrum is 10 to 12 MHz, Intel executives said in a meeting with FCC Commissioner Ajit Pai and staff. Intel “also recommended that the FCC define the technical parameters for any services in the duplex gap and guard band in advance of the auction and a manner that avoids causing harmful interference to adjacent mobile licenses,” said an ex parte filing on the meeting (http://bit.ly/114TaHR). “Otherwise these adjacent channels would no longer be fungible with the other auctioned licenses. In general, Intel advocates that the FCC create auction and service rules that maximize flexibility for the marketplace to determine technology and service outcomes.”

Former Attorney General Dick Thornburgh endorsed a controversial Department of Justice report on spectrum aggregation and competition (CD April 15 p7), in a letter filed at the FCC by Sprint Nextel. “After reviewing the Department’s Ex Parte in this proceeding, I believe it is fully consistent with its longstanding approach to competition policy under Republican and Democratic administrations alike,” Thornburgh wrote. He was attorney general under Ronald Reagan and George H.W. Bush. “The DOJ filing properly draws upon decades of its antitrust policies and precedents in offering its comments,” he said (http://bit.ly/11fLSzO). “For the last 40 years, the Department has consistently supported public policies that promote competition and innovation in the telecommunications industry -- from the breakup of the Bell System in 1984 during the Reagan administration, to the allocation of new broadband PCS spectrum as competition to the old analog cellular duopoly during the George H.W. Bush administration, to challenges to proposed telecommunications mergers under the George W. Bush administration, to the Department’s exercise of its case-by-case merger review authority.” T-Mobile Vice President Kathleen Ham also defended the DOJ filing in a Tuesday blog post. “Importantly, DOJ did not argue that AT&T and Verizon be barred from the upcoming auction or that they be denied a chance to add to their low-band spectrum cache,” she said (http://bit.ly/17lFu2q). “T-Mobile, likewise, has made clear that its proposed spectrum aggregation rule would contain an exception allowing the dominant carriers to purchase 600 MHz licenses in every market even if their spectrum holdings are already in excess of the established cap in particular geographic areas.” That hasn’t stopped AT&T from going on the attack, Ham wrote. “AT&T nevertheless has begun an all-out campaign to quash any limits whatsoever on its self-perceived right to acquire any and all licenses so long as it has the money and power to do so, at the expense of competition and future innovation in the wireless industry,” she said. “At the same time, AT&T contends that the 600 MHz spectrum is really nothing special, and regulators have no need to worry about excessive concentration of the low-frequency licenses in its hands.”

T-Mobile doesn’t want to keep AT&T and Verizon Wireless from bidding in an incentive auction of broadcast TV spectrum, but merely to restrict any company from buying too much spectrum below 1 GHz, T-Mobile representatives said in a meeting with Wireless Bureau Chief Ruth Milkman, Gary Epstein, head of the Incentive Auction Task Force, and other FCC officials. “AT&T and Verizon’s presence in the 600 MHz band is important to T-Mobile because the two companies enjoy volume purchasing power, promote international standardization, and command attention from the global supply chain,” T-Mobile said (http://bit.ly/19CNgnH). “Without their presence in the band, T-Mobile’s equipment costs and product development cycles would likely increase.” But a cap still makes sense, T-Mobile told the FCC in an ex parte filing on the meeting. “The precise implications of the cap will vary depending on how much spectrum becomes available during the 600 MHz incentive auction and the concentration of a carrier’s holdings in a particular market, but AT&T and Verizon will likely be able to acquire substantial amounts of spectrum in most counties under reasonable spectrum clearing estimates,” the filing said. “If, however, the amount of spectrum recaptured is especially low, or if an incumbent’s below-1 GHz spectrum holdings are especially high in an individual market, then strict application of a one-third cap could prevent a dominant incumbent from acquiring spectrum in that particular market."

Former FCC Commissioner Robert McDowell warned that rules on the repacking of stations tied to the incentive auction of broadcast-TV spectrum raises the risk that the auction could be overturned in federal court. McDowell spoke Friday, less than a month after he left the agency, as a new Hudson Institute visiting fellow. He was interviewed by former Commissioner Harold Furchtgott-Roth, also associated with the institute. McDowell said it could take many months for the Senate to confirm Tom Wheeler as next FCC chairman, which could mean further delays in the auction if the agency doesn’t approve auction rules under acting Chairwoman Mignon Clyburn.

The FCC will make information on the incentive auction repacking available for “meaningful comment” this summer, said Assistant Wireless Bureau Chief Brett Tarnutzer. At an FCBA panel Thursday, he discussed several issues associated with the auction, including the recent public notice on the 600 MHz band plan and the commission’s reliance on TVStudy software to run the auction. Despite the complications inherent in the auction, the commission still believes it’s on track to release a report and order on it this year, and hold the auction in 2014, said Tarnutzer. “I believe we can do this."

The 600 MHz band plans proposed in a FCC Wireless Bureau public notice would promote competition among carriers and lead to more revenue for federal coffers than the plan endorsed by Commissioner Ajit Pai, NAB, AT&T and Verizon, representatives of several public interest groups said last week. Consumer Federation of America Research Director Mark Cooper and Public Knowledge Senior Vice President Harold Feld told us the “down from 51” plan endorsed by Pai, and by NAB and the two carriers in a joint blog post Wednesday (CD May 22 p4), would require higher relocation costs and lead to a concentration of the best spectrum in the hands of a few large companies. That’s as compared to the plans outlined in the May 17 public notice, said Cooper and Feld.

The 600 MHz band plan endorsed by the NAB, AT&T and Verizon is the one most likely to reduce revenue to the U.S. Treasury, said Public Knowledge Senior Vice President Harold Feld, in an ex parte letter filed with the FCC Thursday (http://bit.ly/16VDKNL). According to the letter, in a meeting Tuesday with Wireless Bureau staff, Feld said there is no consensus in favor of the “down from 51” plan, contrary to a statement by Commissioner Ajit Pai (CD May 21 p4) and a blog post Wednesday from the NAB, AT&T and Verizon endorsing that plan (CD May 22 p4). “Pai ignored objections to the AT&T/VZ/NAB plan and support from consumer groups (including Public Knowledge), competitors such as Sprint, or tech companies such as Microsoft,” said Feld in a post from his own blog, which is also referenced in the ex parte (http://bit.ly/13Mx7pT). Feld commended the Wireless Bureau for issuing a rulemaking notice to explore the different band plans. “The Public Notice issued by the Bureau enhances transparency and facilitates a full exploration of all possible approaches and their respect tradeoffs, creating a richer and more robust record for any ultimate decision by the Commission,” said Feld. Feld also spoke with Wireless Bureau staff about market variability and TV white spaces. “The problem in rural areas is not a dearth of licensed spectrum, but economic circumstances that make licensed wireless unprofitable,” Feld said. “Reclaiming vast amounts of rural broadcast spectrum would starve TVWS [TV White Spaces] and thus worsen, rather than alleviate, the problem of rural wireless broadband.” Feld said confining rural broadband to spectrum that isn’t used in large markets would make it difficult for licensees to purchase equipment, and they “would therefore face the problem faced by rural 700 MHz A and B block licensees denied interoperability today.” However, Feld said market variability could also prevent broadcasters from holding out for higher spectrum prices in the most congested markets.

LAS VEGAS -- Industry executives at CTIA’s annual meeting said it’s crunch time, as the FCC moves forward on developing rules for an incentive auction of broadcast TV spectrum, which could start as early as next year. Carrier and other industry officials said the industry’s anxiety level over the auction rose a little Friday with release of the 600 MHz band plan public notice (CD May 17 p1). None of the issues facing the FCC are looking easier to solve as work on auction rules go forward, they said.