The Competitive Carriers Association late Wednesday praised Sen. Marco Rubio, R-Fla., for laying out plans earlier in the day for spectrum legislation (CD June 12 p15). “I completely agree that we must find ways to free up as much spectrum as possible by working collaboratively with federal users to support competitive carriers, and we must maximize the use of this limited resource,” CCA President Steve Berry said. “Having a pipeline of future spectrum auctions will only help open up secondary markets for competitive carriers and will provide additional opportunities for carriers to gain access to this much needed resource.” CTIA and PCIA also backed Rubio’s agenda.
Signs are that not only will SoftBank proceed with its buy of T-Mobile to merge it with Sprint, but the deal could force the FCC to delay the TV incentive auction, industry officials, including former regulators, tell us. Analyst Craig Moffett of MoffettNathanson Thursday gave the merger only a 10 percent chance of success, especially since the Department of Justice and FCC have both raised red flags (CD Feb 6 p1).
The U.S. wireless tower sector is likely to do very well over the next 12 months amid a confluence of telecom industry trends like increasing network expansions and network quality improvements, industry participants and observers told us. Those trends taken together are making the tower sector “as robust as it’s ever been,” said Clayton Funk, a managing director at broker Media Venture Partners. Wireless carrier consolidations -- such as a possible merger between Sprint and T-Mobile US -- will continue to be a top factor in the industry’s outlook, but not as large as in the past, observers said.
Communications Act Section 706 provides a framework “sufficient to give us the authority to adopt and implement robust rules” for net neutrality protections, FCC Chairman Tom Wheeler will tell the House Communications Subcommittee Tuesday, according to his written testimony (http://1.usa.gov/R185ns). The subcommittee scheduled an FCC oversight hearing for 10:30 a.m. in 2123 Rayburn, with Wheeler as the sole witness. Wheeler described the virtues of his net neutrality NPRM, begun last week in a 3-2 vote (CD May 16 ). “The Notice we adopted asks whether the best path forward is under Title II,” Wheeler said. “The entire purpose of an NPRM is to give Americans the ability to express themselves and provide analysis and guidance.” Wheeler’s 12-page testimony addressed many FCC initiatives, from process overhaul to spectrum auctions to retransmission consent. “We recognize the Subcommittee’s particular interest in ensuring that broadcasters found to be out of compliance with our rules have sufficient time to unwind the arrangements, and we look forward to working with you as these rules go into effect,” Wheeler plans to tell the subcommittee, referring to the lawmakers’ recent provisions in its Satellite Television Extension and Localism Act legislation. “The new rules apply only to JSAs [joint sales agreements], not Shared Services Agreements.” The GOP memo for the hearing outlined many issues that may come up and attacked the FCC’s attempts to overhaul its own processes. Since Wheeler’s testimony before Congress in December, “indications are that self-reform is in jeopardy,” the memo said (http://1.usa.gov/1o8a4Cq). “For example, early signs of retrenchment began with the release of a statement from the Chief of the Media Bureau announcing a new Commission policy with regard to broadcast TV transactions. As described above, this action, taken at the Bureau level, changed the official policy of the Commission without a vote or deliberation of the Commissioners.” The Democratic memo highlighted other key topics, such as E-rate overhaul and Comcast’s proposed acquisition of Time Warner Cable (http://1.usa.gov/1o8a4Cq). Democrats circulated a supplemental memo defending FCC spectrum aggregation policies planned for the incentive auction (http://1.usa.gov/1hYj8or).
CTIA and NTCA jointly asked the FCC to clarify that down payments and final payments in the AWS-3 auction will be due in early 2015. “It is unknown whether post-auction payments will be due in late 2014 or early 2015,” the associations said in an FCC filing. “This uncertainty will complicate bidders’ financial planning for the auction and their management of cash outlays, and could also affect their ability to finance their participation.” Under the Spectrum Act, the FCC must issue licenses for the AWS-3 bands by Feb. 22, 2015, they said, saying other aspects are unclear. “In recent FCC mobile wireless spectrum auctions, it has been typical for the auction to last one or two months, with the Commission issuing a Public Notice announcing the close of the auction,” they said. “The Commission has then set the ‘down payment’ and ‘final payment’ deadlines 10 and 20 business days after the Public Notice, respectively. Should the auction commence in October, it could close in mid-December. This means that both down payments and final payments for AWS-3 licenses could be due in 2014, both could be due in 2015, or one could be due in each year."
AT&T has done everything it can to make the TV incentive auction a failure, a year before it’s likely to start, T-Mobile Vice President Kathleen Ham said Wednesday during a media briefing on the FCC’s proposed spectrum aggregation and incentive auction rules. AT&T in particular was in the crosshairs of competitive carriers, but broadcasters also faced sharp criticism during the briefing. The event was hosted by the New America Foundation.
The House Communications Subcommittee received 58 responses to its Communications Act update white paper asking about spectrum policy, it said Tuesday, posting all of the comments in large batches on its website (http://1.usa.gov/1duRyNw). Comments were due late last month. Commenters included several stakeholders whose comments were already known, such as AT&T, CTIA, NCTA, NTCA, Sprint, T-Mobile and Verizon. Other commenters included Comptel, Microsoft, Motorola Mobility, Public Knowledge, Qualcomm, the Satellite Industry Association and the Utilities Telecom Council, who weighed in on myriad spectrum policy issues, from FCC structure and spectrum management to unlicensed spectrum to how the agency handles spectrum auctions. “The priority of the auction must be to ensure an adequately competitive environment for consumer wireless access nationwide,” Public Knowledge told Congress of spectrum auctions generally. “Any additional consideration of revenue, such as deficit reduction, has too attenuated an effect on the public interest to be taken into account. Auction revenue should be irrelevant.” Recommended approaches differed notably depending on the commenter. Congress “should consider using spectrum auction revenue to create an ‘efficiency endowment fund’ to cover agency costs to experiment with new technologies or systems that would enable them to relinquish Federal spectrum,” Mobile Future said. “Without such funding and targeted budgets for these initiatives, agencies have little incentive to incur the costs and risks associated with such system and process upgrades.”
T-Mobile closed Wednesday on its purchase of 700 MHz A-block spectrum from Verizon and is ready to deploy its first major chunk of low-band spectrum, T-Mobile US CEO John Legere said on a call with investors. T-Mobile reported record subscriber growth, adding 1.3 million postpaid subscribers in the first quarter, but Legere warned that T-Mobile is still much smaller than Verizon and AT&T, the nation’s two dominant wireless carriers.
Mobile Future filed a paper at the FCC questioning the net effect of bidding limits the Canadian government imposed in two recent spectrum auctions -- AWS spectrum in 2008 and 700 MHz spectrum this year. “The analysis concludes that exclusionary auction rules, such as spectrum set-asides or caps, prevent efficient competition and hinder investment in the state-of-the-art wireless networks and services that consumers are demanding,” Mobile Future said (http://bit.ly/1fltxzo). “These asymmetric rules essentially add up to public subsidies that are wasted on either established players who would have bid vigorously at full market value or lost to new entrants that, similar to the European experience with preferential rules, consistently fail.” The paper cites as an example Quebecor’s purchase of licenses outside its home market in Quebec. “Quebecor has made clear the spectrum, which had no other significant bidder, was acquired for its ‘advantageous price,’ with the CEO publicly stating that it remains uncertain if it would ’sit’ on the spectrum or ‘do something with it,'” Mobile Future said. “At this stage, few analysts expect Videotron, which is owned by Quebecor, to develop a network outside of Quebec."
The Minority Media and Telecom Council asked FCC officials to revise the agency’s designated entity (DE) rules in time for upcoming auctions, said a filing at the commission. “As a result of consolidation and an unstable regulatory climate after the 2006 DE Rule changes, DEs encountered, and continue to encounter, unique market entry barriers that prevent meaningful DE participation ... in spectrum auctions,” MMTC said (http://bit.ly/1m2Qk5H). “While the 2006 DE Rules were in effect, DE participation drastically declined. As the Commission prepares for the upcoming AWS and incentive auctions, it is critical for the FCC to send a clear signal to the wireless industry (and to the financial industry) that the DE program is important to the FCC and that the FCC is making improvements that will foster diversity and competition in spectrum ownership and provide the regulatory stability that is required for investment."