The Senate Commerce Committee held its hearing on the upcoming 700 MHz spectrum auction today.
Though some Senators still seem to think of the auction as a way for the government to raise as much money as possible (like a complex bake sale with invisible cupcakes), other Senators demonstrated that they understand the tremendous impact this auction will have on the future of our country. Senator Inouye, Senator Rockefeller and Senator Kerry were especially supportive of the FCC using this auction to further the national goal of more broadband facilities and competition rather than merely to maximize short-term government revenues.
The Senators clearly appreciate the auction's ability to solve some of the biggest problems facing America today. US broadband penetration ranking is dropping rapidly due largely to the limited competition in the broadband market. This auction could pave the way for a much-needed third pipe that would compete with cable and DSL. However, if the FCC uses the same rules it has used in previous spectrum auctions, the incumbent broadband providers will be able to block anyone new from entering the market.
The auction also has the potential to open the wireless network to innovators and small businesses. Wireless providers currently have the ability to carefully guard what applications and devices run on their network. This makes the entire wireless network very difficult for innovators to access, especially if they wish to provide a service the wireless provider already offers such as voice, video or data. If part of the spectrum was sold with an open access requirement, incumbent wireless providers would be forced to compete with small businesses that wish to provide last mile connectivity to small geographic areas. Because devices and applications would no longer need to be approved before attaching to a wireless network, innovation at the edge of the network would proliferate.
Even if the auction greatly exceeds the projected revenue estimates, the auction will be remembered as a failure if it does not live up to its potential. Hopefully the Senator's support will be enough to convince the FCC to accept a short term, slight revenue loss for much greater long-term gains for our economy and our society.