Consumer Groups Tell FCC That Spectrum Auction Should Create New Competition

Consumer Groups Tell FCC That Spectrum Auction Should Create New Competition

Consumer Groups Tell FCC That Spectrum Auction Should Create New Competition

For immediate release
May 23, 2007

A group of public-interest organizations today told the Federal Communications Commission (FCC) that the auction early next year of desirable and useful spectrum should be structured to foster the development of high-speed wireless services to compete with the telephone and cable companies.

The groups filing as the Ad Hoc Public Interest Spectrum Coalition were (in alphabetical order): Consumer Federation of America, Consumers Union, EDUCAUSE, Free Press, Media Access Project, New America Foundation, Public Knowledge and U.S. Public Interest Research Group.

In its comments on the 700 MHz auction, the coalition said that the Commission should act “both to ensure that new spectrum is offered on an open and nondiscriminatory basis and to bring in new entrants interested in challenging the current cozy wireless oligopoly and broadband duopoly.”

The groups recommended several policies that should be implemented in the auction to improve competition, including:

1. Anonymous Bidding: Anonymous bidding prevents bidders from using signaling and blocking techniques during the auction to deter new entrants from participating. Anonymous bidding will both maximize the likelihood of new entrants and better ensure an appropriate return to the public for the use of valuable public licenses.

2. Exclusion of Incumbents or New Entrant Credits: Exclusion of existing incumbents remains the simplest way to create a class of new entrants able to compete with existing providers. Alternatively, a “new entrant credit” can make it possible for new entrants to compete against deep-pocketed incumbent rivals.

3. Band Plan Issues: The Commission should adopt band plans that facilitate creation of national providers to achieve necessary economies of scale.

4. Build-Out Requirements: Licensees should be subject to a “use or lose” license condition. At the same time, Commission should allow new entrants to demonstrate that failure to meet the service requirements result from genuine difficulties rather than from an intent to warehouse spectrum or leave rural areas unserved.

5. Designated Entities (DEs): The Commission should set rules limiting the relationships between small businesses that participate in the auction (labeled by the FCC as designated entities, or DE) and large wireless incumbents. Auction procedures often include provisions to increase the chances of small businesses to win spectrum licenses.

6. Open Access: The 700 MHz auctions will not give birth to the much anticipated third pipe if the licenses are auctioned to the very same vertically integrated telephone and cable incumbents that dominate the wireline market. At least 30 MHz of spectrum licenses should be conditioned on the licensees' obligation to make wholesale service available to any provider. This will guarantee that new entrants have the opportunity to enter the market in competition with incumbent providers.

7. Net Neutrality and Carterfone: All the licensees which win spectrum in the auction must be obligated to carry all Internet and voice traffic without privilege, degradation, or preference, and they must permit consumers to use any non-interfering equipment.

A summary of the comments is here

The full text is here

Members of the media may contact Communications Director Shiva Stella with inquiries, interview requests, or to join the Public Knowledge press list at shiva@publicknowledge.org or 405-249-9435.