Reverse Auctions Will Be ‘Neutral,’ FCC Officials Assure NARUC
The FCC will structure reverse auctions carefully so all carriers will have a shot at federal funding for broadband, Wireline Bureau Chief Sharon Gillett assured state regulators at the NARUC meeting Tuesday. “The intent is to be neutral,” she said. The commission’s recent rulemaking on the Universal Service Fund and intercarrier compensation asks broad questions about reverse auctions but is essentially neutral about implementation -- focusing on census blocs, for instance, instead of geographic alignment, Gillett said.
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Reverse auctions have become the go-to solution in telecom policy. The FCC is also considering a separate pilot program for the Mobility Fund. Sen. Jay Rockefeller, D-W.Va., has introduced separate legislation authorizing the auctions. The idea was embraced most recently by President Barack Obama, who last week said that such auctions could bring in some $28 billion for the Treasury. In a letter to Julius Genachowski published Monday, One Economy urged the chairman to use reverse auctions to improve the Lifeline/Link Up program.
On Tuesday, CEA and CTIA released a research paper claiming that the reverse auctions could bring in up to $33 billion. Jumping on the white paper, the High Tech Spectrum Coalition -- members of which include Cisco, Ericsson, Intel, Nokia, RIM, Qualcomm, the Information Technology Industry Council, Telecommunications Industry Association, and Semiconductor Industry Association -- called for “prompt action” from legislators and policy makers. The NAB thinks that “it’s hard to take seriously an analysis of broadcast spectrum values done by parties with a vested interest in forcing scores of broadcasters out of business,” a spokesman said. “It’s noteworthy that CTIA and CEA cavalierly suggest eliminating ’smaller stations in larger markets,’ which translates into fewer niche broadcast stations that serve important immigrant communities and religious audiences.”
Indiana Utility Regulatory Commissioner Larry Landis said he was worried the auctions’ rules could be structured to “pre-determine winners.” He said it would be easy to lock out competitors by structuring the auction geographically, or building in subtly exclusionary rules and guidelines.
Rural Cellular Association President Steven Berry is suspicious of CTIA’s numbers, he said. “It does seem convenient that the spectrum auction estimate is now worth $10 billion-$12 billion more than it was last year” in the National Broadband Plan, he said. The Congressional Budget Office should “carefully examine” reverse auctions, he said. “It appears that this new number also supports the Administration’s effort to give the D block and billions of dollars to public safety rather than encouraging much more cost-effective and efficient public and private partnerships to build broadband services for public safety users,” Berry said in a written statement. He’s repeatedly urged the commission away from reverse auctions, and said if the FCC proceeds with the plans, it should at least require interoperability and data roaming.
Asked whether the FCC was rushing out reverse auctions before testing them properly, Wireless Bureau Chief Ruth Milkman told us the proposed Mobility Fund reverse auctions are “on a faster track” than the proposed USF/intercarrier comp auctions. The commission is hoping to move to orders on the USF overhaul by the end of the calendar year, Gillett said.