Some Public Interest Groups say Wireless Bureau’s Proposed Band Plan Promotes Competition
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.
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"It benefits the Treasury, and it benefits the smaller wireless carriers if you don’t have a haves versus have-nots auction,” said Feld. An official in Pai’s office disputed those claims, saying the plan endorsed by the commissioner will lead to more spectrum being auctioned, therefore increasing revenue.
Feld said the plan in the public notice is friendlier to competition because it would create a more level playing field for spectrum. He said the “down from 51” plan would lead to some auction participants getting highly desirable spectrum, but leave others in the cold. “This is an opportunity to enhance competition in the marketplace, and AT&T and Verizon and the broadcasters are dead set against it,” said Cooper. “What the bureau tried to do is share the pain,” said Feld. “If everybody has the same problem, they can work together to fix that.” But Feld said large companies like AT&T and Verizon would rather see a plan that allows them to get the most desirable spectrum while “sticking the bad license with other people.”
An AT&T spokesman responded that the quality of the spectrum on offer was important to make the auction work. “A band plan must seek to mitigate interference challenges to the greatest extent possible while offering blocks of spectrum best suited for deployment by U.S. wireless carriers,” said Wednesday’s blog post that the spokesman referred us to. “Otherwise, it will drive down the value of the spectrum and likely undermine the auction’s success."
Scott Wallsten, Technology Policy Initiative vice president-research, said the “down from 51” plan won’t generate the most revenue for the Treasury, because that’s not a primary concern for companies participating in the auction. “These companies don’t care how much money goes into the Treasury” said Wallsten. A Verizon spokesman said the plan will maximize revenue because it will put the most spectrum up for auction, therefore attracting the most auction participants. The official in Pai’s office said the “down from 51” plan has the most industry support, which makes the auction more reliable in participants’ eyes. “Carriers will bid more if the plan is based on solid engineering principles and the consensus of carriers, broadcasters and equipment manufacturers is that the ‘down from 51’ band plan meets that task,” said the aide.
Wallsten said one reason there’s conflict over the band plan is that the auction has multiple goals, which all work against each other. He said the plan suggested in the public notice is an attempt to equalize them. “In this case, it’s not at all clear what you want to maximize. Revenue? Spectrum into the market? Post-auction competition?” asked Wallsten. “You can’t do all of those things, and the FCC is trying to figure out how to balance all of those objectives.”