More Incentive Auctions Likely After Success of First One, Quinalty Says
Future incentive auctions appear likely based on success of the TV spectrum auction, said David Quinalty, Republican aide to the Senate Commerce Committee, at a Duke Law School conference Friday. The incentive auction was the “most complicated auction in the history of humanity,” but it worked, Quinalty said. “We have a new tool, the incentive auction,” he said. “It has proven to be successful. … There’s no guarantee the next time it will work quite as well.” The bands that are most in favor change from year to year, but the need for spectrum doesn’t, he said.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Moving a band to auction still takes way too long, at least seven or eight years after the discussion starts, Quinalty said. The Affordable Care Act law took less than 18 months and a major infrastructure bill could get done in this Congress, but spectrum legislation takes several sessions to complete, he said. Members tried to streamline the process as part of the proposed Mobile Now (S-19) bill, but those efforts faltered, he said. “It’s actually really, really hard, as it turns out, to streamline policy.”
The incentive auction itself took too long and if the FCC runs another one, it needs to find a way of making it faster, said Charla Rath, Verizon vice president-wireless policy development. Carriers have experience with auctions, but the incentive auction had different rules and there were a lot of questions, she said.
Rath said Verizon looked closely on whether to bid and has been clear since on why it didn’t (see 1705120023). “We didn’t need to; we didn’t need this spectrum,” she said. Since 2009 and the first mention of a TV incentive auction, Verizon has become more focused on higher frequency bands, she said. Sharing in the 3.5 GHz band and elsewhere is also becoming a reality, she said. “Every company that participates in an auction makes a decision at a particular point in time what the relative trade offs are.”
The auction initially appeared to raise issues that were “pretty insurmountable,” said Steve Sharkey, vice president-government affairs at T-Mobile. “It was pretty daunting.” T-Mobile needed to hold many meetings with the FCC on the details, and staff was helpful, he said. “Now we just need to stay focused on the clearing,” he said. “The job is not done.”
T-Mobile sat out the 700 MHz auction in 2008 largely because it had just gone big in the AWS-1 auction, Sharkey said. The carrier always knew it needed low-band spectrum before it bought its first 700 MHz licenses in the secondary market, he said. “Our engineers found it was actually a much bigger difference than they anticipated in our ability to cover, provide services, to reduce churn, and keep and attract customers.” The company now has 31 MHz of low-band spectrum nationwide, with 25 MHz on average in the top 40 markets, 40 MHz in smaller markets, he said.
Dorothy Robyn, former commissioner at the General Services Administration, said she hopes the incentive auction will lead to future auctions where government agencies also get to keep a piece of the proceeds. “That is not the way it works,” she said. Federal agencies would be more motivated to give up spectrum if they got something back, she said. Robyn said the Federal Aviation Administration is hugely excited about the possibility it can upgrade its radar facilities through the Spectrum Relocation Fund if it gives up 1.3 GHz spectrum.
DOD appears less likely than in the recent past to be willing to give up some of its spectrum, Robyn said. “I don’t think this White House is as motivated as the last one was” to force DOD’s hand, she said. “Their contribution will be figuring out how to use spectrum that nobody else has,” she said of DOD. “Think of them as an engine of innovation as opposed to this recalcitrant spectrum hoarder.”