FCC Chairman Julius Genachowski and sole Republican Commissioner Robert McDowell have attended and addressed the GSMA Global World Congress in Barcelona, Spain, and both touched on the topic of spectrum reallocation. Genachowski is worried that the FCC won’t have enough spectrum to repurpose, and McDowell is worried that the FCC will layer on two many ground rules.
Genachowski’s said that the plan was to let market forces play in favor of progress, particularly by letting broadcasters agree to get out of the way of wireless broadband in exchange for a share of auction proceeds. “This solution would bring market forces to bear on spectrum licensees that have been shielded from competitive dynamics for years.”
He went on, “Incentive auctions are no longer just a proposal. Last week, President Obama signed legislation giving the FCC the authority to conduct the world’s first incentive auctions. We expect that this new form of spectrum auctions will eventually become a tool used by countries around the world, just like the original spectrum auctions.
Then Genachowski expressed his misgivings, saying, “That’s the good news. But the new law also raises concerns. It contains provisions that could reduce the amount of spectrum we would otherwise recover for mobile broadband and that could limit the potential benefits of incentive auctions to the mobile industry and mobile consumers.”
He concluded, “Our job at the FCC is to implement the law, and we’ll do so faithfully and expeditiously. Our staff of course has already begun studying the new provisions, and you can expect to see the agency taking concrete steps toward implementation in the near future.”
McDowell praised the move to put about 80 MHz of television spectrum on the auction block, but cautioned that any attempts to game the auction should be resisted. He noted how earlier attempts to engineer auction results has resulted in failure to achieve basic goals, citing in particular auctions of 700 MHz spectrum in 2008. He said it sought to attract new wireless competitors, increase small business licensees, lead to a national interoperable public safety network and enrich the national treasury, and in the end failed to achieve any of those goals.
He said, “The lesson learned from that auction and others is that when governments attempt to conduct social and economic engineering by foisting unnecessarily complicated mandates on the use of spectrum, their efforts frequently backfire. Private sector actors have a difficult enough time trying to predict market trends. Governments shouldn’t make matters worse for them. If nimble entrepreneurs swimming in the whirlpool of a dynamic marketplace have difficulty keeping pace with the rapidly shifting currents of consumer tastes and new innovations, how are inherently slow moving and inefficient governments better equipped to do so?”
He said the way to get it right this time is for the FCC to adopt a hands-off policy and let the market do its work.