Leaders of the House Energy and Commerce Committee have rejected the ideas on incentive auction goals and procedures suggested by the Department of Justice and have written a letter to the five FCC commissioners urging them to do the same.
The DOJ suggestions involved making sure that smaller wireless companies have a chance to pick up low frequency availabilities. It proposed a variable regimen of “rules, weights and caps” tied to different auctioned frequencies, with a particular focus on low frequency spectrum.
The committee members, including Chairman Fred Upton (R-MI), Vice Chairman Marsha Blackburn (R-TN), Communications and Technology Subcommittee Chairman Greg Walden (R-OR), Subcommittee Vice Chairman Bob Latta (R-OH), Energy and Power Subcommittee Chairman Ed Whitfield (R-KY), and Rep. Billy Long (R-MO), found this odd since the two firms that DOJ seems to refer to declined to participate in an earlier auction feature space in the 700 mHZ band.
DOJ suggested that perhaps the biggest wireless carriers are not using frequency they already have, and said it that is true than the wisest use of auctioned frequency would be to get it into the hands of competitors. The members said this borders on the absurd since the FCC has testified all along that all carriers are facing a spectrum crunch.
Another DOJ suggestion to tailor the auctions with case-by-case provisions was criticized as adding extreme complication into a scenario that is already highly complex. In particular, they said that bidders and broadcasters should be encouraged to participate via the knowledge that participation will make economic sense.
In the letter to the FCC, the members wrote, “When Congress authorized the Commission in the Spectrum Act to conduct an incentive auction of broadcast spectrum, we had several goals in mind. We certainly wanted the Commission to design an auction that would make more spectrum available to wireless carriers to meet soaring demand for mobile broadband use. But, as is clear from the statutory language, we also expected the incentive auction to generate sufficient revenues to compensate television broadcasters that wish to voluntarily relinquish spectrum, to pay for the possible relocation of television stations that remain on air, to cover the cost of the auction, to contribute up to $7 billion toward the construction of a nationwide public safety broadband network, and to reduce this nation’s unacceptable budget deficit. The DOJ submission appears oblivious to these multiple goals.”
The members concluded, “We hope and expect that the Commission will implement the Spectrum Act as Congress intended. The spectrum vacated by broadcasters participating in the incentive auction should be available to any qualified bidder; the Commission should not pick winners and losers before the auction even commences.”