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June 02, 2007

Time to Write the FCC

Within the next month the Federal Communications Commission is very likely to issue final regulations governing the auction of valuable 700MHz spectrum, which, by law, must start at the beginning of 2008. Now’s the last chance to have a voice in this process and it’s worth taking a minute to respond.  This post has some suggestions for responses.

The good news is that the Commission recognizes that this auction is essential for helping improve broadband access in America in general and in rural areas in particular.  Moreover, the commissioners are close to unanimous in agreement that more competition in broadband access is the answer to our dismally poor ranking in broadband access compared to other countries. I posted previously about Chairman Kevin Martin’s comments; here’s Commissioner Michael J. Copps as quoted in the FCC request for input:

“Certain it is that we desperately need a third broadband pipe to challenge the current telco-cable duopoly in our metropolitan areas, as well a first broadband pipe in many rural areas. It is this duopoly and lack of rural availability that have caused the United States to continue its slide in the world when it comes to broadband—witness the OECD ranking that came out just the other day taking the United States from 12th to 15th among the nations. And as I have noted before, I don’t think any of us should be relying on wireless companies owned by wireline broadband providers to provide this much-needed competition.”

The rule-making has actually narrowed down to a few issues so comments will have the most effect if they address these issues and not others that have already been left on the table for another day.  For example, the spectrum WILL be sold and will NOT be made open spectrum (which I would have preferred); Congress has mandated that.  The current holders of huge swatches of current licenses (the wireless operators who are in turn owned by telcos) WILL be allowed to bid for more spectrum, but the terms under which they are allowed to bid are all important.  Unlike most issues before the FCC, there has been substantial public input and it seems to be having an effect.

Below my suggested text are some explanations and decoding which the FCC won’t need but may be helpful in deciding whether you agree with the positions I’m suggesting you support.

My suggested paragraphs below are for those of you who are not actively involved in this issue and aren’t about to study and suggest specific remedies.  If you choose to send some or all or some versions of these to the commissioners, you will be giving them valuable input on the goals you want them to achieve but not entering into the lowest level debate on how to achieve these goals. To email all of the commissioners, please copy this list of addresses into the TO: field of your email:

[email protected]
[email protected]
[email protected]
[email protected]
[email protected]

Re: 700MHz Auction Rules

To: Chairman Kevin J. Martin
Commissioner Michael J. Copps
Commissioner Jonathan S. Adelstein
Commissioner Deborah Taylor Tate
Commissioner Robert McDowell

Congratulations on recognizing how important this auction is in assuring both that Americans obtain broadband access equal or better to any other country in the world and that the benefits of broadband access be extended to all Americans regardless of whether they live in the city or the country.  The country will be strengthened socially, economically, and against all kinds of disasters when it is connected fully.

Congratulations also on recognizing that greater competition in providing broadband access is an essential mechanism for improving the quality and reach of broadband service in America. Please do NOT assume, however, that all that we need is a third competitor (which, as some of you have recognized in your comments, would be the FIRST competitor in many rural areas).  It is essential to structure the rules so that multiple competitors offering broadband access can emerge in every part of the country.

This valuable spectrum must be available to those who will make the best use of it; it must not be purchased by the incumbent wireline providers and then retired or used sparingly to prevent competition with their existing services; it must not languish unused even when its purchasers had the best of intentions. To this end, I support each of the following positions which the FCC has asked for comment on.

  1. Considerable amounts of spectrum in both the upper and lower 700MHz bands must be offered in geographies no greater than MSAs and RSAs.  This step will assure that those most willing and able to provide service in each local area are able to purchase the right to do so.  Moreover, this is not an undue hardship to those like Google who may become competitors on a national basis.  These new entrants in their filings have shown much knowledge of technologies which would let them assemble a national footprint with different frequencies available in each area.
  2. There must be an even shorter period than suggested by the FCC for “use it or lose it.”  There is great danger that this valuable public resource will go unused.  Three years should be the maximum time period allowed.
  3. Even where large regions are offered as a whole, “use it or lose it” must be enforced at the MSA and RSA level and not aggregated across the whole region purchased.
  4. Google’s proposal assuring dynamic resale possibilities should be adopted as either a specific rule or a clarification of existing rules to assure that bidders know that they will be able to innovate in ways to increase the yield and lower the price to end users of the spectrum they acquire.
  5. Rules defining “open access” should be adopted covering all spectrum purchased by substantial incumbents and, in any case, a minimum of 30MHz of the spectrum to be auctioned.
  6. Rules defining basic “Net Neutrality” should be imposed on all spectrum purchased by substantial incumbents.

Thank you for you consideration.

Crib sheet for comments:

  1. MSAs and RSAs are Metropolitan and Rural Statistical Areas.  There are hundreds of these in the country, three in Vermont alone.  The major telcos would  prefer to buy the whole country at once or huge regions.  When they do this, history shows that only the largest markets get service quickly and rural markets get service never.  It is desirable to let large competitors as well as small competitors to the mega telcos emerge; but modern technology makes it possible to patch together a national network even if you end up with different frequencies in different markets.
  2. The right to use these frequencies is being auctioned off but they are a valuable national resource.  The right NOT use them should NOT be for sale.  The position I’ve taken is extreme and unlikely to be adopted but the more pressure on the FCC for a short period the better. 
  3. The FCC has indicated a willingness to apply performance criteria on a local level even when the region purchased is large.  They need support here against those who’d like to warehouse frequencies
  4. I posted more discussion of the Google proposal here.
  5. More on “Open Access” is here.
  6. Net Neutrality is very hard to define.  There is a real danger that any definition of it would be used by the incumbents, who are skilled in court and in the regulatory arena, to suppress innovative competitors.  On the other hand, we only need to be protected against monopoly behavior by those who share the access duopoly so it’s reasonable to impose this restriction only on them (and, in this case, only on new spectrum they may purchase).  They don’t have to bid if they don’t want to play fair.

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