Congress and the FCC Talk Incentive Auctions, Spectrum, and Your Wireless Future

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On Wednesday, December 12, 2012, the House Energy and Commerce Subcommittee on Communications and Technology held an oversight hearing on the implementation of spectrum auctions in an effort to meet the growing demand for wireless broadband services and fund a nationwide public safety network.  The five FCC Commissioners testified before the panel on the status of the auctions and their interpretations on how the auctions will free up additional spectrum and promote competition.  These auctions were part of the Middle Class Tax Relief and Job Creation Act of 2012.  For background on the spectrum provisions included in this legislation, read Harold Feld’s recap of the legislation from February of this year.

Public Knowledge, along with over 370 other organizations and companies, wrote a letter to Subcommittee Chairman Greg Walden (R-OR) and Ranking Member Anna Eshoo (D-CA) advocating for the FCC to pursue policies that would protect the future of unlicensed spectrum.  The potential economic benefit for unlicensed technologies is tremendous, and the future of IP innovation through unlicensed spectrum is potentially limitless.  Therefore, it is essential that the FCC be allowed to design auctions that will enable it to free up new licensed spectrum and expand unlicensed spectrum resources.

Three issues that permeated throughout the hearing were (1) an accurate history and interpretation the intent of the statute’s unlicensed spectrum provisions; (2) a focus on the spectrum cap; and (3) what role federal spectrum should play in this discussion. 

Unlicensed spectrum had its fair share of advocates on the subcommittee, among them, Ranking Member Eshoo, Energy and Commerce Ranking Member Henry Waxman (D-CA), and Rep. Ed Markey (D-MA).  Waxman’s opening statement explained the importance of the spectrum law’s provision, which allowed the FCC to create guard bands in repurposed broadband spectrum, which may be used for unlicensed services like “Super Wi-Fi.”  As Waxman noted, the guard bands will “enhance the value of the spectrum to be auctioned by protecting it from interference and create a nationwide band of prime spectrum that can be used for new innovations in unlicensed use.”  Although Chairman Walden focused on the potential revenue that would be gained from auctioning more spectrum, even he acknowledged the need for non-auctionable guard bands.

The focus on revenue factored heavily into how Members and Commissioners interpreted the statute, and that interpretation split, predictably, along party lines.  Republican Members, led by Walden, expressed concern that removing any spectrum from the auction table would prevent potential revenue to pay for things to which the Congress has committed the FCC to fund through the incentive auction revenue.  Ranking Member Eshoo countered this argument by noting that Section 309 of the Telecom Act explicitly prohibits the FCC from basing its auction rules around revenue that would be generated from an auction.

Another point of discussion was the issue of federal spectrum and how it can be effectively utilized for public use.  Here, the main point of contention was over sharing federal spectrum (as was suggested in the PCAST report from July of this year) or having the Executive Branch clear entire bands of federal spectrum to auction it for exclusive licenses.  This conversation, again, split along party lines with Commissioners McDowell and Pai pushing for releasing more federal spectrum for auction as opposed to sharing federal spectrum.  Commissioner Rosenworcel spoke of using incentives to enable federal authorities to use their spectrum more efficiently.  This is a welcome discussion about encouraging federal agencies to reallocate or share their spectrum bands.  As PK has mentioned before, moving federal functions around to clear blocks of spectrum large enough to be effective is “technically difficult, extremely expensive” and not going to occur anytime soon.

So there you have it: another day and another chance for Congress to delve into the weedy, technical details of spectrum and in particular, incentive auctions.  These auctions will shape the future for wireless communication, and will impact how and to what degree we are able to use our devices.  The FCC is still accepting comments in the record for their Notice of Proposed Rulemaking.  This is the opportunity for the public to weigh in on the importance of unlicensed spectrum and help shape an open, innovative communications field for the future.  It will be essential that the FCC be given the freedom to conduct these auctions without interference from Congress, as provided by the Middle Class Tax Relief and Job Creation Act of 2012.

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