The
full comments, with attachment, are available in PDF format.

Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554

In the matter of
Auction of Broadband Radio Service Licenses (AU Docket 09-56)
Comment on Competitive Bidding Procedures for Auction 96

COMMENTS OF
THE PUBLIC INTEREST SPECTRUM COALITION

On behalf of the Public Interest Spectrum Coalition,^[1] Public Knowledge submits these comments
in response to the Public Notice in the above docketed proceeding. We
commend the Wireless Telecommunications Bureau (Bureau) for proposing to
adopt anonymous bidding for Auction 86. As demonstrated by
the use of anonymous bidding in Auction 73 (the “700 MHz
Auction”), anonymous bidding eliminates the ability of bidders to
engage in certain types of strategic behavior. This promotes increased
competition for licenses and greater return to the public for use of the
spectrum public asset.^[2] A study conducted by Dr. Gregory Rose bearing out the
benefits
of anonymous bidding in Auction 73 is attached with these comments.

The Bureau Should Adopt Anonymous Bidding Rules for Auction
86

In previous spectrum auctions, bidders have used open bidding to engage
in signaling behavior aimed at reducing demand for licenses and keeping
out new entrants^[3].
Signaling has been described as collusive behavior where “bidders
signal their willingness to abstain from competing over certain objects,
provided they are not challenged on others.”^[4] A study by Prof. Peter Cramton and Prof.
Jesse Schwartz found extensive use of such signaling in the PCS D, E, and
F auction (auction 11)^[5]. The study indicates that signaling resulted in a
significant revenue loss.

Similarly, a study of the AWS -1 auction (Auction 66) by Dr. Gregory
Rose^[6] found that
incumbents used the open auction to keep new entrants from obtaining
licenses. They achieved this result by a practice called retaliatory
bidding i.e. concentrating collectively on newcomers who posed a
competitive threat and using superior economic power to outbid them.

In response to these concerns, the Commission adopted anonymous bidding
rules for Auction 73. As demonstrated by the attached study by Dr.
Gregory Rose, an analysis of the results in Auction 73 bear out the
prediction that anonymous bidding increased the overall efficiency of the
auction by reducing the ability of bidders to engage in certain types of
strategic behavior. In view of its proven benefits in Auction 73, PISC
urges the Bureau to adopt anonymous bidding in auction 86.

Respectfully submitted,

/s/ Harold Feld

Harold Feld
Legal Director
Public Knowledge
1875 Connecticut Ave. NW
Suite 650
Washington, D.C. 20009
(202) 518-0020

[1] PISC is an unincorporated
ad hoc coalition of non-profit organizations with a membership
consisting of the following, in alphabetical order: The CUWiN Foundation
(CUWIN), Common Cause, Consumer Federation of America (CFA), Consumers
Union (CU), EDUCAUSE, Free Press (FP), Media Access Project (MAP), the
New America Foundation (NAF), the Open Source Wireless Coalition (OSWC),
Public Knowledge (PK), and U.S. PIRG.

[2] See 47 U.S.C.
§309(j)(3)(C).

[3] See Gregory Rose,
How Incumbents Blocked New Entrants in the AWS-1 Auction: Lessons For
the Future, in Spectrum Auction Breakdown: How incumbents
Manipulate FCC Auction Rules To Block Broadband Competition (June 2007),
Working Paper 18,
http://www.newamerica.net/files/WorkingPaper18_FCCAuctionRules_Rose_FINAL.pdf;
Gregory Rose, Tacit Collusion in The AWS -1 Auction: The Signalling
Problem, in Spectrum Auction Breakdown Supra; Peter Cramton and Jesse A. Scwartz,
“Collusive Bidding in FCC Spectrum Auctions,”
Contributions to Economic Analysis and Policy1:1(2002) available
at: http://works.bepress.com/cramton/2

[4] Rose, Tacit Collusion in
the AWS-1 Auction, supra note 3, at 6.

[5] Id.(discussing the
findings of Cramton and Schwartz’s study).

[6] Rose, How Incumbents
Blocked New Entrants in the AWS-1 Auction, supra note 3, p.15-18.