The comments were due yesterday at the FCC on the proposals for how the auction of the valuable 700 MHz spectrum should be conducted. PK was part of a group of public-interest organizations that made recommendations on how the spectrum should be used best to try to break up the duopoly that telephone and cable companies have on high-speed broadband, or at least add some semblance of competition.
Also filing with us as the Ad Hoc Public Interest Spectrum Coalition were (in alphabetical order): Consumer Federation of America, Consumers Union, EDUCAUSE, Free Press, Media Access Project, New America Foundation and U.S. Public Interest Research Group.
In its comments on the 700 MHz auction, the coalition said that the Commission should act “both to ensure that new spectrum is offered on an open and nondiscriminatory basis and to bring in new entrants interested in challenging the current cozy wireless oligopoly and broadband duopoly.”
We recommended several policies that should be implemented in the auction to improve competition, including:
Anonymous Bidding: Anonymous bidding prevents bidders from using signaling and blocking techniques during the auction to deter new entrants from participating. Anonymous bidding will both maximize the likelihood of new entrants and better ensure an appropriate return to the public for the use of valuable public licenses.
Exclusion of Incumbents or New Entrant Credits: Exclusion of existing incumbents remains the simplest way to create a class of new entrants able to compete with existing providers. Alternatively, a “new entrant credit” can make it possible for new entrants to compete against deep-pocketed incumbent rivals.
Band Plan Issues: The Commission should adopt band plans that facilitate creation of national providers to achieve necessary economies of scale.
Build-Out Requirements: Licensees should be subject to a “use or lose” license condition. At the same time, Commission should allow new entrants to demonstrate that failure to meet the service requirements result from genuine difficulties rather than from an intent to warehouse spectrum or leave rural areas unserved.
Designated Entities (DEs): The Commission should set rules limiting the relationships between small businesses that participate in the auction (labeled by the FCC as designated entities, or DE) and large wireless incumbents. Auction procedures often include provisions to increase the chances of small businesses to win spectrum licenses.
Open Access: The 700 MHz auctions will not give birth to the much anticipated third pipe if the licenses are auctioned to the very same vertically integrated telephone and cable incumbents that dominate the wireline market. At least 30 MHz of spectrum licenses should be conditioned on the licensees’ obligation to make wholesale service available to any provider. This will guarantee that new entrants have the opportunity to enter the market in competition with incumbent providers.
Net Neutrality and Carterfone: All the licensees which win spectrum in the auction must be obligated to carry all Internet and voice traffic without privilege, degradation, or preference, and they must permit consumers to use any non-interfering equipment.
A copy of the summary of the comments is here
The full text is here
Most of these suggestions
Most of these suggestions are excellent (especially Anonymous Bidding)! The wholesale requirement is obviously well intentioned, but doesn’t have any good “real world” track record to support it. Take a look at Virgin Mobile’s S-1, or the LLU’s in the UK. The financials are horible for the wholesale purchaser. The only reason to do it is as a loss-leader for another captive service (e.g., a proprietary return path for interactive Satellite video). It’s not clear how this will further the cause of an alternate 3rd pipe. But it is clear how it will reduce the value and utility of incredibly important spectrum. Do you have a few good examples of financially successful wholesale repurchasers?
Always glad to see someone
Always glad to see someone else who likes anonymous bidding …
Open access has a solid history in the wireline world. The question in wireless has been the nature of implementation.
The engineering assesment attached to the PISC comments explains that open access can be achieved by mandating interconnection at the relevant gateways in the wireless network (rather than attempt to explain, I will simply refer you to the link above for the comments).
You say "open access has a
You say “open access has a solid history in the wireline world,” but have you actually looked at the financials. “Solid history” to me means more than they tried it and the companies went broke, or the govenrment bailed them out for now. I’ll ask again, does anyone have any names of real companies that have been financially successful (positive cash flow without subsidies from the governement or wholeseller) reselling JUST DATA SERVICES (Internet or private network)? The only examples I can come up with are subsidy models, where either the wholeseller, reseller or government loses money. In Japan you might be able to make a case that the jury is still out, but the latest I hear is NTT will not be forced to unbundle the new fiber loops, in which case the competition will need to do all of the new construction themselves.
BTW, as much as I like the Frontline proposal for the provision of a national emergency system, I think they have the same problem with their wholesale proposal. You might get to try a science experiment with the first auction, but not the last. Unless there is economic value created, the system will become unstable, like CLEC’s in the US or LLU’s in UK.