Both Sides Get Busy In Preparation for Draft of 700 MHz Spectrum Auction RulesJuly 9, 2007
Congress Daily (subscription required) is reporting that FCC Chairman Martin will issue a draft of the 700 MHz rules this week. As can be expected from such a high profile matter, rumors are flying about what will and will not be in this “Chairman's Draft.” One of my colleagues describes the release of the draft like being in the 7th inning of a 9-inning baseball game – if you are winning in the 7th inning, you feel pretty good about your chances. If you are not…then you know you have to pull out all the stops to be victorious. This might include bringing pressure to bear from members of Congress, calling on the netroots and blogosphere to weigh in, and ramping up pressure on the mainstream media to cover the issue.
Today's activities seem to indicate that both the pro-competition and pro-incumbent sides are not waiting to see whether they are winning or losing. The front page of the Washington Post business section today features a long story (registration required) about Frontline Wireless, the company which seeks to build a network that will feature a partnership between commercial entities and public safety and will have as its key feature an “open access” model that will 1) require nondiscriminatory access by content and applications providers; 2) prohibit limits on connecting devices to the network; and 3) permit third parties to use the network to provide a wide variety of wireless broadband services. This is the same pro-competitive model that the Public Interest Spectrum Coalition has proposed for half of the spectrum to be auctioned.
Weighing in at the behest of incumbent broadband providers, 37 Republican members and one Democratic member of the House of Representatives sent a letter (pdf) urging Chairman Martin “not to impose burdensome and unnecessary” regulations on the auction. The letter singled out both open access and bidding credits to potential licensees that might adopt that model. Not surprisingly, the letter raises several of the canards incumbents are raising about open access – specifically that it will lead to lower auction revenue and that would “run counter to the goals of the organized public safety community.”
As we have said before, there is no evidence that pro-competitive conditions on a merger lead to less auction revenue, and indeed, the experience has been the opposite. But even assuming that the incumbents are correct, the benefits to the economy to be gained by more broadband competition would more than cover any short term loss to the Treasury. And don't forget that the law prohibits the FCC from considering potential revenues when developing auction rules.
Nor has the “organized public safety community” voiced any opposition to open access. There are some divisions in the community about the desirability of a public-private partnership, but on the open access question, public safety has been decidedly neutral. But it is clear that the incumbents will rely on unsupported scare tactics to get an auction that all but guarantees that the competition will stay home when the bidding begins next year.
Stay tuned here for more information on the Chairman's Draft and efforts to influence it.