WASHINGTON-Now that most of the spectrum earmarked for auction has been sold by the Federal Communications Commission, the question of spectrum management for the future is on the front burner both at that agency and in Congress.
Will future management policy be measured by the amount of money it is worth or by the public interest it could serve? This week, the commission is scheduled to address further refarming issues and new boilerplate spectrum-auction rules along with dispensing further information on its plans to auction spectrum at 2.3 GHz. The House Subcommittee on Telecommunications, Trade and Consumer Protection last week held its third oversight hearing in two years on spectrum-management policy, and opinions in that body regarding auctions has changed drastically.
Congressmen weighed in early on the issue of future spectrum policy, and most were critical of the FCC’s past and future auction plans. “Spectrum is the answer but what is the question,” queried Subcommittee Chairman Billy Tauzin (R-La.). “Every hertz should not be managed to maximize an auction bid.
“The FCC and the National Telecommunications and Information Administration still must manage spectrum in the public interest, which does not include counting dollars for the Treasury.”
The ranking Democrat on the panel, Rep. Ed Markey of Massachusetts, took the opportunity to talk about the merits of his proposal, sent earlier in the week to FCC Chairman Reed Hundt, to hold what could be characterized as comparative competitive bidding on spectrum-awarding spectrum to bidders that who could bring new networks and services to the public at the lowest price-instead of the probably more lucrative auctions that have been held during the last two years. Markey pointed out that Congress has prohibited the commission from basing all auctions on money, and that alternative methods should be considered in light of “Congress’s strong intent that the public interest cannot be defined by accountants looking at auction revenues.”
Hundt told Markey that he had not had time to study the letter, but that his proposal may be a good auction technique for service to rural areas.
Also chiming in was Rep. Thomas Bliley (R-Va.), who opined that the new federal budget submitted two weeks ago, which does contain new auction figures, was akin to “snake oil salesmen at a local carnival.” He warned Hundt and NTIA director Larry Irving that while mobile-phone spectrum may have been fair auction game, public-safety frequencies were not. According to Bliley, future spectrum policy should be driven by four factors: are auctions necessary as a result of deliberate analysis or to meet budget targets?; is the policy rational?; is it consistent with long-term policy?; and is public safety taken care of?
Bliley also railed against an administration plan that assesses an additional tax on broadcasters’ licenses if broadcast auctions in 20002 fall short of the $22 billion they are expected to bring. The tax could be carried into other services.
Because the commission has been nebulous about how some auctionable spectrum, like the 2.3 GHz range, would be used by auction winners, perhaps it should hold off putting more frequencies on the market just because it meets administration budgetary goals. “Many would say that the prime beachfront property already has been auctioned,” said Mike Oxley (R-Ohio). “Don’t dump all of the spectrum on the market just to score it for the next five years.”
Irving admitted that short-term budget concerns should not drive policy, but contended that budget goals should be considered. “Auctions have been a success, and the president believes in auctions.” Irving said President Clinton was preparing to expand the FCC’s auction authority to 2002 in order to accommodate the broadcast auction; he also mentioned the possibility of auctioning 888 WATS numbers (“because they have value to a business”), an idea that Jay Kitchen, president of the Personal Communications Industry Association, pooh-poohed, saying that the commission has no authority to auction numbers it doesn’t own.
Irving also said that the administration’s auction policy “was not driven by money, because the Congressional Budget Office sets the value. We just want to make sure that we get market value.”
