WASHINGTON-As industry opposition to Pentagon spectrum bills mounts, the Federal Communications Commission confirmed last week it is prepared to suspend the normal regulatory process for deciding how to auction 36 megahertz from TV channels 60-69 if Congress votes to hold the wireless license sale this year.
Currently, the FCC is grappling with a myriad of complex issues on the auction that-under a 1997 law-is not supposed to be held before Jan. 1, 2001.
But a Department of Defense appropriations bill passed by the Senate requires the FCC to conduct the auction of prime 700/800 MHz frequencies this year. DOD and the White House support an accelerated auction and hope to raise $2.6 billion from it.
“We will do whatever Congress instructs us to do with this spectrum. Obviously, if the legislation passes, it will require us to re-evaluate our priorities with pending proceedings,” said Kathleen O’Brien Ham, deputy chief of the FCC’s Wireless Telecommunications Bureau.
But it would take more than a re-ordering of FCC priorities to hold the auction this year. The agency also would have to drastically curtail the entire rule-making proceeding to make the auction happen in 1999.
As it stands, an FCC notice of proposed rule making on the 36 -megahertz auction calls for comments by July 19 and replies by Aug. 13. With heavy lobbying expected on the item, the possibility of the FCC making a final decision and ruling on any reconsideration petitions this year is remote.
If Congress wins out, the deliberative process of sorting out auction issues may go by the wayside as the rules of the game get made by regulatory fiat.
Thus, the FCC could substitute its judgment for that of the industry and public on issues such as permitted services, amount of spectrum for each, geographic licensing area, regulatory status, eligibility, spectrum aggregation, foreign ownership, performance requirements, disaggregation and partitioning of licenses and others.
In so doing, congressional and administration budgeteers will have effectively succeeded once more in co-opting spectrum policy from the experts. It could be just enough to generate a seismic jolt to the wireless industry.
The last time Congress mandated an auction, in 1997, the FCC raised $13.6 million after only 29 rounds of bidding. Some folks walked off with $1 licenses, embarrassing the FCC, lawmakers and the White House. Some blame shoddy spectrum management for contributing to wireless bankruptcies.
Many wireless lobbyists are scrambling to prevent the House from including an accelerated auction provision in a companion DOD appropriations bill.
“Accelerating this auction would … be another step toward the abandonment of sound spectrum management within the U.S.” and “harms the industry and the American taxpayer,” said an industry coalition in a June 15 letter to House DOD appropriations subcommittee Chairman Jerry Lewis (R-Calif.).
The letter was signed by Industrial Telecommunications Association President Mark Crosby, Personal Communications Industry Association President Jay Kitchen and Telecommunications Industry Association President Matthew Flanigan.
Noticeably absent from the letter was the Cellular Telecommunications Industry Association. CTIA members are divided on the accelerated auction question. Some large operators, like AirTouch Communications Inc. (which is poised to merge with U.K. giant Vodafone Group plc), do not mind the idea of locking in third-generation mobile phone spectrum as soon as possible.
In contrast, start-up personal communications services firms are struggling to stay financially afloat. A big auction this year could scare away precious capital, their lifeblood.
Overall, the wireless industry sees the accelerated auction and provisions in other DOD bills-giving the Pentagon priority rights over shared spectrum and the global positioning system-as an assault on the norms and mores of spectrum policy making.
A June 16 letter protesting the DOD spectrum and GPS priority measures was sent to House Commerce Committee Chairman Thomas Bliley (R-Va.) and other panel members by PCIA, CTIA, TIA, the Fixed Wireless Communications Coalition, the Satellite Broadcasting and Communications Association and the Satellite Industry Association.
While Bliley and other Commerce Committee members have jurisdiction over telecom spectrum policy, their clout in the debate is limited because congressional conferees that iron out final bills will come from DOD authorization and appropriations committees.
