What’s the hurry to auction?

The Federal Communications Commission is rushing toward auctioning too much spectrum in too short a period of time and is going to be disappointed with the results.
While auctioning 25 megahertz of AWS-3 spectrum and designating a portion of that spectrum for “free” wireless broadband access may be an admirable goal, the timing is wrong. Martin said he hopes to fasttrack the comment cycle. The FCC also is trying to figure out how to best deal with the D-Block spectrum at 700 MHz, which failed to be sold at auction earlier this year. Martin has said he would like that auction to take place before the end of the year.
What’s the rush?
Today’s top wireless carriers don’t need any more spectrum right now. They’re in pretty good shape after the AWS-1 and 700 MHz auctions. T-Mobile USA, Verizon Wireless and AT&T Mobility were the big winners in those auctions. Sprint Nextel Corp. has always enjoyed a nice spectrum position and hasn’t needed to buy more. And Alltel, which likely will be picked up by Verizon Wireless, said it bowed out of the 700 MHz auction because it was too expensive.
And with the nation’s mortgage crisis, increasing fuel costs and a presidential election on the horizon, getting a new player to plunge ahead with an unproven business model is a pretty risky proposition.
The FCC has already faced congressional criticism over the lack of new entrants among 700 MHz auction winners. Further, following a probe on the failure of the D Block, potential newcomer Frontline Wireless blamed tight capital markets, as well as vague auction rules and a stiff default penalty, as reasons for not bidding. The economy certainly hasn’t changed significantly since that well-connected group of insiders failed to make a go.
Now the FCC is looking to attach some pretty significant strings to the AWS-3 spectrum, and is still debating whether conditions should be linked to the D-Block spectrum.
What’s the goal of these auctions? If it is to bring affordable broadband to more of the nation, to give first responders access to wireless broadband, and to entice new players into the industry, then the agency should carefully write rules to meet those goals – and not rush the process to meet an imaginary deadline.