Spectrum Comments Flood FCC

By Roy Mark

June 05, 2007

Should telecom and cable companies be barred from participating in upcoming auction?

Tech groups, consumers, political activists and at least one presidential candidate are flooding the Federal Communications Commission (FCC) with advice for the agency's upcoming auction of spectrum that may sell for more than $12 billion.

The primary thrust of their comments is simple: keep the spectrum out of the hands of incumbent telecom and cable giants like Verizon and Comcast. The spectrum in the 700MHz band is earmarked for wireless broadband services and public safety.

"Big phone and cable companies don't want this new competition to their Internet services -- they want to cement their market dominance in place," stated a letter signed by more than 40 individuals, companies and organizations, including Stanford law professor Larry Lessig and Craigslist founder Craig Newmark.

The comments came as the deadline for comments on the FCC's rules and regulations for the auction came to a close on Monday.

Congress approved the spectrum sale as part of the Deficit Reduction Act of 2005, ordering television broadcasters to vacate their analog spectrum by Feb. 17, 2009, as part of the digital television transition. The FCC will auction off the vacated spectrum by no later than January.

As originally envisioned by Congress, the spectrum would go to the highest bidder with the proceeds underwriting digital converter boxes for consumers and a national public safety wireless network. Excess proceeds will go to the federal treasury.

But many groups have opposed that plan, calling instead for at least some of the spectrum to be dedicated to a wholesale network that would then make it available to a number wireless Internet service providers. The hope, the groups say, is to establish a third broadband competitor to telephone and cable companies.

"If the FCC simply gives the highest bidder exclusive rights over the new airwaves, phone and cable companies could become permanent gatekeepers of the airwaves – continuing their record of keeping new competition and innovation out of the marketplace," the letter states.

Democratic presidential hopeful John Edwards also wrote to the FCC claiming as much as half of the spectrum "should be set aside for wholesalers who can lease access to smaller start-ups. By setting bid and service rules that unleash the potential of smaller new entrants, you can transform information opportunity for people across America -- rural and urban, wealthy and not."

A grassroots campaign led by the SavetheInternet Coalition has also bombarded the FCC with more than 250,000 comments pushing the agency to set aside spectrum for a wholesale network and rules that would require auction winners to build out their systems, mandate anonymous bidding and impose network neutrality requirements for all auction winners.

A Facebook group called "I Want National Wireless Internet!" hit the FCC with 5,000 comments.

"The public is sending a clear message about the future of the Internet," Timothy Karr, campaign director of Free Press, which coordinates SavetheInternet, said in a statement. "It would be a big mistake to hand over the airwaves to corporate gatekeepers like AT&T, Verizon and Comcast."

AT&T, though, is sticking with the highest-bidder concept.

"The commission should not abandon its policy of relying on market forces through the auction process," AT&T wrote in its comments. "The commission should permit the market to determine the most effective manner to satisfy public safety agencies' supplemental communications needs."

The National Cable & Telecommunications Association (NCTA) also opposed any plan that would exclude cable and telephone companies from bidding for the spectrum.

"[Some] have proposed that the commission flatly exclude incumbent cable operators and local exchange carriers from even participating in the 700MHz auction," the NCTA said in its filing. "We challenge the proposal to engineer the auction toward a preordained outcome and strongly oppose the exclusion of competitors from the auction process."

In a filing last month, members of the SavetheInternet -- including Consumers Union, Media Access Project, Public Knowledge and Free Press -- urged the FCC to ensure that the upcoming auction sets aside at least half of the available spectrum for open and nondiscriminatory Internet access.

"The commission simply cannot choose to let current market conditions and participants control the outcome of the upcoming auctions," the group said. "To date, existing wireless broadband providers do not offer a useful third pipe for consumers."

The FCC will set the rules for the auction sometime this summer.

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