Game on for voluntary spectrum auction

13 January 2013 by Steve Blum
, , , , ,

It's all about doing business now.

“The unstated reason for this auction is the money. It was estimated we could raise $24 billion,” said Congressman Lee Terry, a Republican from Nebraska. “We wanted the FCC to design the rules to get us the $24 billion”

The debate now is over what those rules should be. The FCC intends to carry out a three step process next year to shift frequencies in the 600 MHz range from television broadcasting to mobile broadband uses.

First step is to ask television station owners to bid to sell their channel assignments back to the FCC in a reverse auction. Then the remaining TV stations will be “re-packed” to consolidate the newly opened frequencies, which in turn will be auctioned off to mobile carriers.

Over the next couple of months, the FCC will be taking comments regarding how this should be done from anyone who's interested. The people most interested – mobile carriers, broadcasters and advocates for free, unlicensed spectrum – put their ideas on the table during a panel session at CES last week.

“The FCC's job now is to make it as easy as possible to participate,” said Rick Kaplan from the National Association of Broadcasters, arguing for a go-slow approach. “The most important thing is to get it right rather than get it done.”

The other panelists felt a greater sense of urgency, pointing to the growing mobile broadband capacity crunch and the need to get on with figuring out the technical and business details.

“There is an urgency,” said Bill Lake, chief of the FCC's media bureau and the staffer responsible for running the auctions. He said it needs to be done next year, because 2015 is when the mobile crunch will hit hard.

“The [mobile data traffic] numbers are even bigger than they were back then. It takes a long time to get spectrum on the table,” said Charla Rath, vice president of policy development at Verizon, referring to last year's congressional vote to move ahead with the auctions. She added that it's difficult to make plans “when you don't know what's on the table.”

There's also a debate over how much spectrum should be sold to mobile carriers and how much set aside for unlicensed use. Which gets back to the money question.

“Our concern is that we don't take money off the table at the start,” said Neil Fried, chief counsel for the House of Representatives' technology, energy and commerce committee.

That's not a worry, according to Paul Margie. He said setting aside unlicensed spectrum won't impact the amount of money raised, because the price will be driven by the limited supply and the aggregate budgets of the people bidding." Margie is a partner at the Wiltshire and Grannis law firm and his clients include unlicensed spectrum advocates like Google and Microsoft. He wasn't actually representing them on the panel, but the views he expressed seemed consistent with theirs.

Kaplan aside, the panelists were committed to setting the rules and holding getting the auctions done in the next two years. “I think it's going to be a nice little Christmas present at the end of 2014,” concluded economist Mark Fratrik.