Heading For A Vote, The FCC’s Spectrum Auction Plan Draws Mixed Reactions

AT&T might not be a big fan of the FCC’s plan to reserve some spectrum for smaller carriers in the coming 2015 auction, but that doesn’t mean the effort doesn’t have supporters. Recently, ten Democratic members of the U.S. House of Representatives signed a letter endorsing the proposal.

In their words, the “proposal to reserve a portion of the available licenses for carriers with limited nationwide low-frequency holdings will stimulate auction competition and revenues” while at the same time “ensuring opportunity to bid and win spectrum to enhance and extend rural build out and improve coverage in all areas, while guarding against excessive concentration of spectrum resources.”

Previously, AT&T had threatened not to take part in the auction. The FCC didn’t seem fazed. AT&T then decided that yes, after all, it would take part. It was a pretty decent episode of bluff calling.

On the other end of the, ahem, spectrum on the auction is Rep. Darrel Issa (R-CA). The current plan to buy back spectrum from television companies and sell it to wireless carriers is a bad idea in his eyes, as we’re selling a bloc of public assets for a one-time fee. He compared the auction to “selling each and every mile of the Mississippi.”

That’s a reasonable point. The previously quoted letter does mention that “reducing the national debt” would be a benefit of the auction. That’s a minor point, given the comparative scale of possible spectrum revenue next to our accumulation of debt. So the spectrum auction is more the government helping with the re-allocation of spectrum to a more efficacious part of the economy. The money is nice, but if the country was out to maximize profits, it wouldn’t execute the sale as it currently intends to. Long-term leases with competitive rents, expiration periods and re-bidding might generate more revenue, and keep more power in government hands.

Rep. Issa is not alone in his opposition to the plan. As the Wall Street Journal reported earlier today, other House Republicans are opposed to a sale that doesn’t allow for more intense competition. Here’s Rep. Fred Upton “The FCC must not be in the business of picking winners and losers by excluding parties from the auction or constraining parties’ ability to bid.”

House Republicans also said the following: “This is not how a market-based auction should function; it is how a cartel controls price.”