Yesterday, TechFreedom filed comments asking the FCC to conduct the open auctions of spectrum reclaimed from broadcasters as Congress intended in passing the Spectrum Act last year. Specifically, we asked the FCC to reject arguments made by some wireless companies to exclude their competitors from the auction by imposing a cap on spectrum holdings below 1 GHz. The following statement can be attributed to Matt Starr , TechFreedom Legal Fellow, and Berin Szoka , TechFreedom President:
Companies are scrambling for spectrum as demand for data skyrockets. In highly-concentrated population centers like New York and San Francisco, the spectrum crunch causes dropped calls and sluggish data service. Only in Washington would anyone seriously suggest that the right way to satisfy exploding consumer demand for a product is to cap the supply of raw materials for that product any one company can acquire. Yet that’s precisely what the FCC is being asked to do here: cap how much low-frequency spectrum a single wireless company can own. In effect, this means excluding Verizon and AT&T from the upcoming incentive auctions. That will hurt their current customers and limit their ability to serve future customers, while advantaging their competitors. The whole point of holding auctions is that the FCC shouldn’t be picking winners and losers.
The FCC has been down this road before: In 2008, the FCC’s auction for low-frequency spectrum fizzled because the FCC imposed certain regulatory conditions that made the spectrum worth less than the auction’s reserve price. That’s why, when Congress authorized these incentive auctions, it made clear that they should be open to all participants. An open auction would ensure that spectrum goes to its highest valued use, while also maximizing revenue for the Treasury, and funding for public safety needs.
Those advocating spectrum caps assume spectrum consolidation is necessarily anti-competitive but that’s just not supported by the evidence. Concerns about the competitiveness of wireless markets should be address by antitrust, the same law that applies to all other consumer products. The DOJ is perfectly capable of aggressive enforcement, as it demonstrated in blocking AT&T’s 2011 acquisition of T-Mobile. The FCC should defer to the DOJ’s antitrust experts, but if it decides it must limit spectrum holdings, it should do so based on the rigorous analysis of antitrust. That means assessing consumer welfare in a far more robust way than simply focusing on how much spectrum each company owns.
Starr and Szoka are available for comment at firstname.lastname@example.org .