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IEP Conference on Spectrum Auctions Covered in TR Daily

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The IEP conference from April 25th, Spectrum After Incentive Auctions, was covered in TR Daily by Paul Kirby. The entire text of the article appears below:

EXPERTS DEBATE WAYS TO IMPROVE GOVERNMENT SPECTRUM MANAGEMENT

TRDaily – April 25, 2014

Experts today debated ways the federal government could improve its management of spectrum, including providing more property rights over frequencies, imposing spectrum fees on government agencies, and allowing a new agency or independent entity to oversee the process.

The ideas were aired at a morning event sponsored by the Information Economy Project, which is currently a joint initiative of the George Mason University School of Law and Clemson University.

Blair Levin, a communications and society fellow at the Aspen Institute who led the FCC initiative that drafted the 2010 national broadband plan (NBP), spoke in favor of putting an agency similar to the General Services Administration in charge of all federal spectrum and imposing fees on agencies for their use. Over time, the amount of spectrum agencies use would be reduced, he said.

Mr. Levin discussed issues touched on in a white paper released recently by the House communications and technology subcommittee (TRDaily, April 1).

For example, he said, proposals to allow federal agencies to share revenues from auctions of spectrum they give up – similar to an incentive auction for those agencies – is not “a bad idea,” but he questioned whether it would succeed because agencies would know that Congress could rescind the benefit in the future. He also suggested that “sticks work far better than carrots” when it comes to federal agencies.

He said he opposed making auction revenues an explicit consideration in FCC auction design, saying it is “really bad policy.” He said such a policy would provide the FCC an incentive to “maximize scarcity value” in order “to maximize revenue.” He also said that “such a rule is an invitation to litigation,” which would delay auctions.

Richard Bennett, a visiting fellow at the American Enterprise Institute, proposed the creation of a Federal Spectrum Service, which would be an independent corporation like the U.S. Postal Service that would hold the licenses for federal spectrum. Under his proposal, federal agencies would be required to reduce their spectrum footprint within five years, while allowing agencies to expand “their mission” through newer technology. The spectrum given up could be used “for more productive uses,” Mr. Bennett said.

Michael Marcus, a consultant and former FCC official, complained that the Commission takes too long to make decisions in complicated proceedings. He said the FCC and the National Telecommunications and Information Administration should establish new technical advisory committees, and he said the Commission should create a new board to work on spectrum issues that are not controversial.

Tom Hazlett, the director of the Information Economy Project who is joining Clemson as an economics professor, said that the FCC should rely on a liberal licensing model for spectrum, which he said “can accommodate great change in the marketplace,” rather than making command-and-control decisions about whether particular bands should be licensed or unlicensed.

Harold Furchtgott-Roth, a senior fellow at the Hudson Institute and a former FCC Commissioner, suggested that wireless carriers may be hesitant to bid on AWS (advanced wireless services)-3 spectrum in the 1755-1780 megahertz and 1695-1710 MHz bands because of “rather vague and undefined concepts” on how they will coexist with federal government incumbents. A key question is how interference problems will be addressed, he said, adding, “I think the answer is no one knows.”

“I think private companies will bid, but I don’t think they’re going to bid an awful lot for that,” he added.

In the incentive auction, he said that carriers would be unwilling to invest too much unless the FCC reaches coordination agreements with Mexico and Canada – accords that he said should be agreed to before the sale.

Robert Kaminski, an analyst at Capital Alpha Partners, reviewed spectrum that the FCC has made available since release of its NBP and suggested that it will likely fall short of the goal of making an additional 300 MHz of licensed spectrum available by next year. He said the amount of licensed spectrum will likely only total between 145 MHz and 197 MHz, “under more optimistic scenarios.” Regarding the incentive auction, he predicted that the Commission would only be able to repurpose spectrum in the “low double digits” rather than the Commission’s original goal of 120 MHz.

However, Mr. Kaminski noted that unlicensed spectrum in the 5 gigahertz band and shared frequencies in the 3.5 GHz band would easily get the FCC past the 300 MHz band total.

But Tom Hazlett noted that in the NBP, the FCC detailed 300 MHz of licensed spectrum. As a result, he said, including unlicensed frequencies “is not apples to apples.”

Mr. Kaminski also said that beyond the planned AWS-3 and incentive auctions, there “is no real clear line of sight to more auctions.”- Paul Kirby, paul.kirby@wolterskluwer.com

Reprinted with permission of TRDaily