The Federal Communication Commission
is bowing to Congressional and industry pressure and delaying its upcoming spectrum
license auction for a third time.
Originally scheduled for June 6, but moved to the first week of September,
the FCC again rescheduled the auction for the 700-megahertz licenses to
March 6, 2001.
Stating that the commission needed additional time for bidder preparation
and planning, federal regulators closed the application window for filing
in the 31st spectrum sale.
Any applications that were in the system will be purged and applicants
wishing to participate in the bidding must re-file in compliance with new
deadlines set to close early in February.
William Kennard, FCC chairman, said the postponement of the 700-megahertz
auction is necessary as a matter of sound spectrum management.
“As the expert agency charged with managing the nation’s airwaves, the
Commission must allocate and assign the spectrum in the 747-762 MHz and
777-792 MHz band in a manner that comports with the specific statutory
requirements of the Communications Act,” Kennard said.
The factors surrounding the spectrum, including the incumbency of the UHF
television broadcasters in the band, make the auction unusually complex.
UHF operators are obliged to abandon the frequency and migrate to digital
delivery for their broadcasts by 2006.
Controversy has surrounded the lucrative spectrum that holds the hopes of
next-generation wireless Internet services and advanced cellular
communications in its finite frequencies.
Commissioner’s Harold Furchtgott-Roth and Gloria Tristani issued a joint
statement condemning the decision.
“We cannot support today’s decision to delay the 700 MHz auction until
March 2001,” the statement read. “This action is in stark disregard of this
agency’s statutory obligation to ensure that all proceeds of such bidding
are deposited no later than Sept. 30.”
“No spectrum or fiscal policy consequence, no letters from members of
Congress, and no interpretation of the overall statutory scheme can
overcome the Commission’s clear obligation to proceed with this auction
consistent with the statute,” they said. “As commissioners, we are sworn to
uphold the law. We are obligated to object to this direct violation of our
governing statute.”
Meanwhile, industry leaders like AT&T
Wireless Services, Inc. applauded the FCC decision to delay the
spectrum sale.
Gregory Landis, AT&T Wireless senior vice president and
general counsel, said postponing the 700-megahertz auction has done a great
service for the American wireless consumer.
“By exercising its authority over spectrum management, the commission has
gone a long way to ensure that this spectrum can be put to its highest and
best use when it is auctioned next year,” Landis said. “The real winners
today are wireless consumers, who gain the most when spectrum decisions are
based on sound long-term policy.”
According to industry analysts the law that requires the FCC sell the
airwaves was short sighted. The 1997 Balanced Budget Act ordered the agency
to deposit the proceeds from the sale in the U.S. Treasury by Sept. 30 so
monies would count toward the 2000 federal budget revenues.
Several members of the House Commerce subcommittee on telecommunications
urged that the FCC delay the sale because the auction may only raise $2.6
billion.
Rep. Rick Boucher (D-VA) said the uncertainty of when the airwaves would be
available damaged the value of the spectrum. He noted that a similar
auction in the United Kingdom raised about $30 billion.
Boucher contends that the migration of television signals off from the
airwaves depressed the market price of the spectrum.
Verizon Corp. also
requested that the FCC delay the auction because its was busy reorganizing
its assets from recent mergers and aligning join ventures with other
wireless firms.
The company again called for a delay last week, asking Congress to step in
to delay the auction since it passed the law requiring the sale.
