FCC Sets Tuesday Vote on Auction Rules

After months of intense lobbying by the technology and telecom industries, the
Federal Communications Commission (FCC) will vote Tuesday on the rules for the
January 700MHz spectrum auction. The auction is expected to bring as much
as $20 billion to the federal coffers.

The spectrum is highly prized for its ability to deliver wireless broadband
and other advanced services. Since Congress last year ordered television broadcasters to clear the spectrum by early 2009 as
part of the digital television transition, who will bid on the airwaves and under what conditions have been the source of considerable speculation.

Incumbent carriers like AT&T, Verizon and Sprint once thought they would have
the best shot at the spectrum in a high-bid, winner-take-all auction. But FCC
Chairman Kevin Martin startled the
incumbents earlier this month by circulating draft auction rules calling for
an open-access platform for a third of the spectrum for sale.

“The upcoming auction provides a rare chance to promote a more open platform
without disrupting existing networks or business plans,” Martin said Tuesday
at a U.S. House hearing on the sale.

Martin hopes the conditions will help spark a third competitor to incumbent
telephone carriers and cable companies for wireless broadband services.
Currently, the telcos and cable companies control 98 percent of U.S. broadband

Martin’s proposal opens the door for a possible bid by search and advertising
giant Google, which has said it would
participate in the auction if the FCC conditioned the sale on the winner
providing an open access network that would also be available for others at
wholesale rates.

The current proposal, though, falls short of meeting Google’s conditions since
Martin opposes the wholesale aspect. Martin’s plan would allow consumers to
connect any legal device and run any legal application to the wireless
network. The rules for the spectrum would also contain prohibitions against
the network provider blocking legal content.

“I have not proposed to apply these same principles to the entire 700MHz band
or to existing networks,” Martin said Tuesday. “Nor have I proposed to apply
network neutrality obligations or mandatory wholesale requirements for this
block or any other block.”

Martin’s fellow FCC commissioners are expected to continue debating the
conditions of the sale and are subject to negotiations between the three
Republicans and two Democrats on the panel. Martin needs three votes to sell
the plan.

At Tuesday’s House hearing, the commissioners were evasive about where they
stood on the auction rules.

“My goal is to provide an auction structure that promotes opportunities for
all bidders, including new entrants as well as existing providers,”
Commissioner Jonathan Adelstein, a Democrat, said. “I am also interested in
identifying spectrum on which to establish a meaningful open-access
environment. Such a proposal could open these key airwaves to badly needed
competition in the broadband space.”

Fellow Democrat Michael Copps said, “By any measure, we’re getting too little
broadband at too high a price. If we get this right, this auction offers the
prospect of new competition, innovation and consumer choice – perhaps even a
third broadband pipe.”

Republican Robert McDowell added he was “actively considering many ideas”
while fellow Republican Deborah Taylor Tate sidestepped the issue.

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