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Auctions Alone Will Not Solve ‘Spectrum Crunch,’ Experts Say

Wednesday, February 8, 2012

By Paul Barbagallo  

MIAMI—Selling licenses to the nation's airwaves through auctions will not alone solve what Federal Communications Commission Chairman Julius Genachowski has termed the “looming spectrum crunch,”industry experts said at the TMC IT Expo here.

To address the problem, Rick Whitt, Google Inc.’s Washington managing counsel, outlined a strategy that he said would strike a more “balanced approach,” including increasing spectral efficiency, conducting a nationwide inventory of users and uses to find “fallow” or underutilized spectrum, and applying a new “flexible use” standard to licensing—all in addition to auctioning the airwaves to commercial bidders.

“If you agree with the concept that over the coming years we will have this massive spectrum crunch, where demand will far exceed supply with all the data-driven applications coming online …there's no way to auction your way out of that coming dire threat,”Whitt said in keynote remarks at the conference Feb. 2. “Auctions will fall far short of meeting that gap.”

The research firm Yankee Group estimates that by 2015 consumer use of wireless applications and services will be nearly 60 times today's volume.

The FCC has set a goal of freeing 500 MHz for commercial mobile broadband networks by 2020, and has championed the concept of “incentive”spectrum auctions, in which the agency would reclaim airwaves from television broadcasters and auction them off to mobile network operators, sharing some of the proceeds with the TV stations that volunteer to cease broadcasting and, ultimately, give back their spectrum to the government.

Overemphasis on Licensing Seen.

The FCC is hoping to take back as much as 120 MHz from TV broadcasters alone, but some, like Google's Whitt, believe that this spectrum should not simply be auctioned off to the highest bidder.

“There seems to be a focus right now on licensing everything,”Whitt said. “We need to be in Washington articulating the position that more spectrum is better, whether it's licensed or unlicensed, in all kinds of mixes and all kinds of ways, and we all should have a right to have access to it.”

Later in the day, Whitt joined high-tech interests and consumer groups at a press conference to rally support against a GOP House bill that would restrict the use of broadcast TV spectrum for unlicensed uses. One provision in that legislation would require the FCC to auction all the spectrum returned by TV broadcasters, leaving none unlicensed. As the bill is drafted, the FCC would retain discretion to add to the 675 MHz of unlicensed spectrum currently available below 6 GHz by “allowing secondary, shared use of this spectrum or primary, dedicated use of other spectrum,” but would not have the power to designate certain bands exclusively for unlicensed use. In contrast, a Democratic version leaves it up to the commission to decide how much broadcast TV spectrum should be set aside for unlicensed use.

At the press conference, Whitt said the Republican bill could actually “kill”TV “white spaces”—the vacant spectrum in and around TV channels, which Google's co-founder Larry Page has called “WiFi on steroids.”

“This spectrum is the lifeblood of tech, for the internet, for all the things that are happening in the online world,” Whitt said.

In addition to earmarking spectrum for unlicensed use, Whitt said the FCC and the Commerce Department's National Telecommunications and Information Administration should begin conducting an inventory of spectrum to determine which licensees may not be using it or using it efficiently.

“It's time to do it,” Whitt said. “If they [spectrum licensees] are not using it to their full capacity, what's the problem? What are the market barriers? What is hampering the use of spectrum?”

Lastly, Whitt called on the FCC to adopt policies that treat the airwaves more as commodities to be bought and sold on the secondary market. To Whitt, licensees should be able to more freely “swap”with other licensees.

AT&T Wants More Spectrum.

Hank Hultquist, vice president of federal regulatory for AT&T, said he agrees with Whitt. Speaking during a later panel discussion, Hultquist said the FCC should consider launching an investigation into “what's working and what's not”—ultimately, whether there is a need for “additional carrots and sticks” to stimulate secondary-market activity.

Hultquist said one of the problems has been a “lack of attention”to secondary markets.

“It shouldn't be, ‘Here's the answer, and not that.’It's figuring out how to optimize,” Hultquist said, commenting on the overall spectrum shortage problem. “The answer to any optimization problem is never ‘all this and none of that.’It's always ‘some of this, some of that, and some of that.’That's how we continue to have well-functioning networks to meet the needs of consumers.”

When asked to offer his opinion about legislation authorizing the FCC to hold incentive auctions, Hultquist underscored the importance of freeing spectrum for licensed use.

“We need more spectrum, so whatever comes out of Congress should give us a fair shot at bidding on it,” Hultquist said. Other components of the bill “are far less important from an AT&T perspective.”

 

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