FCC Head Predicts Incentive Auctions Will Be Inclusive, Promote Competition

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By Paul Barbagallo  


The Federal Communications Commission's planned incentive auctions of spectrum will be structured in a way that will make it possible for all wireless companies to bid, while at the same time fostering competition, FCC Chairman Julius Genachowski said April 30.

Speaking at an event sponsored by Bloomberg News, Genachowski addressed recent criticism leveled at the agency by House Republicans and AT&T Inc. that the FCC is seeking to engineer the auctions to exclude the largest wireless carriers--AT&T and Verizon Wireless.

“Every mobile operator out there, including the largest ones, needs more spectrum,” Genachowski said. “And I'm convinced the auction will be designed so that everyone can get more spectrum. At the same time, it's very important for our innovation economy that mobile remain competitive.”

Reaction to DOJ Antitrust Filing

Earlier this month, AT&T blasted an ex parte submission from the Department of Justice that urged the FCC to consider imposing spectrum caps, weights, or other measures to ensure that Sprint Nextel Corp. and T-Mobile USA Inc. can gain access to spectrum--particularly frequencies below 1 gigahertz. AT&T suggested that the DOJ is really asking the commission to “rig” the auction in violation of the Communications Act.

“It is surprising that the Antitrust Division of the Department of Justice would even propose measures that are so nakedly designed to help specific companies,” Wayne Watts, AT&T's senior executive vice president and general counsel, said in an ex parte filing in WT docket 12-269, the FCC's Mobile Spectrum Holdings proceeding. “The commission's mandate under the Communications Act is to promote the competitive process, not to pick winners and losers in that process. The Spectrum Act reinforces that mandate by requiring that 600 MHz spectrum be allocated pursuant to an auction from which no qualified carrier may be excluded. An auction that is deliberately designed to steer spectrum to two particular carriers is not consistent with those mandates.”

Defends 2011 Anti-Merger Steps

During the Bloomberg News event, Genachowski also defended his decision in 2011 to take steps to block AT&T's proposed $39 billion acquisition of T-Mobile.

For the same reasons of preserving competition, he said “it was absolutely the right call.”


In 2011, “the U.S. mobile market was on the doorstep of duopoly.”  



Julius Genachowski, FCC chairman

“Two-and-a-half years ago, the U.S. mobile market was on the doorstep of duopoly,” Genachowski said. “Some people thought it was so inevitable that they said, 'you should approve the transaction, it's happening anyway.' Look at the market now. Sprint and T-Mobile, instead of moving down, they're moving up. They're getting stronger and we're seeing a healthy, competitive market. Meanwhile, Verizon and AT&T are doing exceptionally well too, increasing their investment in cap ex, innovating, helping drive our economy forward.”

Genachowski, who is planning to leave the agency sometime over the next several weeks, said his successor must take a neutral, fair-minded, yet pro-competition approach.

“The more competitive these markets are, the less the government has to engage in the kind of behavioral regulation of businesses,” Genachowski said.