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NEW ORLEANS--The Federal Communications Commission should impose as few “encumbrances” as possible on winning bidders in forthcoming “voluntary incentive auctions,” Commissioner Robert McDowell said during a panel discussion at the International CTIA Wireless 2012 conference and expo May 8.
McDowell cited the example of the 700 megahertz band auction in 2008, when the FCC, at Google Inc.’s urging, imposed “open access” rules on the winner of the band's “C Block”--Verizon Wireless.
Those rules require that any compatible device, such as the Google-backed Android phones, work with any network that Verizon deploys on the C Block.
The decision ultimately forced Verizon to bid a higher amount for the national spectrum licenses and accept a set of rules that it had previously sued the FCC over. Verizon had no choice but to allow Android phones on its network.
“That [decision] drove deeper-pocketed bidders out of the C Block and into the A and B blocks,” McDowell said.
Because the C Block carried with it certain conditions, bidders deemed it a lesser value.
In another instance in that same auction, the commission decided to put the “D Block” up for auction with the stipulation that the winning bidder pair the spectrum with the 10 MHz of spectrum already allocated for public safety communications to build a nationwide mobile broadband network, which would have been shared by private companies and a group of public safety organizations.
The block failed to attract a winning bidder and has sat idle since then.
“Unencumbered spectrum will lead to faster adoption and faster build-out,” McDowell said.
If the FCC focuses only on simple build-out requirements, incentive auctions will be more successful, he added.
“The FCC should avoid trying to predict where the marketplace will be in the far-off future,” McDowell said. “It never ends up being the right policy.”
Incentive auctions are still several years away. As part of the FCC's effort to make new spectrum available for the next generation of mobile devices capable of browsing the internet at high speeds, the agency is working with industry to drive greater spectral efficiency and has agreed to work with the Commerce Department's National Telecommunications and Information Administration to test spectrum sharing in the 1755-1850 MHZ band).
“We have to make spectral efficiency a top-tier topic,” McDowell said.
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