FROM: Public Knowledge [1]

Public Interest Groups Want FCC To Create Wireless Broadband Competition

The comments were due yesterday at the FCC on the proposals for how the auction of the valuable 700 MHz spectrum should be conducted. PK was part of a group of public-interest organizations that made recommendations on how the spectrum should be used best to try to break up the duopoly that telephone and cable companies have on high-speed broadband, or at least add some semblance of competition.

Also filing with us as the Ad Hoc Public Interest Spectrum Coalition were (in alphabetical order): Consumer Federation of America, Consumers Union, EDUCAUSE, Free Press, Media Access Project, New America Foundation and U.S. Public Interest Research Group.

In its comments on the 700 MHz auction, the coalition said that the Commission should act “both to ensure that new spectrum is offered on an open and nondiscriminatory basis and to bring in new entrants interested in challenging the current cozy wireless oligopoly and broadband duopoly.”

We recommended several policies that should be implemented in the auction to improve competition, including:

1. Anonymous Bidding: Anonymous bidding prevents bidders from using signaling and blocking techniques during the auction to deter new entrants from participating. Anonymous bidding will both maximize the likelihood of new entrants and better ensure an appropriate return to the public for the use of valuable public licenses.

2. Exclusion of Incumbents or New Entrant Credits: Exclusion of existing incumbents remains the simplest way to create a class of new entrants able to compete with existing providers. Alternatively, a “new entrant credit” can make it possible for new entrants to compete against deep-pocketed incumbent rivals.

3. Band Plan Issues: The Commission should adopt band plans that facilitate creation of national providers to achieve necessary economies of scale.

4. Build-Out Requirements: Licensees should be subject to a “use or lose” license condition. At the same time, Commission should allow new entrants to demonstrate that failure to meet the service requirements result from genuine difficulties rather than from an intent to warehouse spectrum or leave rural areas unserved.

5. Designated Entities (DEs): The Commission should set rules limiting the relationships between small businesses that participate in the auction (labeled by the FCC as designated entities, or DE) and large wireless incumbents. Auction procedures often include provisions to increase the chances of small businesses to win spectrum licenses.

6. Open Access: The 700 MHz auctions will not give birth to the much anticipated third pipe if the licenses are auctioned to the very same vertically integrated telephone and cable incumbents that dominate the wireline market. At least 30 MHz of spectrum licenses should be conditioned on the licensees’ obligation to make wholesale service available to any provider. This will guarantee that new entrants have the opportunity to enter the market in competition with incumbent providers.

7. Net Neutrality and Carterfone: All the licensees which win spectrum in the auction must be obligated to carry all Internet and voice traffic without privilege, degradation, or preference, and they must permit consumers to use any non-interfering equipment.

A copy of the summary of the comments is here [2]

The full text is here [3]