FCC Chairman Bill Kennard now says the agency has an open mind on the question of private
wireless auctions. It wasn’t always that way.
The FCC, going back to the days when Kennard was general counsel
under former chairman Reed Hundt, has had a burning desire to put private wireless licenses on the same auction block
that glorified the sale of paging and mobile phone permits for billions of dollars.
It has to do with a mindset shift in
recent times, in which economists have come to trump engineers in FCC spectrum management-a sore spot in some
FCC circles. Thus, spectrum is spectrum, and should go to the top bidder, which-in theory-puts it to the highest and
best use. Others, not as taken with heady game theory, counter that auctions simply put licenses in the hands of those
with the most money or the lunacy to overpay the most.
“Congress both renewed and expanded the FCC’s
auction authority in the Balanced Budget Act (of 1997). In considering how to implement its expanded auction
authority, however, we are mindful of the emphasis placed on our obligation under Section 309(j)(6)(E) to consider
engineering solutions and other means to avoid mutual exclusivity among applicants for initial licenses,”
Kennard told lawmakers Tauzin, Waxman, Dingell, Gorton, Breaux and Daschle in March 17 letters.
Kennard was
responding to a Dec. 22 letter in which the lawmakers expressed concern about FCC private wireless licensing
intentions reported by RCR in a Nov. 2, 1998, story. The article conveyed former WTB chief Dan Phythyon’s sense at
the time that-under the 1997 budget act-the FCC was duty bound to sell private wireless frequencies but would work
with users to make the process as painless as possible.
At that time, Ari Fitzgerald, wireless policy adviser to
Kennard, said additional spectrum management tools would be welcomed.
Here it gets a little complicated. Besides
desiring lease fees in lieu of auctions, private wireless wants more radio channels. But there is fear that too strong a
push for lease fees could attract the attention (and wrath) of the powerful cellular and broadcast lobbies, a consequence
that could kill not only lease fees but a new private wireless spectrum allocation as well.
All this has landed in the
lap of newest WTB Chief Tom Sugrue. Sugrue, for his part, appears to hear the entreaties from industry and Capitol
Hill. Yet the challenge remains: how to square Congress’ mandate to auction licenses with its mandate to avoid
them if possible.
In his March 17 letters to lawmakers, Kennard underscored the point that the FCC lacks statutory
authority for spectrum user fees but “such an option could substitute for auctions as a means of ensuring that
private users make efficient use of spectrum.”
In addition, Kennard agreed with congressional conferees that
the FCC should consider earmarking more spectrum for shared or exclusive use by private wireless services. He said
the issue will be taken up in the private wireless auction rule making or in a separate allocation
proceeding.
Meanwhile, private wireless licensing has become an early test for Mr. Sugrue. There’ll be more.
