WASHINGTON—The Federal Communications Commission voted today to limit bidder information at the advanced wireless services auction that begins June 29, but regulators agreed to revert to full disclosure rules if they determine the auction is likely to be competitive.
Many mobile-phone carriers—large and small—opposed a blind-bidding approach embraced unevenly by the FCC as a safeguard against collusive and retaliatory bidding behavior. No. 2 carrier Verizon Wireless, which has a strong spectrum position relative to its national competitors, was the exception. The agency’s anonymous bidding scheme was backed by the Justice Department, Federal Trade Commission and several university gaming experts.
While largely departing from precedent on bidding procedures, the FCC decided to stick with the simultaneous multiple round approach employed in many past wireless auctions. The commission had entertained the idea of moving to a new auction format that would have included package bidding.
The FCC is set to put 1,222 advanced wireless service licenses—representing 90 megahertz in the 1710-1755 MHz and 2110-2155 MHz bands—on the auction block two-and-a-half months from today. The AWS auction is particularly critical for T-Mobile USA Inc., the smallest national cellular operator, insofar as shoring up spectrum holdings needed to support high-speed multimedia content delivery to consumers.
“Although our auctions have generally functioned well, allegations of collusive behavior have been raised in regard to past auctions. Despite various attempts to address these concerns, the commission’s auction processes continue to provide opportunities for various types of collusion and other anti-competitive bidding behavior,” said FCC Chairman Kevin Martin. “Unfortunately, the ongoing susceptibility of our auctions to these practices is no secret; methods for exploiting our auctions have been described in detail in articles directed specifically at the commission’s current auction format. In light of this evidence, I believe it is essential that we make an effort to foreclose anti-competitive bidding behavior in this auction.”
FCC members Michael Copps and Jonathan Adelstein voiced less enthusiasm about making such a major change in bidding procedures for the AWS auction. Copps warned anonymous bidding could lead to unintended consequences, namely fewer bidders and less revenue for the U.S. Treasury. Another potential downside is the impact on small companies, according to Adelstein.
“I was originally told that small companies would benefit from our blind-bidding proposal because it would protect them from becoming victims of large carrier bidding strategies. In an interesting twist, it is the smallest carriers who have spoken the loudest against the proposal,” Adelstein said.
Still unresolved as the AWS auction nears is the question of whether the FCC will ban large mobile-phone carriers and possibly other major telecom firms from partnering with small applicants known as designated entities. DEs are eligible for 25-percent bidding discounts on wireless licenses.
The FCC today also adopted relocation procedures and cost-sharing rules associating with clearing the 2110-2155 MHz band—currently occupied by fixed wireless licensees—for AWS.
