WASHINGTON-Nine utilities from across the country are urging the Federal Communications Commission to reconsider its decision last year that allowed private-wireless spectrum to be auctioned.
“It is irrational for the commission to state that Congress intended to exempt services used by utilities and that the legislative history refers to `users’ as being exempt and still conclude that the prime utility bands used by utilities are subject to auctions. … It is impossible for utilities, which Congress clearly intended to be exempt from competitive bidding, to benefit from the exemption from competitive bidding because of the way in which the commission allocated the spectrum,” said the utilities.
Last November, the FCC released an order implementing the Balanced Budget Act of 1997, which expanded the FCC’s auction authority to include all spectrum allocations.
The debate is not new. Utilities long have argued they should be exempt from the auction process, citing congressional language that says they should be exempt because they use the spectrum for public-safety purposes.
Congress specifically exempted public safety from auctions but there has been a continuing debate around what it meant by public safety. Many in the private-wireless community believe that public safety refers only to police and fire departments-the “guns and hoses” argument. Others, including the utilities, point to the congressional language that included systems used by non-government entities “used to protect the safety of life, health or property.”
The FCC did not ignore the congressional language; rather it said bands of spectrum must meet “a dominant use” test to be exempt from auctions. It went on to conclude that only the public-safety bands met this dominant-use test. The FCC is not proposing to auction spectrum directly to private-wireless entities but rather to band managers, which then would lease the spectrum to private-wireless entities.
The utilities cry fowl over this plan.
“If the utilities are exempt from auctions, as previously discussed, the commission cannot at the same time apply auctions in the prime utility bands via a band manager without completely eviscerating the intent of the exemption in the first place. … The band manager will be concerned with maximizing its investment, not with the public interest,” said the utilities.
Other groups also are concerned about the strictness of the private-wireless exemption. AAA believes it should not be forced to participate in auctions to obtain spectrum.
“The commission will have to ensure that AAA and other not-for-profit emergency road service providers are eligible to receive additional spectrum, if and when needed, without participating in auctions,” said AAA.
AAA has waged this war against auction participation since shortly after passage of the 1997 bill. The lobbying efforts culminated with a 1998 letter from Sens. Byron Dorgan (D-N.D.) and Conrad Burns (R-Mont.) to the FCC letting them know the congressional intent of exempting AAA.
“This exemption was provided because Congress recognized the unique nature of emergency road services offered by non-public entities [such as AAA] and the important public-safety function these entities provide,” said the letter.
