A Broadband Pipe, or a $12 Billion Pipe Dream?
Can the TV Spectrum Auction Spur Broadband Competition?
Friday, June 1, 2007
12:00 p.m. - 1:45 p.m.
Senate Commerce Committee Hearing Room
253 Russell Senate Office Building
(Lunch will be served)
Economic Research Services
Washington Telecom Counsel
Senior Vice President
Media Access Project
Vice President and Director, Wireless Future Program
New America Foundation
In the coming weeks, the FCC will set the bidding and service rules for the auction of the 700MHz channels being freed up by the DTV transition—“beachfront” airwaves ideal for the provision of high-speed wireless broadband services. This last big sale of prime spectrum is expected to raise $10 to $20 billion in federal revenue. But far more important to the economy and to consumers is whether this auction promotes broadband deployment and price competition in every part of the country—or, instead, further consolidates the nation's over-priced and under-performing broadband duopoly.
Thousands of potential wireless broadband competitors could extend coverage and improve quality if they had greater access to these high-penetration frequencies, but under current FCC auction rules, incumbents are likely to lock out new entrants. Recent studies demonstrate that the FCC's spectrum auction process is fundamentally flawed, both thwarting competitive entry and depressing potential public revenue. For example, in a new study that will be released at this event, economist Gregory Rose finds that while last year's big AWS spectrum auction brought in over $13 billion, the auction rules allowed incumbent providers to collude to block the entrance of new national wireless providers, ultimately reducing auction revenues as well.
Recently, a coalition of consumer and media policy groups (Public Interest Spectrum Coalition)* filed comments at the FCC seeking rules to maximize competition and consumer choice in wireless broadband. The groups asked the FCC to remedy flaws in its auction rules by adopting “anonymous” bidding, “package” bidding, and other mechanisms to encourage competitive entry. The group also requested the FCC to ensure "open" (wholesale) access to this valuable portion of the public airwaves and to adopt basic consumer protection and openness principles for wireless broadband. These reforms will be debated, as well as a proposal by Google to facilitate a real-time wholesale auction mechanism to provide spectrum access to any broadband competitor on an as-needed basis.
*The Public Interest Spectrum Coalition (PISC) includes the New America Foundation, Consumer Federation of America, Consumers Union, Free Press, Media Access Project, Public Knowledge, and U.S. PIRG.
To RSVP for this event, reply to this email: [email protected] with name, affiliation, and contact information.
If you have questions, call or email Liz Wu at (202) 986-2700 x315 or [email protected]