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 The Federal Communications Commission raked in roughly $19.6 billion in its spectrum auction that concluded last month. But for two Democrat commissioners on the agency's five-person panel, a lot more could have been done to create a national rival to incumbent phone and cable broadband companies.
The agency sold a hodgepodge of frequencies, all on the 700-megahertz band of the spectrum, that are being reclaimed from television stations as part of their February 2009 transition to all-digital signals. Verizon Wireless Inc., AT&T Inc. and EchoStar Communications Corp. were the primary victors, though 70% of the licenses sold to a broad range of other bidders and some new entrants. At a hearing Tuesday morning, Democrat Commissioners Michael Copps and Jonathan Adelstein both argued that the agency could have done more to encourage a new national entrant. A key problem? No requirement that the winner of a national block of spectrum, known as the C-Block, should sell access to rival service providers at wholesale rates. The lack of that condition is why Verizon Wireless, not a new entrant, won the national block, they argue. Copps: "The auction results also deepen my disappointment that the commission did not impose a wholesale requirement on the C-Block. It is now clear that that a wholesale requirement would have had minimal impact on overall auction revenue, yet would have brought a new entrant to the wireless marketplace." Adelstein: "Ideally this auction would have developed a third national rival. A wholesale provision could have done a lot to make that happen." In his defense, FCC Chairman Kevin Martin argued that even though the auction did not produce a national rival to phone and cable incumbents, it did create smaller rivals across the nation. Martin: "Although the auction did not result in single national rival, in every city, the two incumbents [phone and cable] will have a wireless broadband service rival that competes with them." - Ron Orol See the live commerce committee hearing Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World. Categories Deal Video
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