FCC's Clyburn Asked to Rewrite Rules Ahead of Spectrum Auction

Sprint, T-Mobile and others, fearing the might of AT&T and Verizon, have asked the FCC to reconsider current spectrum auction rules.   

Mignon Clyburn's position as acting chair of the Federal Communications Commission (FCC) went into effect Saturday morning, May 18, and on Monday morning she was being asked to push back against AT&T and Verizon Wireless, the industry's two largest players, in advance of next year's spectrum auction.

In a letter signed by representatives from Sprint, T-Mobile, US Cellular, C Spire Wireless, Comptel and other organizations representing consumers, small businesses and entrepreneurs, Clyburn was asked to perform a "thorough and comprehensive review and update" of the rules pertaining to spectrum auctions, in advance of a high-stakes auction scheduled for 2014.

In reconsidering the rules, she was asked to support recommendations made by the Department of Justice in an April ex parte submission.

"We urge the Commission to adopt rules that ... will enable broad participation in the auction, thereby promoting competition and increasing prospective auction revenues," the letter states.

In its submission, the DOJ reportedly also stated that allowing AT&T and Verizon Wireless to acquire most or all of the 600MHz spectrum headed for the auction would "stifle broadband competition, stymie broadband innovation and reduce incentives for broadband deployment."

The DOJ further asked the Commission to avoid allowing an excessive concentration of licenses and instead distribute them to a variety of applications.

The letter continued:

"The nation's two largest wireless carriers already hold 78 percent of the low-frequency broadband-capable spectrum and account for more than 80 percent of wireless industry revenues. These two carriers have every incentive to employ their extensive market power to foreclose smaller competitors from participating in the 600MHz auction, which would likely lead to a wireless duopoloy in the United States, similar to their dominance in the wireline market, and thus compromising the growth of the broadband economy."

The wireless industry, supporting consumers' fast-growing mobile data habits, has been aggressively calling for spectrum auctions, and in September 2012 the five-member FCC unanimously voted to begin redirecting television broadcast spectrum to the wireless industry.

It was the first time any government had voted to use incentive auctions to repurpose spectrum for wireless use. Then-Chairman Julius Genachowski had said the auctions would serve not only as an example to other countries but help the United States to "maintain a strategic bandwidth advantage" and "extend our edge in mobile innovation."

The auction will be a major focus for the incoming FCC chair. President Obama has tapped Tom Wheeler, a telecom insider and former lobbyist, for the spot. Clyburn, who in a May 20 statement compared herself to the middle member of a relay team, is heading the organization while the Senate works to confirm Wheeler.

At the time of Clyburn's appointment, consumer interest group Public Knowledge, which signed the May 20 letter, called on Clyburn to "be more than a mere placeholder."

In her own May 20 statement, Clyburn said the Commission has an "important mission" in an "important time."

If asked about her goals in her new position, she added, "I would answer without hesitation—its hallmarks will be continuity and progress."