FCC Majority Backs Open-Access Plan for Airwaves
Wednesday, July 25, 2007
A majority of the members of the Federal Communications Commission told a House panel yesterday that they support an open-access requirement for the coming radio spectrum auction that would give consumers more choices for cellphone devices and services.
The open-access proposal, first outlined about two weeks ago by FCC Chairman Kevin J. Martin, has become central to the debate over how the airwaves will be used when television broadcasters give them up in 2009. The FCC plans to auction these airwaves to companies in January. The measure would require the highest bidder to use a third of the airwaves to build a network that is available to all wireless devices and services.
The hearing yesterday before the House subcommittee on telecommunications and the Internet was the first time the commissioners publicly shared their views about the rules for the auction and was probably the last chance for Congress to weigh in before commissioners vote on the rules, perhaps as early as next week. Democratic Commissioners Jonathan S. Adelstein and Michael J. Copps said they supported the open-access plan, while Republican Commissioners Deborah Taylor Tate and Robert M. McDowell said they were undecided.
The Martin proposal was unpopular among Republican subcommittee members, who say the auction should be free of conditions -- in part because rules could reduce the revenue it generates, which is expected to be about $15 billion. About $10 billion of that has been allocated for federal use. Democrats on the panel supported the provision on the grounds that it would give consumers more choices than wireless providers like AT&T and Verizon Wireless now provide.
Google, which has expressed interest in bidding, has said the open-access requirement is not enough to allow a new entrant into the wireless market. On Friday, the company said it would spend at least $4.6 billion to bid on the spectrum if the FCC also mandated that the winner lease some of the airwaves to other companies offering broadband services that do not restrict devices or services. Martin has resisted what is being called the "wholesale" measure, saying it would discourage the winner from investing in the network.
Excluding AT&T, the wireless industry opposes any restrictions on how the spectrum will be used. Last week, AT&T said that it supported Martin's proposal but would not make a decision about whether to bid until the FCC's rules were finalized.
"The proposal is not designed to facilitate the entry of any one company," Martin said. "While there isn't a company that supports my proposal, I think consumers will."
McDowell said he was leaning against Martin's proposal for open access because it could raise prices for consumers. Although McDowell said he would like to see the wireless industry become less restrictive in the devices and services it offers consumers, he questions whether that should happen through "natural evolution or government mandate."
Several lawmakers expressed concern that the open-access rule would shut small and rural companies out of the auction. If a condition is placed on the largest piece of the spectrum, well-established carriers such as AT&T and Verizon may opt to bid on smaller licenses eyed by rural carriers, Rep. J. Dennis Hastert (R-Ill.) said.
Martin said he favored breaking up the spectrum into licenses of various sizes to let a diverse mix of companies participate in the auction.