Government Delay on Spectrum Deals Costs Consumers, Researchers Say
The U.S. government must accelerate the release of spectrum through federal sharing scenarios and faster FCC approval of commercial spectrum deals, panelists said Monday at an event hosted by the American Consumer Institute. The FCC’s slow consideration of commercial deals like the proposed Verizon Wireless purchase AWS licenses from SpectrumCo and Cox, harms consumers and retards innovation, they said.
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Jeff Eisenach, managing director of Navigant Economics, urged the FCC to quickly approve the Verizon/SpectrumCo spectrum deal in order to provide consumers with the spectrum that he said they “clearly need.” “The lost consumer surplus … is roughly $2 billion,” Eisenach said. “Every month is adding to the wait and harming consumer welfare. That is not a healthy way to do public policy.”
The FCC needs to recognize that T-Mobile is holding up the deal, Eisenach said, and the commission is statutorily banned from entertaining the effects of the deal on some other transaction. “It’s impossible to interpret T-Mobile’s actions, the things they file as anything other than a violation of section 310” of the Communications Act, he said. Section 310(d) of the Communications Act says the FCC can review only the transaction before it, and not compare it to any alternative use of the spectrum. But T-Mobile, a leading opponent of the spectrum deals, has argued that Verizon Wireless is not using the AWS spectrum it has already purchased.
T-Mobile is trying to hold up the transaction and get the commission to make sure the spectrum is sold to a “politically favored third party,” Eisenach said. “The way to deal with it is for the commission to say ‘We aren’t going to do that. We are going to observe section 310 and not get into the business of preparing hearings.'”
The government must seek all options to alleviate both the immediate and long term domestic spectrum demands, said ACT Executive Director Morgan Reed. Creating an environment where government agencies share federal spectrum with the private sector can help address the most immediate market demands, but the government needs to look at longer-term solutions as well, he said. “We have an acute need right now to get a lot of stuff lit up today,” he said. “But we have to be constantly looking and reevaluating technical opportunities down the road.” Reed represents mobile applications developers which he said depend on stable networks to deliver their products to consumers.
Georgetown Senior Policy Scholar Anna-Maria Kovacs was bullish on federal spectrum sharing scenarios: “To the extent that it is practical and it makes sense” federal spectrum sharing would “be a good thing,” she said. “But you have some real issues” that need to be resolved, she said. “You don’t want to find yourself in a situation where planes fall out of the sky because [federal] GPS does not work.”
Kovacs said the FCC should permit secondary market transactions “to make sure that we get as much spectrum from the broadcasters. … We should certainly welcome the opportunity to make that available to consumers.” Kovacs also endorsed the idea of creating a “comprehensive” spectrum inventory that takes into account all commercial and federal holdings. It “would be a good thing,” though “clearly subject to restrictions on government use,” she said.