Pai May Cast Lone ‘No’ Vote on Spectrum Aggregation NPRM
A spectrum aggregation notice of proposed rulemaking, slated for a vote at the FCC’s Sept. 28 meeting, is expected to win easy approval, agency officials said. The NPRM is tied to a second rulemaking also tentatively scheduled for a vote at the monthly meeting. That second NPRM establishes rules for an incentive auction of broadcast spectrum, and potentially could be used to keep Verizon Wireless and AT&T from bidding in some markets where they already have substantial spectrum holdings. At this stage, all the FCC is doing is asking questions. The NPRM will likely get “yes” votes from all three FCC Democrats and at least one Republican, agency officials said.
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Commissioner Robert McDowell has rarely dissented on an NPRM in his six years as an FCC member and is unlikely to do so on this one, officials said. The other Republican, Ajit Pai, may take a harder line and vote “no,” officials said. “We're still studying the issue really carefully,” Pai told us Wednesday. “[I] haven’t come up with any firm conclusions one way or the other."
In November 2001, under former Chairman Michael Powell, the FCC agreed to eliminate formal caps on spectrum holdings by carriers in 2003. Since then, the agency has used an informal screen to examine wireless mergers and deals to buy spectrum, sometimes requiring divestitures when spectrum holdings rise above the screen in a given market.
"It’s an NPRM and it’s written in a balanced way with no predetermined outcome that’s obvious,” an agency official said: But “legislators tend to legislate and regulators tend to regulate and a notice of proposed rulemaking means that there could be proposed rules in this area.” The FCC’s screen emerged as a big issue last year when the agency considered AT&T’s proposed buy of T-Mobile, which likely would have put AT&T above the screen in numerous markets. At the time, AT&T urged the FCC to move forward on an NPRM on spectrum screens.
"We don’t really have a spectrum crisis in and of itself, we have a spectrum management crisis and a spectrum allocation crisis and, really, a competition crisis,” said Free Press Policy Director Matt Wood. “Whatever we do to free up more spectrum, whether it’s through auctions or unlicensed, or we would certainly hope a combination of both, we have an eye to who is acquiring exclusive control of the most valuable spectrum."
"It makes perfect sense for the FCC to be clear up front about what the rules are,” said Richard Bennett of the Information Technology and Innovation Foundation. “Some groups will argue for strict rules, and some will argue for loose ones, but no one should be opposed to clarity."
Free State Foundation President Randolph May is a little leery of the FCC investigation in this area, he said. “On the one hand, I understand the commission is just asking whether it should adopt formal rules that replace its current, manipulable non-binding guidance in the form of a ’spectrum screen,'” May said. “In the abstract, from an administrative law perspective, this is not a bad thing. Nevertheless, with the current commission’s disposition to believe it can manage competition better than the marketplace, I'm wary of the FCC taking steps that move it in the direction of spectrum caps."
"The current screen has become so ambiguous that it is harming the secondary market for spectrum,” said Fred Campbell, director of the Competitive Enterprise Institute’s Communications Liberty and Innovation Project. “A rulemaking proceeding offers an opportunity for broad comment from the public and the industry, which is preferable to the current approach.”